Individual Needs and Social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households

Abstract : This paper provides additional evidence, using time-series and cross-sectional Canadian survey data, for the Easterlin hypothesis of an important income elasticity of individual needs. Our analysis is based on the regression of a minimum income to satisfy needs equation derived from a simple utility maximization framework. Moreover, our specification allows computing the Arrow-Pratt relative risk-aversion index and the Intertemporal Rate of Substitution. Our results are robust to different estimation methods dealing with the endogenous nature of income. We also compute poverty rates using our estimated equation parameters and standard OECD measures of poverty and find that some subjective measures are relatively close to the OECD measures.
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https://hal.archives-ouvertes.fr/hal-00650842
Contributeur : Umr 8174 Centre d'Économie de la Sorbonne <>
Soumis le : lundi 12 décembre 2011 - 13:23:15
Dernière modification le : vendredi 26 octobre 2018 - 13:28:02

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François Gardes, Philip Merrigan. Individual Needs and Social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households. Journal of Economic Behavior and Organization, Elsevier, 2008, 66 (3-4), pp.582-596. ⟨10.1016/j.jebo.2006.06.009⟩. ⟨hal-00650842⟩

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