The connexion between old and new approaches to financial satisfaction

Arbeitspapier

In this paper we compare the new satisfaction evaluation approach, developed in the nineties by Oswald, Clark, Blanchflower and others with the older income evaluation (IEQ) approach, developed by Van Praag and Kapteyn in the seventies of the previous century. We find that both approaches yield strikingly similar results with respect to financial satisfaction. The IEQ-approach yields additional insights, but it is not well applicable to other life domains than finance. It is argued that the usual Probit specification implies a specific cardinalization and, consequently, is less ordinal than usually thought. It is shown that the Probit-approach may be replaced by three other equivalent specifications that have some computational and intuitive advantages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1212

Classification and Topics

• Classification: Wirtschaft ; General Welfare; Well-Being ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Personal Income, Wealth, and Their Distributions ; Single Equation Models; Single Variables: Truncated and Censored Models; Switching Regression Models; Threshold Regression Models ; Welfare, Well-Being, and Poverty: Other ; Fiscal Policies and Behavior of Economic Agents: Household
• Subject: financial satisfaction ; income evaluation ; Probit-models ; cardinal utility ; Eigeninteresse ; Nutzentheorie ; Haushaltseinkommen

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): van Praag, Bernard M. S.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/18851
• Last update: 10.03.2025, 11:42 AM CET