The relative utility hypothesis with and without self-reported references wages

Arbeitspapier

This article uses survey data of workers in Japan to study the effects of own and self-reported reference wages on subjective well-being. Higher wages lead to higher life and job satisfaction. When workers perceive that their peers earn higher wages, they report lower well-being. We compare our results with relative utility tests in the literature and develop a generalized version of the classical measurement error model to show that the estimated bias of the reference wage effect can go in both directions. We propose an IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the true effect.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers ; No. 2010-19

Classification and Topics

• Classification: Wirtschaft ; Microeconomics: General ; Safety; Job Satisfaction; Related Public Policy
• Subject: subjective well-being ; relative utility ; reference wages ; Lebensstandard ; Lohnniveau ; Leistungsmotivation ; Zufriedenheit ; Japan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Garza, Adrián de la ; Mastrobuoni, Giovanni ; Sannabe, Atsushi ; Yamada, Katsunori
• Event: Veröffentlichung
• (who): Banco de México
• (where): Ciudad de México
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/83713
• Last update: 10.03.2025, 11:44 AM CET