Relative income and happiness : an experiment / John Ifcher (Santa Clara University and IZA), Homa Zarghamee (Barnard College), Dan Houser (George Mason University), Lina Diaz (George Mason University) ; IZA Institute of Labor Economics
VerfasserIfcher, John ; Zarghamee, Homa S. ; Houser, Daniel ; Diaz, Lina
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, August 2018
Elektronische Ressource
Umfang1 Online-Ressource (27 ungezählte Seiten, 32 Seiten, 19 ungezählte Seiten)
SerieDiscussion paper ; no. 11763
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Relative income and happiness [0.71 mb]
Verfügbarkeit In meiner Bibliothek
Zusammenfassung (Englisch)

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 nonmonetized 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 revealedpreference approach cannot, suggesting that it may complement choice-based tasks in future experiments to better estimate preference parameters.