Income Comparisons Research Articles

Dynamics of inequalities in a global perspective: An introduction

The contribution in this introduction, and in this monograph issue of Current Sociology itself, is to explain how patterns of inequality associated with global capital have been reconfigured in different contexts and have historically produced varied results. The definition of global inequality used here transcends Euro- and US-centric models of linear development and comparisons of national income and its distribution to explain how complex socioeconomic hierarchies, including – but not limited to – class, reinforce inequalities among social groups around the globe. The editors trace contemporary patterns of inequality back to the history of imperial and colonial power so as to reintroduce into the scholarly dialogue on inequality a broader understanding of ascriptive hierarchies of race, gender, caste, and national citizenship and their relationship to colonial conquest, enslavement, and labor migrations as interrelated contexts of the global production and reproduction of inequality patterns.

Direct evidence for income comparisons and subjective well-being across reference groups

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.

Income comparison, income formation, and subjective well-being: New evidence on envy versus signaling

Drawing on the distinction between envy and signaling effects in income comparison, this paper uses panel data on subjective well-being from Germany over the period 1991–2009 to study whether the nature of income comparison has changed in the process of economic development and institutional change. We conceptualize a person's comparison income as the income predicted by indicators of her productivity and examine if comparison effects have changed with changes in the income–productivity relationship. We find that (i) after a series of institutional reforms that affected income formation, incomes are now better explained by productivity than they were before the reforms, (ii) before the reforms, signaling was the dominant concern in East Germany whereas envy was dominant in West Germany, (iii) since the reforms, no dominance of envy or signaling effects can be found.

Relative Income and Subjective Wellbeing: Intra-National and Inter-National Comparisons by Settlement and Country Type

We extend the Easterlin Paradox (EP) literature in two key respects, testing whether inter-national as well as intra-national income comparisons matter for subjective wellbeing, and testing whether these effects differ by settlement-type as well as by country-type. We confirm the intra-national EP predictions (that subjective wellbeing is left unchanged by an equi-proportionate rise in all intra-country incomes) across four developed country settlement types ranging from rural areas to large cities. The EP result also holds for rural areas in transitional countries but not for larger settlement sizes in those countries. For all country-settlement types, we confirm the importance also of inter-national income comparisons in determining people’s subjective wellbeing. Again, however, the effect is less prominent in larger transitional country cities. We also show that once we control for personal characteristics and income-related factors, we cannot reject the presence of a spatial equilibrium in life satisfaction. Our results indicate that each individual government that wishes to raise the life satisfaction of its residents still needs to boost those residents’ incomes in order to raise their subjective wellbeing. However, at least amongst developed countries, this practice results in an international Prisoners Dilemma in which mean life satisfaction stays stable despite rising global incomes.

Household income and adolescent blood pressure in a Chinese birth cohort: “Children of 1997”

The inconsistent relation of national income with population blood pressure raises questions as to whether social comparisons of relative income at individual or neighbourhood level may be more relevant than absolute income. We examined the associations of absolute household income (income per se), absolute neighbourhood median income (average income among geographically-proximate households), relative household income [deprivation using Yitzhaki index, or rank by position] (differences in income or rank compared with others) and relative neighbourhood income inequality [Gini coefficient] (income gap within a neighbourhood) with blood pressure z-score, prehypertension or hypertension at ∼13 years using a fixed effects multilevel linear or logistic model in a Chinese birth cohort (n = 5063, 61% of follow-up). Absolute household or neighbourhood income was not associated with adolescent blood pressure. Greater relative household income deprivation was associated with higher diastolic blood pressure (0.01 z-score per USD 128 difference in Yitzhaki index, 95% confidence interval (CI) 0.005 to 0.02), so was lower relative household income rank (−0.10, 95% CI −0.15 to −0.04), but relative neighbourhood income inequality was not, when considering each income measure separately. Such associations remained when considering all income measures together. Income measures were not associated with prehypertension or hypertension. Relative household income (greater deprivation or lower rank) were positively associated with adolescent blood pressure independent of absolute household income while absolute or relative neighbourhood income had little contribution, suggesting social comparisons at a key developmental stage could be relevant. Clarifying specific effects of socioeconomic position across the life-course could inform interventions.

