%0 Report
        %A Boes, Stefan
%A Winkelmann, Rainer
        %T Income and Happiness: New Results from Generalized Threshold and Sequential Models
        %D 2004
        %8 2004 Jun
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1175
        %U https://www.iza.org/publications/dp1175
        %X 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.
        %K subjective well-being
%K ordered response models
%K marginal effects