The Connexion between Old and New Approaches to Financial Satisfaction

Arbeitspapier

In this paper we compare the new satisfaction evaluation approach, developed inthe nineties by Oswald ,Clark , Blanchflower and others with the older incomeevaluation (IEQ) approach, developed by Van Praag and Kapteyn in theseventies of the previous century. We find that both approaches yield strikinglysimilar results with respect to financial satisfaction. The IEQ-approach yieldsadditional insights, but it is not well applicable to other life domains thanfinance. It is argued that the usual Probit specification implies a specificcardinalization and, consequently, is less ordinal than usually thought. It isshown that the Probit-approach may be replaced by three other equivalentspecifications that have some computational and intuitive advantages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 04-053/3

Classification and Topics

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

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Praag, Bernard M.S. Van
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/86635
• Last update: 10.03.2025, 11:45 AM CET