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Centre for Policy on Ageing | |
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Are one man's rags another man's riches?
— identifying adaptive expectations using panel data | | Author(s) | Tania Burchardt |
| Corporate Author | ESRC Centre for Analysis of Social Exclusion - CASE, Suntory-Toyota International Centres for Economics and Related Disciplines - STICERD, London School of Economics and Political Science |
| Publisher | STICERD, London, 2004 |
| Pages | 24 pp (CASEpaper 86) |
| Source | Centre for Analysis of Social Exclusion, London School of Economics, Houghton Street, London WC2A 2AE. http://sticerd.lse.ac.uk/case |
| Keywords | Income [older people] ; Adjustment ; Economic status [elderly] ; Well being ; Longitudinal surveys. |
| Annotation | Economists, psychologists and sociologists have variously considered adaptation to personal circumstances by asking whether people become accustomed to the situation they find themselves in, and subsequently set aspirations, form experiences, and assess well-being, relative to that situation. This paper uses 10 years of panel data from the British Household Panel Survey (BHPS) to study the process of adaptation based on the individual's own previous experience. Subjective assessments of financial well-being at time t, for individuals with a given income level, are compared according to income trajectory of the individual over the previous one to nine years. Descriptive statistics are followed by multivariate analysis, introducing controls for changes in need (family size and composition, disability), and possible social reference groups (e.g. ethnicity and employment status). Results show that year on year, those who have experienced a fall in income since the previous year are less satisfied than those with a steady income, suggesting that subjective assessments may be made in comparison to previous experience. And over a longer period, adaptation to changes in income is asymmetric: people adapt to rising incomes but less so to falling incomes. (RH). |
| Accession Number | CPA-050215218 B |
| Classmark | JF: DR: F:W: D:F:5HH: 3J |
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| ...from the Ageinfo database published by Centre for Policy on Ageing. |
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