Income and Happiness Across Europe: Do Reference Values Matter?

By Guiglielmo Maria Caporale, Y. Georgellis, Nick Tsitsianis, Y. Yin. Social Science Research Network, 2009

355 citations recorded by the source corpus.

Using cross-sectional data from the first two rounds of the European Social Survey (ESS), we examine the relationship between income, relative income and happiness across 19 European countries. We find that a positive and statistically significant relationship between income and happiness does exist, but such a relationship is weakened by reference income. We also find that while reference income exerts a negative impact on happiness in the case of Western European countries, its effect is positive in the case of the Eastern European countries, a finding that is consistent with the 'tunnel effect' hypothesis. This suggests that for Eastern Europeans reference income is likely to be a source of information for forming expectations about their future economic prospects, rather than a yardstick measure for social comparisons.

Subfields: Health, Social Psychology, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/0d556a6f0a3349b41ff877dd056039f32ca2a13a

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Citations in the corpus

The Silver Lining of Materialism: The Impact of Luxury Consumption on Subjective Well-Being (2012, background): “…subjective well-being (Ahuvia 2008; Linssen et al. 2011; Sheldon and Kasser 1998; Stutzer 2004), people seem to be happier if they earn more than the people they compare themselves with (Angeles 2010; Caporale et al. 2009; Dynan and Ravina 2007; Hagerty and Veenhoven 2003; Mentzakis and Moro 2009).”
A Conceptual Framework of Happiness at the Workplace (2014, background): “They may be happier than those who have lower employment status and gain lower income (Caporale et al., 2009).”
Status Concerns as a Motive for Crime? (2015, result): “…in society) have been confirmed in several empirical studies, among them Alpizar et al. (2005), Carlsson et al. (2007), Carlsson and Qin (2010), Caporale et al. (2009), Clark et al. (2008), Clark and Senik (2010), Johansson-Stenman et al. (2002), Solnick and Hemenway (1998, 2005), and Solnick…”
Life Goals and Well-Being: Are Extrinsic Aspirations Always Detrimental to Well-Being? (2009, neutral): “The opposite is true for Eastern Europe - reference income contibutes to happiness (Caporale et al., 2009).”