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.
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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|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
|JEL Classification:||C25, I31|
|Deposited On:||29 Nov 2011 22:32|
|Last Modified:||09 Jul 2012 05:03|
|Series Name:||Working paper series / Socioeconomic Institute|
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