Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 709: I Can't Sleep! Relative Concerns and Sleep Behavior

Alpaslan Akay (), Peter Martinsson () and Hilda Ralsmark ()
Additional contact information
Alpaslan Akay: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 GÖTEBORG, Sweden
Peter Martinsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Göteborg University, Box 640, SE 40530 GÖTEBORG, Sweden
Hilda Ralsmark: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden

Abstract: We investigate the effect of relative concerns with respect to income on the quantity and quality of sleep using a long panel dataset on the sleep behavior of people in Germany. We find that relative income has a substantial negative effect on number of hours of sleep on weekdays and overall satisfaction with sleep, i.e., sleep quality, whereas absolute income has no particular effect on sleep behavior. The findings are robust to several specification checks, including measures of relative concerns, reference group, income inequality, and local price differences. The paper also investigates the importance of the potential channels including working hours, time-use activities, and physical and mental health to explain how relative concerns relate to sleep behavior. The results reveal that while all of these channels partially contribute to the effect, it appears to be mainly driven by physical and mental health and overall and financial well-being/stress. We also use a subjective well-being valuation approach to calculate the monetary value of sleep lost due to income comparisons. The total cost is as high as about 2.6 billion euro/year (1.8% of the overall monetary value of sleep and 1.3% of total health expenditures) among the working-age population in Germany.

Keywords: Relative Income; Sleeping Satisfaction; Hours of Sleep

JEL-codes: C35; C90; D60

46 pages, October 2017

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