When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.

In this paper, we use the instrument variable (IV) method with a two-stage least squares (2SLS) estimator to explore the impact of exogenous income changes on happiness. Our study is based on the German post-reunification period from 1991 to 1995, when East German income levels, by no means of produ...

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Main Authors: Quek, Adeline Su Yee., Toh, Wen Qiang., Yeo, Fiona Hui Juan.
Other Authors: School of Humanities and Social Sciences
Format: Final Year Project
Language:English
Published: 2011
Subjects:
Online Access:http://hdl.handle.net/10356/44236
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-442362019-12-10T13:17:12Z When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany. Quek, Adeline Su Yee. Toh, Wen Qiang. Yeo, Fiona Hui Juan. School of Humanities and Social Sciences Walter Edgar Theseira DRNTU::Social sciences::Economic theory In this paper, we use the instrument variable (IV) method with a two-stage least squares (2SLS) estimator to explore the impact of exogenous income changes on happiness. Our study is based on the German post-reunification period from 1991 to 1995, when East German income levels, by no means of productivity increase, were set to catch-up to that of their West German industrial counterparts. Using West German sectoral income as an instrument for East German income, we resolved the problem of reverse causation and eliminated the effects of both time-variant and time-invariant unobserved characteristics that were correlated with income and happiness. Our results show that exogenous increases in income did have a positive and significant effect on happiness in East Germany. This impact was greater than what was found in other studies on income and happiness, thereby suggesting that the actual effect of income on happiness has been suppressed in these studies. Bachelor of Arts 2011-05-31T06:35:44Z 2011-05-31T06:35:44Z 2011 2011 Final Year Project (FYP) http://hdl.handle.net/10356/44236 en Nanyang Technological University 40 p. application/pdf
institution Nanyang Technological University
building NTU Library
country Singapore
collection DR-NTU
language English
topic DRNTU::Social sciences::Economic theory
spellingShingle DRNTU::Social sciences::Economic theory
Quek, Adeline Su Yee.
Toh, Wen Qiang.
Yeo, Fiona Hui Juan.
When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
description In this paper, we use the instrument variable (IV) method with a two-stage least squares (2SLS) estimator to explore the impact of exogenous income changes on happiness. Our study is based on the German post-reunification period from 1991 to 1995, when East German income levels, by no means of productivity increase, were set to catch-up to that of their West German industrial counterparts. Using West German sectoral income as an instrument for East German income, we resolved the problem of reverse causation and eliminated the effects of both time-variant and time-invariant unobserved characteristics that were correlated with income and happiness. Our results show that exogenous increases in income did have a positive and significant effect on happiness in East Germany. This impact was greater than what was found in other studies on income and happiness, thereby suggesting that the actual effect of income on happiness has been suppressed in these studies.
author2 School of Humanities and Social Sciences
author_facet School of Humanities and Social Sciences
Quek, Adeline Su Yee.
Toh, Wen Qiang.
Yeo, Fiona Hui Juan.
format Final Year Project
author Quek, Adeline Su Yee.
Toh, Wen Qiang.
Yeo, Fiona Hui Juan.
author_sort Quek, Adeline Su Yee.
title When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
title_short When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
title_full When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
title_fullStr When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
title_full_unstemmed When money fell from the sky : Investigating the impact of exogenous income increase on life satisfaction in East Germany.
title_sort when money fell from the sky : investigating the impact of exogenous income increase on life satisfaction in east germany.
publishDate 2011
url http://hdl.handle.net/10356/44236
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