What explains life satisfaction? Relative income or rank income? The case of Ecuador

We test whether various measures of relative income and rank income hypothesis explain life satisfaction in Ecuador. We found robust evidence that the rank position of the income within the reference group explains life satisfaction. In contrast, the effect of relative income measures on happiness i...

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Bibliographic Details
Published inApplied economics letters Vol. 29; no. 3; pp. 195 - 199
Main Authors Acosta-González, Hugo Nicolás, Marcenaro-Gutiérrez, Oscar David
Format Journal Article
LanguageEnglish
Published London Routledge 06.02.2022
Taylor & Francis LLC
Subjects
Economic analysis
Economic theory
Economics
Ecuador
Happiness
Life satisfaction
rank
Relative income
Ecuador
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Summary:We test whether various measures of relative income and rank income hypothesis explain life satisfaction in Ecuador. We found robust evidence that the rank position of the income within the reference group explains life satisfaction. In contrast, the effect of relative income measures on happiness is sensitive to the variables used to construct the reference group.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2020.1861193