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30050 APPLICATIONS FOR ECONOMICS, MANAGEMENT AND

FINANCE (BIEMF) - 2015/2016


Applied Research Project and Report

Is there a difference in the level of satisfaction


with life among immigrants and native-born?
Word Count: 3919

In submitting this assignment:


1. We declare that this written assignment is our own work and does not include
(i) material from published sources used without proper acknowledgment or
(ii) material copied from the work of other students.
2. We declare that this assignment has not been submitted for assessment in any
other course at any university.
3. We have a photocopy and electronic version of this assignment in our possession.

Denis Kolev

/1703578/
Dimitar Panchev

/1708387/
Mariya Yotova

/1717305/
Stanimira Marinova

/1719350/

Summary
In the following applied research project our group investigates if a difference exists
in the level of satisfaction with life among immigrants and native- born. This analysis
is based on all countries from the European Social Survey dataset, except Israel
because we want to examine the topic in question across European countries as a
whole. Through the observation of two factors, our report compares the extent to
which the immigrants and the native-born citizens in Europe differ in their level of
satisfaction with life. Using such a broad scope, we believe that this is a large enough
sample to highlight the differences within immigrants and natives in Europe as a
whole. We suppose that the tendency in various levels of satisfaction with life is built
up from different variables defining the countries. For this reason, our group decided
to choose eight different variables which we suppose are highly correlated to the
level of satisfaction with life. As a next step we grouped the chosen variables into two
factors which are as follows: satisfaction with public institutions and satisfaction with
personal life. Using the factors stated, we performed various analyses, in order to
compare the variation in their mean results. As a result, we observed that with
respect to satisfaction with public institution there is a statistically significant
difference among immigrants and natives. On the contrary, our analysis showed no
evidence of a difference between immigrants and natives when considering the
satisfaction with their personal life.

Introduction and Background


The European Union has always promoted goals and values such as equality and
openness to people and ideas. Modern thinking and acceptance is an issue that
Europe is trying to teach its citizens in order to form a better society. Each community
combines separate different elements but nowadays efforts are concentrated on
successfully coordinating them and operating as a harmonious whole. Nevertheless,
Europe is facing the largest Refugee crisis since World War II with many of the
refugees planning to establish themselves at the country they are currently in.
Europes current immigration problem is to some extent familiar to everyone and
prejudice is one of the most problematic issues that Europe faces when striving to
form a uniform society that acts as one single country. Taking into account these
uncontestable facts, our group here undertakes to analyze to what extent satisfaction
with life differs between the immigrants and the native born residents of the country.
We believe that the results obtained would give us some insight as to the extent to
which Europe has managed to overcome its prejudices and has provided better living
conditions for immigrants by treating them how an open and tolerant society would.
Immigration defined by the Oxford dictionary is: The action of coming to live
permanently in a foreign country. Europe is facing a flood of migrants from the
Middle East and Africa and this human tsunami seems unstoppable. However, what
is left unsaid is whether immigrants could ever become assimilated Europeans,
indistinguishable from the native populations. By performing our analysis, we aim to
answer part of this broadly discussed issue by comparing satisfaction of life of
immigrants to that of the native-born. For decades Europe has been a dream
destination for many immigrants, because of the higher standard of life and the
proximity of the continent. Taking into account the establishment of the European
Union, free movement between people and capital in Europe has never been easier.
But here comes the question Does Europe guarantee better life? meaning whether
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the established better conditions on the continent would improve immigrants life by
bringing them satisfaction with life. In considering that issue we must pay close
attention to the anti-discrimination law that states: people must be dealt with on an
equal basis regardless of age, sex, race, ethnicity, nationality, sexual orientation,
gender identity and sometimes religious and political opinions. .The promotion of
equality between people has managed to encourage progress in dealing with the
prejudices of Europeans that we have already talked about despite the fact that
discrimination is still present across countries. To explore that issue our goal is to find
whether the immigrants are more satisfied with the life they have in the country they
have established given their social, cultural and economical origin compared to the
native born population of the country. Our assumption is that immigrants have left
countries with lower quality of life in search of better conditions. For this reason we
expect them to be more satisfied with the country they live in than the native-born
who dont have a basis for comparison and are used to living in these conditions.
Nevertheless, the immigrants may feel cultural and social differences from their
native country which may affect their satisfaction with life. Furthermore, immigrants
may feel left out of the society, because of the social and ethnic prejudices.
According to Shin and Johnson (1978) life satisfaction is defined as a global
assessment of a persons quality of life according to his chosen criteria. While
keeping in mind these abstract ideas weve already discussed, we have decided to
perform a more concentrated study by using the data available to set up factors and
obtain results on the basis of which we could make conclusion for the aspect we are
exploring. To do so, we focus on 8 variables which we group into two factors. The
first factor we investigate is Satisfaction with public institutions. We regard this
factor as having much explanatory power to overall satisfaction with life. What we are
trying to explore here is whether our assumption, that institutions in the countries that
immigrants have left were less efficient, is correct and if that would be a reason for
them to judge their satisfaction with public institutions of the current country at a
higher level. Our second factor concentrates on Satisfaction with personal life as we
are interested in understanding how individuals asses their own life satisfaction in the
two groups. We expect that these results would improve our understanding of
whether Europeans have combated to a certain extent their prejudices and have
managed to accomplish the important social goal of sharing values like tolerance,
equality and acceptance of different people.
The focus of our paper is on an important aspect of contemporary Europe. It
concerns immigration, one of the biggest problems it faces nowadays. We would like
to offer a way to check whether the continent (using as an illustration both EU and
non-EU countries) does indeed bring better life for immigrants by observing their
satisfaction with life. This research gives answers to some of the question raised by
the application of the following techniques. First of all, Factor Analysis is used to
group the variables into the factors: Satisfaction with public institutions and
Satisfaction with personal life. As a second step, we use Analysis of Variance to
test for differences between immigrants and native residents for each of the factors.
We believe our research will serve as a very convenient first step in distinguishing
between the immigrants and natives with respect to two different aspects of
satisfaction with life. Nevertheless, it is up to future research to track these
differences.

