TY  - RPRT
        AU  - Brown, Sarah
AU  - Gray, Daniel
        TI  - Household Finances and Well-Being: An Empirical Analysis of Comparison Effects
        PY  - 2014/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8530
        UR  - https://www.iza.org/publications/dp8530
        AB  - This paper explores the importance of the household's financial position for an individual's level of well-being. Initially, the empirical analysis, based on a large nationally representative panel survey, aims to ascertain the impact of the household's monetary financial position on overall life satisfaction and financial well-being, with the latter being measured by financial satisfaction and subjective prosperity. Taking into account monetary factors in addition to income, the results indicate that the household's level of net wealth, assets and debt are important determinants of overall life satisfaction and financial well-being.
The paper also explores whether the financial situation of households in a comparison group influences an individual's overall life satisfaction and financial well-being. The results suggest that the financial position of households in the comparison group is an important determinant of an individual's level of overall life satisfaction and financial well-being, with information effects generally dominating comparison effects. In addition, the effects of the comparison group are asymmetric depending on whether a household's financial position is above or below the average of the reference group and vary over the life-cycle.
        KW  - overall life satisfaction
KW  - household finances
KW  - fixed effects ordered logit
KW  - financial satisfaction
KW  - subjective prosperity
        ER  -