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Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52193

Boes, Stefan; Winkelmann, Rainer (2004). Income and Happiness: New Results from Generalized Threshold and Sequential Models. Working paper series / Socioeconomic Institute No. 407, University of Zurich.

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Abstract

Empirical studies on the relationship between income and happiness commonly use standard ordered response models, the most well-known representatives being the ordered logit and the ordered probit. However, these models restrict the marginal probability effects by design, and therefore limit the analysis of distributional aspects of a change in income, that is, the study of whether the income effect depend on a person’s happiness. In this paper we pinpoint the shortcomings of standard models and propose two alternatives, namely generalized threshold and sequential models. With data of two waves of the German Socio-Economic Panel, 1984 and 1997, we show that the more general models yield different marginal probability effects than standard models.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
DDC:330 Economics
JEL Classification:C25, I31
Language:English
Date:June 2004
Deposited On:29 Nov 2011 22:32
Last Modified:09 Jul 2012 05:03
Series Name:Working paper series / Socioeconomic Institute
Official URL:http://www.econ.uzh.ch/wp.html

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