The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment

In 2001, Norwegian tax records became easily accessible online, allowing everyone in the country to observe the incomes of everyone else. According to the income comparisons model, this change in transparency can widen the gap in well-being between richer and poorer individuals. Using survey data from 1985–2013 and multiple identification strategies, we show that the higher transparency increased the gap in happiness between richer and poorer individuals by 29 percent, and it increased the life satisfaction gap by 21 percent. We provide back-of-the-envelope estimates of the importance of income comparisons, and discuss implications for the ongoing debate on transparency policies. (JEL D31, H24, I31, K34)

Effects of Objective and Subjective Income Comparisons on Subjective Wellbeing

In this article we present results from the Cape Area Panel Study investigating how income comparisons affect the subjective well-being of young adults and parents. The article builds on previous research in this area by studying whether an individual’s subjective well-being depends on the comparisons they make, not only to those around them, i.e., external comparisons, but to themselves across different time periods, i.e., internal comparisons. In the comparisons, we use both objective and subjective measures of relative income. Overall, we find strong evidence to suggest that income comparisons, both relative to neighbours and relative to oneself, affect subjective well-being. Another interesting observation is that, depending on the comparator, young adults and parents differ in their perceptions of their own well-being. Furthermore, and as expected, we found that objective, as well as subjective, measures of well-being influence well-being, but that this is more prevalent in external than internal comparisons.

DAMPAK ERUPSI MERAPI TERHADAP PENDAPATAN PETANI SALAK NGLUMUT DI DESA KALIURANG KECAMATAN SRUMBUNG KABUPATEN MAGELANG TAHUN 2009-2011

This research aims to know the impact of the eruption of Merapi to the income of farmers in nglumut village of Kaliurang bark town in Srumbung Magelang Regency in 2009-2011. The technique of data collection method using proporsional area random sampling The Data used are the result of productivity, data production, costs of production, farmers ’ income before and after the eruption of Merapi occurred. Analysis of the significant difference test is used to see the difference in productivity before and after the eruption of Merapi occurred of data is done with the analysis of R/C ratio to see comparison of farming income. Research results through different trials showed significant t value amounted to 5,399 > t-table of 1,6782 (with df 49 and confidence level of 95%) and a significant degree of probability on the Sig (2-tailed) = 000 therefore H0 denied that shows there are indeed differences in the productivity of the bark nglumut before and after the eruption of Merapi occurred. Nglumut bark productivity before the eruption of 3960 Kg/year and after eruptions occur 3840 Kg/year. A comparison of total revenues with total costs to farming bark Volcano Eruptions before the nglumut get R/C amounted to 2.72 while for after the eruption had R/C 1.73.

METHODOLOGICAL ASPECTS OF THE CALCULATION OF THE TAX BURDEN IN THE RUSSIAN OIL AND GAS COMPANIES

The paper analyzes the level and methods of calculating the tax burden in the oil and gas companies. It is shown that the existing estimates its level based on erroneous methodology. The author's concept of determining the level of tax burden based on the comparison of net income with expenses.

Income comparison, collectivism and life satisfaction in Turkey

The current research examines the impact of income comparisons on life satisfaction in Turkey which has a feature of “collectivism” or “low individualism”. This is done by analyzing the results of the “Life Satisfaction Survey” applied by the Turkish Statistical Institute (TUIK) for 2011. Using ordered logit estimations, this paper reveals that most of the income comparison, interaction variables and socio-economic variables have a significant explanatory power on life satisfaction levels in Turkey. The main emphasis of the paper is that reference group’s self-reported life satisfaction is related to income comparisons, along with other socioeconomic factors. The impact of comparisons is asymmetric, in that in most cases, under-performing one’s benchmark had a greater effect than out-performing it.

Changes in the financing of municipalities and local governments of selected cities: possible effects on disintegration processes and municipal policy

of municipalities in the Czech Republic in the era of socialism. This was a consequence of the application of the central system of settlement, which was based on Christaller’s theory of central places. In connection with the changes after 1989, there was a disintegration of such integrated communities and the situation has since stabilized. A number of small villages were renewed but cities with inhabitants of a hundred thousand (population of these cities oscillates around a hundred thousand inhabitants) did not experience such processes. Due to this fact the big cities in the Czech Republic are typical for their larger size because they also administrate smaller residential units of rural characteristics, often many kilometers from the city centers. These administrative parts of the cities are managed in different ways. In connection with the manifestations of suburbanization during the past twenty years, the transformation of the social structure of the inhabitants in these “suburbs” and changes in rules of municipal budgetary allocation of taxes (hereinafter BAT) there is the question of sustainability and stability of such defi ned borders of municipalities. The paper presents opinions on the development of the fi nancing system and attempts to analyze the motives of the peripheral parts of selected cities with inhabitants of a hundred thousand to remain part of or separate from these cities. In connection with changes in the BAT made on 1st January 2013, the fi nancial motive can have an important role. The main aim of the paper will be a comparison of the current fi nancial income of these municipalities with previous periods in relation to changes in the BAT and assess the impact of these changes on the potential disintegration processes and municipal politics. The process of urban disintegration and creation of a new municipality is not easy and is provided for in the legal system of the Czech Republic. The paper also gives an overview of this legislation. The authors focus on the cities of Olomouc and Pardubice. The whole study follows on detailed research of the suburban zones and its development in the hinterlands of cities with about 100 thousand inhabitants. Theoretical results are confronted with a real situation in municipalities, the main source of information from practice were structured interviews with representatives of 20 municipalities, mainly mayors. 1. Theoretical Background

On the size and determinants of inter-regional redistribution in European countries over the period 1995–2009

The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995–2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.

