The structure of subjective well-being and its evolution - An empirical analysis based on individual data

Individual well-being is not driven only by income. For example, unemployment, bad health, or uncomfortable housing conditions are likely to worsen quality of life. Consequently such variables must be taken into account in order to measure individual well-being correctly, on the condition that we are able to estimate their respective weights. Roughly speaking, is individual well-being more impacted by being unemployed or by living in tiny spaces? And by how much? We propose here a method for estimating weights of a synthetic index of well-being. The method uses satisfaction variables along with more objective variables describing individual situations, in order to construct indicators which measure average well-being and its evolution as well as distribution of individual well-being over the population. We use data from the European Community Household Panel (ECHP 1994-2001). We specify econometric models suited for overcoming the subjective nature of satisfaction variables. We estimate weights for the components of well-being indexes that we then build using individual data from enquêtes Revenus Fiscaux collected by Insee. We discuss the validity of these first results and suggest directions for future research.