preferences and focusing exclusively on actual choices may leave an incomplete picture to understand wellbeing. (Kahneman and Krueger 2006)

**There is solid evidence in the economic literature that the most common measures of subjective wellbeing are consistent enough in time to be a reliable measure of well-being, and are not mainly driven by mood changes or personal distortions.** Krueger and Schkade (2008) analyzed the test–retest reliability of two types of measures of subjective well-being (a standard life satisfaction question and a measure based on recording of the satisfaction experienced at different times of the day)  and obtained a serial correlation of about .60 when assessed two weeks apart. This is lower than the reliability ratios typically found for education, income and many other common microeconomic variables. Nonetheless, the estimated degree of reliability of subjective well-being data is high enough to detect effects when they are present in most applications, especially if samples are large and the data are aggregated across people or activities. (Krueger and Schkade 2008)

**Even though the focus of this paper is on perceptions of economic mobility, we borrow from the literature on perceptions of economic well-being to identify factors behind the mismatch between objective and subjective measures.** For this, we followed the accounts of Selezneva (2011) and Dolan et al. (2008) about determinants of satisfaction with life (SWL). In her account, Selezneva (2011) reviews more than 70 studies that associate subjective well-being with income, work and family life, in the economic, psychological and political science literature, paying particular attention to transition countries. Dolan et al. (2008) reviews papers published in economics journals since 1990 as well as some key reviews in psychology that focus in finding individual-level, family-level and social-level determinants of subjective well-being. Both papers categorize the determinants roughly in income, personal characteristics, attitudes and beliefs, work conditions and macro environment.

**There is agreement in the literature that the correlation between income and subjective well-being is at most weak, leaving room for other factors to explain the perceptions of well-being.** For instance, Dolan et al. (2008) notice that results in the literature generally suggest positive but diminishing returns to income. Zaidi et al. (2009) using the 2006 LiTS obtain a positive correlation between income and satisfaction, though Cojocaru and Diagne (2013) find only a weak correlation between objective welfare and the household relative income position using the the 2010 LiTS. Clark and Oswald (1994) in the UK, and Frey and Stutzer (2000) in Switzerland find at most a low correlation between income and subjective-well-being.

**Income inequality can affect negatively the perceptions of well-being when is associated with an unfair process and unequal distribution of opportunities.** Using data for Europe and U.S. states, Alesina et al. (2004) obtains that even after controlling by income a higher national-level inequality is associated with more negative perceptions of well-being. However, it may also be the case that for countries with higher economic mobility inequality communicates opportunities, and hence higher inequality may signal a higher reward to effort, and have a positive effect on well-being (Dolan et al. 2008). The 2006 World Development Report highlights that income inequality influenced people’s happiness – regardless of absolute income levels- linked to perceptions of “unfair processes and unequal distribution of opportunities” in society (World Bank 2005, p.82). Finally, Abras (2012) obtain that circumstances determined by the lottery of birth (e.g. gender, parental status and politics), affect the perceptions of well-being when they play a role in determining income by means of facilitating positions or contracts.

**Perceptions of fairness are also correlated with higher levels of reported self-satisfaction.** For instance, using data on Italian workers, Tortia (2008) obtains that worker well-being is crucially influenced by fairness concerns. He obtains that self-satisfaction is positively affected by how fair workers perceive are the procedures

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