Social Indicators Research

, Volume 81, Issue 3, pp 497–519 | Cite as

Income Satisfaction and Relative Deprivation: An Empirical Link

Article

Abstract

This paper explores the relationship between two well-established concepts of measuring individual well-being: the concept of happiness, i.e. self-reported level of satisfaction with income, and relative deprivation, i.e. the gaps between the individual’s income and the incomes of all individuals richer than him. Operationalizing both concepts using micro panel data from the German Socio-Economic Panel, we provide empirical evidence for subjective well-being depending more on relative deprivation than on absolute levels of income. This finding holds after controlling for other influential factors in a multivariate setting.

Key words

relative deprivation satisfaction subjective well-being SOEP 

JEL Classification Number

D63 I31 D31 

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Copyright information

© Springer 2006

Authors and Affiliations

  1. 1.Istituto di Economia PoliticaUniversità BocconiMilanoItaly
  2. 2.German Socio-Economic Panel Study (SOEP) DIW BerlinBerlinGermany

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