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The Impact of Adaptive Preferences on Subjective Indicators: An Analysis of Poverty Indicators

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Abstract

Subjective indicators are often criticized since they are thought to be particularly affected by the phenomenon of adaptive preferences and social comparison. For social policy purposes, processes of downward adaptation in disadvantaged individuals are of particular importance, i.e., it is supposed that such people compare themselves with others who are in the same precarious situation or even worse off and, as a result, lower their expectations and adapt their aspirations and preferences to their material and financial constraints. Based on the 2006–2010 waves of the Swiss Household Panel study, this contribution examines whether, and to what degree, indicators of material deprivation, subjective poverty and subjective well-being are affected by such downward adaptations. Our empirical analysis demonstrates that the bias caused by adaptation processes varies considerably among different measures and that, although subjective indicators are indeed often affected by this phenomenon, there are also robust measures, notably Townsend’s deprivation measure, Halleröd’s proportional deprivation index and the subjective well-being measure of general life satisfaction.

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Acknowledgments

The research reported here was funded by the Swiss National Science Foundation (Grant Number 100017_143320).

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Correspondence to Eric Crettaz.

Appendix

Appendix

The ten regression models discussed in this article are presented in Tables 1 and 2. Table 1 corresponds to Fig. 1 above, while Table 2 corresponds to Fig. 2.

Table 1 Impact of the number of years spent in income poverty on various indicators of material deprivation
Table 2 Impact of the number of years spent in income poverty on various subjective indicators related to the income satisfaction and on the overall level of satisfaction

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Crettaz, E., Suter, C. The Impact of Adaptive Preferences on Subjective Indicators: An Analysis of Poverty Indicators. Soc Indic Res 114, 139–152 (2013). https://doi.org/10.1007/s11205-013-0388-6

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