Do reference values matter? Some notes and extensions on "income and happiness across Europe"

Andreas C. Drichoutis, Rodolfo M. Nayga, Jr, Panagiotis Lazaridis

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

We add to the analysis conducted in an article in this journal authored by Caporale, Georgellis, Tsitsianis, and Yin (2009) (hereafter CGTY) which assessed the relationship between subjective well-being, income and relative income in Europe. Specifically, we note some data management, model/variable specification, and econometric issues that can affect the validity of the findings of CGTY. We then present our own augmented model to test the robustness of the results from the CGTY study. When we try to replicate CGTY's estimation, we find that the main variable of interest, i.e. the reference income variable, reverts sign. We also find several differences in our results, the most important of which is that, in contrast to CGTY's result that suggests a statistically significant negative reference income effect on life satisfaction, reference income does not really significantly affect life satisfaction in our estimations.

Original languageEnglish
Pages (from-to)479-486
Number of pages8
JournalJournal of Economic Psychology
Volume31
Issue number4
DOIs
Publication statusPublished - 2010 Aug 1
Externally publishedYes

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Keywords

  • Comparison income
  • Happiness
  • Life satisfaction
  • Reference groups

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Psychology
  • Sociology and Political Science

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