Correlational finding on Happiness and subject: Personal income

StudyAkay (2012): study DE 1985
TitleHappy Taxpayers? Income Taxation and Well-Being.
SourceDiscussion Paper, 2012, Nr. 6999, Institute for the Study of Labor (IZA), Bonn
URLhttp://hdl.handle.net/10419/67179
Public16-65 aged, taxpayers, Germany, 1985-2010
SampleProbability stratified sample
Non-Response
Respondents N =188412

Correlate
Author's labelNet income (log)
Page in Source 8,29
Our classificationPersonal income
Operationalization
Log net income
Observed distributionM= 2614,84; SD= 1572,7; min.= 350, max. = 114.856
Error Estimatess.e.= .017
Remarks
In 2010 euro's

Observed Relation with Happiness
Happiness
Measure
StatisticsElaboration/Remarks
O-SLW-c-sq-n-11-dr=+.35 p < .01
Log net income
O-SLW-c-sq-n-11-db=+.30 p < .01
          b     
Singles  +.376(01)
Couples  +.308(01)
O-SLW-c-sq-n-11-db-iv=+.29 p < .01
b and b-iv controlled for:
- log taxes
- working hours
- age squared
- region east germany
- foreigner
- household size
- employment status
- gender
- marital status
- health
O-SLW-c-sq-n-11-db=+.32 p < .01
b controlled for:
- log lagged taxes (t-1) instead of taxes
other controls the same
O-SLW-c-sq-n-11-db=+.33 p < .01
b controlled for:
- income tax
other controls the same


Appendix 1: Happiness measures used
CodeFull Text
O-SLW-c-sq-n-11-dSelfreport on single question:

Taking all things together, how satisfied are you with your life these days? Please answer with the help of this scale. For instance, when you are totally satisfied with your life, please tick '10'. When you are totally unsatisfied with your life, please tick '0'. You may use all values in between to indicate that you are neither totally satisfied nor totally unsatisfied."
10 totally satisfied
9
8
7
6
5
4
3
2
1
0 totally unsatisfied


Appendix 2: Statistics used
SymbolExplanation
bREGRESSION COEFFICIENT (non-standardized) by LEAST SQUARES (OLS)
Type: test statistic
Measurement level: Correlate: metric, Happiness: metric
Theoretical range: unlimited

Meaning:
b > 0 A higher correlate level corresponds with a higher happiness rating on average.
B < 0 A higher correlate level corresponds with a lower happiness rating on average.
B = 0 Not any correlation with the relevant correlate.
b-ivREGRESSION COEFFICIENT in regression ananlysis with instrumental variable as one or more explanatory variables
Type: test statistic.
Correlate level: metric, Happiness level: metric
Theoretical range: unlimited

The instrument must be correlated with the endogenous explanatory variables, conditionally on the other covariates. If this correlation is strong, then the instrument is said to have a strong first stage. A weak correlation may provide misleading inferences about parameter estimates and standard errors.
The instrument cannot be correlated with the error term in the explanatory equation, conditionally on the other covariates. In other words, the instrument cannot suffer from the same problem as the original predicting variable. If this condition is met, then the instrument is said to satisfy the exclusion restriction.


See Mardia Kent & Bibby (1979): Multivariate Analysis
rPRODUCT-MOMENT CORRELATION COEFFICIENT (Also "Pearson's correlation coefficient' or simply 'correlation coefficient')
Type: test statistic.
Measurement level: Correlate: metric, Happiness: metric
Range: [-1; +1]

Meaning:
r = 0 no correlation ,
r = 1 perfect correlation, where high correlate values correspond with high happiness values, and
r = -1 perfect correlation, where high correlate values correspond with low happiness values.
Source:
Ruut Veenhoven, World Database of Happiness, Collection of Correlational Findings, Erasmus University Rotterdam.
https://worlddatabaseofhappiness.eur.nl