I propose two new tests of Falk and Knell’s (2004) prediction that individuals’ reference income increases with ability. To overcome the difficulty that the reference income is not observed in existing large data sets, I extend Falk and Knell’s model to establish a link between...

Using a unique dataset we study both the actual and self-perceived relationship between subjective well-being and income comparisons against a wide range of potential comparison groups, enabling us to investigate a broader range of questions than in previous studies. In questions inserted into a...

This paper presents evidence on causal influence of happiness on social capital and trust using German Socio-Economic Panel. Exploiting the unexplained cross-sectional variation in individual happiness (residuals) in 1984 to eliminate the endogeneity problem, the paper finds that happier people...

This research examines the strength of people’s ties with close neighbours and the sensitivity thereof to changes in residential mobility, access to modes of public and private transport, and changes in the availability of modern communications technologies using the German Socio-economic...

Trust is a concept that has attracted - significant attention in economic theory and research within the last two decades: it has been applied in a number of contexts and has been investigated both as an explanatory and as a dependent variable. In this paper, we explore the questions of what...

As from a political economy perspective, politicians often fail to implement structural reforms, we investigate if the resistance to reform is based on the differences in the risk preferences of voters, politicians, and bureaucrats. Based on the empirical results of a survey of the population in...

We investigate how worries in Germany change across time and age, drawing on both closed-ended questions (which typically list a number of worry items) and open-ended questions answered in text format. We find that relevant world events influence worries. For example, worries about peace peaked...

The tertiarization, or perhaps more accurately, the deindustrialization of the economy has left deep scars on cities. It is evident not only in the industrial wastelands and empty factory buildings scattered throughout the urban landscape, but also in the income and social structures of cities....

This paper relates an individual's social capital and the length of unemployment spells of the very same individual. For this purpose, we analyze several facets of an agent's social activities as determinants of her social capital. Social activities lead to social interactions within...

This study analyzes the role of social capital in buffering the negative relationship between informal-care provision and mental health. Using data from the German Socio-Economic Panel (SOEP) and fixed-effect regression models, we show that those individuals who socialize more frequently enjoy...