Journal Article

Income Comparisons Among Neighbours and Satisfaction in East and West Germany

Knies, Gundi

2012

Overview

A series of studies have suggested that changes in others' income may be perceived differently in post-transition and capitalist societies. This paper draws on the German Socio-economic Panel Study (SOEP) matched with micro-marketing indicators of population characteristics in very tightly drawn neighbourhoods to investigate whether reactions to changes in their neighbours' income divide the German nation. We find that the neighbourhood income effect for West Germany is negative (which is in line with the 'relative income' hypothesis) and slightly more marked in neighbourhoods that may be assumed to be places where social interactions between neighbours take place. In contrast, the coefficients on neighbourhood income in East Germany are positive (which is consistent with the 'signalling' hypothesis), but statistically not significant. This suggests not only that there is a divide between East and West Germany, but also that neighbours may not be a relevant comparison group in societies that have comparatively low levels of neighbouring.

• Publisher: Springer,Springer Netherlands,Springer Nature B.V
• Subject: Asset income / Capitalism / Capitalist Societies / Capitalist society / Change agents / Community Characteristics / Comparative Analysis / Cultures and civilizations / Data Analysis / East and West / East Germany / Economic Research / Economic sociology / Federal Republic of Germany / Foreign Countries / German Democratic Republic / Germany / Happiness / Household income / Human Geography / Hypotheses / Income / Income distribution / Income effect / Income inequality / Income measurement / Interpersonal Communication / Life satisfaction / Lifestyles. Everyday life / Marketing / Microeconomics / Neighborhoods / Neighbors / Neighbourhoods / Perception / Population Characteristics / Post-communist societies / Public Health / Quality of Life Research / Reference Groups / Regional variation / Residential streets / Satisfaction / Single status / Social behavior / Social Change / Social Indicators / Social interaction / Social research / Social Sciences / Social Status / Social Systems / Socioeconomic factors / Socioeconomic Status / Sociology / Sociology of economy and development / Standard of living. Income / Statistical significance / Studies / Towns / Unemployment / West Germany