On the Size and Determinants of Inter-Regional Redistribution in European Countries Over the Period 1995-2009

The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995-2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.

Direct Evidence for Income Comparisons and Subjective Well-Being Across Reference Groups

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.

Direct Evidence for Income Comparisons and Subjective Well-Being Across Reference Groups

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.

When Experienced and Decision Utility Concur: The Case of Income Comparisons

While there is now something of a consensus in the literature on the economics of happiness that income comparisons to others help determine subjective wellbeing, debate continues over the relative importance of own and reference-group income, in particular in research on the Easterlin paradox. The variety of results in this domain have produced some scepticism regarding happiness analysis, and in particular with respect to the measurement of reference-group income. We here use data from an original Internet survey in Japan to compare the results from happiness regressions to those from hypothetical-choice experiments. The trade-off between own and others' income (showing the importance of absolute and relative income) is similar in these two sets of results. This kind of validation of experienced utility via direct comparison with decision utility remains rare in this literature.

Intake of Cl, Br, I, Se in Human Body with Food in Central Regions of the European Part of Russia

Since most of the central regions of the European part of Russia are considered selenium and iodine deficient, the assessment of modern real consumption of chlorine, bromine, iodine and selenium by population of these regions with different diets is an important constituent part of medical monitoring. In this paper, a brief analysis of the impact of these elements on the human body is given. A number of consumed foodstuffs in different food rations (diets) were assessed. Six selected basic food rations, which most fully reflect the specific features of nutrition in the Russian Federation, were chosen. The analysis of the concentration of chlorine, bromine, iodine and selenium in a wide range of food and agricultural products was carried out. The daily intake of these elements in the human body from the selected diets was calculated. A comparison of the real income of chlorine, bromine, iodine and selenium in the human body with a physiologically needed intake was performed. It is proposed to use the coefficient of Kr, which is the ratio of actual intake of the element in the human body to physiologically needed intake. Based on this analysis assessed insufficient or excess supply of chlorine, bromine, iodine and selenium in the human body with these diets in the central regions of the European part of Russia was evaluated.

Relative Income and Life Satisfaction of Turkish Immigrants: The Impact of a Collectivistic Culture

This study examines the effects of social comparison with a wide range of reference groups on the life satisfaction of Turkish immigrants in the Netherlands. For two sets of ethnic and life-domain reference groups, results are obtained that deviate from the findings of recent studies and that suggest the impact of the collectivistic subculture of the Turkish immigrants. Perceived importance of income comparison with Dutch natives is positively correlated to life satisfaction, supporting an interpretation of this comparison as a positive emancipatory stimulus in the pursuit of self-improvement of the Turkish immigrants. Perceived importance of income comparison with relatives in the Netherlands is positively correlated to life satisfaction as well, which can be interpreted in terms of an underlying feeling of connectedness with one's relatives. On the other hand, Turkish immigrants who have a higher household income than relatives are significantly less satisfied with their life, suggesting the unattractiveness of deviating too much from one's relatives. For other reference groups some interesting results are obtained as well.

Comparison of the Residual Income and the Pricing - Multiples Equity Valuation Models

The paper aims at analyzing the performance of two of the equity valuation models, the residual income (RIVM) and the pricing - multiples model. I test first how the residual income valuation model performs relative to the pricing - multiples model for a set of different value drivers and industries, second whether the performance of the different multiples increases when these are measured either with the mean, the median or the harmonic mean of the absolute prediction error and the signed prediction error. The pricing - multiples approach is in most cases a better predictor of market prices than the residual income valuation model. In addition, the harmonic mean yields to more reliable estimates of value for a set of different industries. Finally, there are some value drivers that are supposed to be more reliable than others in specific industries, but there isn’t any value driver that dominates all the industries.

Positional Income Concerns: Prevalence and Relationship with Personality and Economic Preferences

This paper presents detailed evidence about who compares to whom in terms of relative income. We rely on representative survey data on the importance of income comparisons vis-a-vis seven reference groups, allowing us to exploit within-subject heterogeneity. We explore the prevalence and determinants of positional income concerns, investigating the role of personality and economic preferences. Our results establish robust relationships between positional income concerns and the personality traits agreeableness, conscientiousness, and neuroticism, some of which depend on the reference group. Furthermore, risk and fairness preferences are significantly correlated with positional income concerns.