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In normative public economics it is crucial to know how fast the marginal utility of income declines as income increases. One needs this parameter for cost-benefit analysis, for optimal taxation and for the (Atkinson) measurement of inequality. We estimate this parameter using four large cross-sectional surveys of subjective happiness and two panel surveys.(More)
The product of experts learning procedure [1] can discover a set of stochastic binary features that constitute a non-linear generative model of handwritten images of digits. The quality of generative models learned in this way can be assessed by learning a separate model for each class of digit and then comparing the unnormalized probabilities of test(More)
There is a well-established positive correlation between life-satisfaction measures and income in individual level cross-sectional data. This paper attempts to provide some evidence on whether this correlation reflects causality running from money to happiness. I use industry wage differentials as instruments for income. This is based on the idea that at(More)
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 2008 module of the German-Socio Economic Panel Study we ask(More)
An experiment tested whether and in what circumstances people are more likely to believe an event simply because it makes them better off. Subjects observed a financial asset’s historical price chart, and received both an accuracy bonus for predicting the price at some future point, and an unconditional award that was either increasing or decreasing in this(More)
This paper offers a simple but powerful model of wishful thinking, cognitive dissonance, and related biases. Choices maximize subjective expected utility, but beliefs depend on the decision maker’s interests as well as on relevant information. Simplifying assumptions yield a representation in which the payoff in an event affects beliefs as if it were part(More)
Throughout adulthood and old age, levels of well-being appear to remain relatively stable. However, evidence is emerging that late in life well-being declines considerably. Using long-term longitudinal data of deceased participants in national samples from Germany, the United Kingdom, and the United States, we examined how long this period lasts. In all 3(More)
A new algorithm for the construction of physical maps from hybridization fingerprints of short oligonucleotide probes has been developed. Extensive simulations in high-noise scenarios show that the algorithm produces an essentially completely correct map in over 95% of trials. Tests for the influence of specific experimental parameters demonstrate that the(More)