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Absolute versus Relative Income and Their Effect on Depression and Chronic Anxiety

Absolute versus Relative Income and Their Effect on Depression and Chronic Anxiety

Year:    2017

Author:    Zelekha, Orly, Zelekha, Yaron

Applied Economics Quarterly, Vol. 63 (2017), Iss. 4 : pp. 429–454

Abstract

We use a large survey on health conditions conducted in Israel to explore whether absolute and/or relative income has a moderating effect on depression and/or chronic anxiety. In contributing to the literature, we use diagnosis-based depression and/or anxiety instead of non-diagnosis terms, such as happiness or well-being. Under this framework, we found that all of the moderating effect of income should be attributed to relative income and especially to socioeconomic relative income. Thus, stressing social comparison, as opposed to inner comparison or habituation. These moderating effects, which are mostly found in middle-aged adults (ages 30 to 65), are robust to alternative specifications of different sampling of health conditions, numerous control variables and several subsamples divided by gender, age and religion. The results have important health policy implications regarding possible treatments.

JEL Classifications: I14, D1, I31

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Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/aeq.63.4.429

Applied Economics Quarterly, Vol. 63 (2017), Iss. 4 : pp. 429–454

Published online:    2017-12

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    26

Keywords:    Depression Anxiety Relative Income Absolute Income Well-being

Author Details

Zelekha, Orly

Zelekha, Yaron