Inequality Aversion and Risk Attitudes

Using self reported measures of life satisfaction and risk attitudes, we empirically test whether there is a relationship between individuals inequality and risk aversion. The empirical analysis uses the German SOEP household panel for the years 1997 to 2007 to conclude that the negative effect of inequality measured by the sample gini coefficient by year and federal state is larger for those individuals who report to be less willing to take risks. Nevertheless, the empirical results suggest that even though inequality and risk aversion are related, they are not the same thing. The paper shows that the relationship between risk attitudes and inequality aversion survives the inclusion of individual characteristics (i.e. income, education, and gender) that may be correlated with both risk attitudes and inequality aversion.happiness, inequality aversion, risk attitudes, well-being

Environmental Awareness and Happiness

The focus of this paper is on the relationship between an individual's environmental attitudes (or awareness) and well-being. We use an ordered probit model to examine the relationship between individual measures of subjective well-being and environmental attitudes regarding ozone pollution and species extinction. Using data from the British Household Panel Survey we find a negative correlation between well-being and concern about ozone pollution and a positive correlation between well-being and concern about species extinction. These relationships hold when explanatory variables are included indicating whether or not the person lives in a polluted environment and whether or not the person engages in outdoor leisure activities. These relationships also hold when we control for individual psychological traits. Our results are an important step in clarifying some of the subtleties of the relationship between environmental quality and well-being. This research area is important in addressing the related issues of sustainability and environmental policy design.

Vignette Equivalence and Response Consistency : The case of job satisfaction

Preprin

Income Satisfaction Inequality and Its Causes

In this paper, the concept of Income Satisfaction Inequality is operationalized on the basis of individual responses to an Income Satisfaction question posed in the German Socio-Economic Panel (GSOEP). Income satisfaction is the subjective analogue of the objective income concept and includes objective income inequality as a special case. The paper introduces a method to decompose Income Satisfaction Inequality according to the contributions from variables such as income, education, and the number of children. Given the panel structure of the data, inequality may be attributed partly to permanent individual circumstances and partly to transitory changes. The paper shows that by far the largest part of the satisfaction inequality has to be ascribed to unobserved heterogeneity. Distinguishing between a structural and an unexplained part of inequality we find that income explains the largest part of structural Income Satisfaction Inequality together with household membership; for non-working individuals, the age distribution is very relevant as well.Equivalent Income, Financial Satisfaction, Income Satisfaction, Income Inequality, Variance Decomposition.

The Subjective Costs of Health Losses Due to Chronic Diseases: An Alternative Model for Monetary Appraisal

This paper proposes a method to evaluate health losses or gains by looking at the impact on well-being of a change in health status. The paper presents estimates of the equivalent income change that would be necessary to change general satisfaction with life to the same extent as a change in health satisfaction would do. In other words, we estimate the income equivalent of health changes. Next, the health satisfaction changes are linked to specific diseases in order to estimate the income equivalent for various diseases. This method uses answers to well-being and health satisfaction questions as posed in a large German data set. We distinguish between workers and non-workers and between inhabitants of East- and West- Germany. We find, for instance, that for West-workers hearing impediments are on average equivalent to an income reduction of about 20%, and that heart blood difficulties are for the same group equivalent to a 47% income reduction.chronic diseases, equivalent income, health damages, health satisfaction, well-being.

Image and Reality: the Case of Job Satisfaction

This study makes a distinction between two types of utility. Experienced utility is defined as the job satisfaction derived from the present job, estimated by using a subjective evaluation of job satisfaction. Anticipated utility is defined as the individual’s anticipated job satisfaction before starting the job and it is studied by using a stated preference methodology known as conjoint analysis. The results suggest that the two utility concepts are different. Information about experienced utility is useful for the evaluation of well-being policies and the welfare effects of various employer strategies. Anticipated utility provides knowledge about the job search process.European Commission, Fifth Framework Programme "Improving Human Potential" (contract number: HPSE-CT-2002-00143)

Happiness and Financial Satisfaction in Israel. Effects of Religiosity, Ethnicity, and War

We analyze individual satisfaction with life as a whole and satisfaction with the personal financial situation for Israeli citizens of Jewish and Arab descent. Our data set is the Israeli Social Survey (2006). We are especially interested in the impact of the religions Judaism, Islam and Christianity, where we are able to differentiate between individuals who vary in religiosity between secular and ultra–orthodox. We find a significant effect of religiosity on happiness. With respect to Jewish families it is most striking that the impact of family size on both life and financial satisfaction seems to vary with religiosity. This might be a reason for differentiation in family equivalence scales. For Arab families we did not find this effect. First-generation immigrants are less happy than second-generation immigrants, while there is no significant difference between second-generation families and native families. The effect of the Lebanon War is much less than expected.happiness, subjective well-being, financial satisfaction, Israel, religion, immigration, terrorism