Relative Income and Happiness: An Experiment

Arbeitspapier

John Stuart Mill claimed that "men do not desire merely to be rich, but richer than other men." Do people desire to be richer than others? Or is it that people desire favorable comparisons to others more generally, and being richer is merely a proxy for this ineffable relativity? We conduct an online experiment absent choice in which we measure subjective wellbeing (SWB) before and after an exogenous shock that reveals to subjects how many experimental points they and another subject receive, and whether or not points are worth money. We find that subjects like receiving monetized points significantly more than non-monetized points but dislike being "poorer" than others in monetized and non-monetized points equally, suggesting relative money is valued only for the relative points it represents. We find no evidence that subjects like being "richer" than others. Subgroup analyses reveal women have a strong(er) distaste for being "richer" and "poorer" (than do men), and conservatives have a strong(er) distaste for being "poorer" (than do progressives). Our experimental-SWB approach is easy to administer and can provide some insights a revealed-preference approach cannot, suggesting that it may complement choice-based tasks in future experiments to better estimate preference parameters.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 11763

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Personal Income, Wealth, and Their Distributions ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; General Welfare; Well-Being
• Thema: subjective well-being ; relative income ; others' income ; income comparisons ; happiness ; experiments

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Ifcher, John ; Zarghamee, Homa ; Houser, Daniel ; Diaz, Lina
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/185223
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