Data Description
The data set used for this analysis is drawn from Round 6 of the European Social
Survey conducted in 2012 as being the most transparent and varied source on which
we could focus our research. Since the inquiry is focused on the examination of the
difference among immigrants and native-born in European countries as a whole, we
use all the countries from the dataset while excluding Israel for obvious reasons. We
define 8 variables that will be grouped into two factors later. For defining the two
groups in our analysis- immigrants and native-born, we have transformed the
Variable Born in country into Immigrant status, assuming that immigrants are the
individuals not born in the country to which they correspond. Yet, we realize that
there could be a small percentage of people who do not correspond to this way of
classification, but we believe that this percentage would have a negligibly small effect
on our analysis.
Taking into account that data sets may contain different problems such as: outliers,
missing values and errors, we start with description of the variables we use and
comment on data screening results:
Variable

Label

cntry

Country

stfeco

How satisfied with


present state of
economy in country

stfgov

How satisfied with the


national government

stfdem
stfedu
stfhlth

How satisfied with the


way democracy
works in country
State of education in
country nowadays
State of health
services in country
nowadays

happy

How happy are you

sedirlf

Have a sense of
direction in your life

plinsoc

Your place in society

immigrstatus

Native-born or
immigrant

Scale
{AL= Albania} ;{BE=Belgium};
{BG=Bulgaria};
{CH=Switzerland}
{0,Extremely dissatisfied} ;
{1,"1'"}; {2,"2"); {3,"3"}
{0,Extremely
dissatisfied};{1,"1'"};{2,"2");
{3,"3"}
{0,Extremely
dissatisfied};{1,"1'"};{2,"2");
{3,"3"}
{0,Extremely bad}; {1,"1'"};
{2,"2"); {3,"3"};{4,"4"}
{0,Extremely bad};
{1,"1};{2,"2");{3,"3"};{4,"4"}
{0,Extremely unhappy};
{1,"1'"};{2,"2");{3,"3"};{4,"4"}
{0,Not at all};
{1,"1'"};{2,"2");{3,"3"};{4,"4"}
{0,Bottom of our society};
{1,"1'"};{2,"2");{3,"3"};{4,"4"}
{0,Immigrant};{1,native-born}

Measurement
Nominal

Ordinal

Ordinal

Ordinal
Ordinal
Ordinal
Ordinal
Ordinal
Ordinal
Nominal

Table 1

Univariate Analysis
Given that sometimes datasets present problems such as missing values, outliers
and other errors we start with screening the data as a first step. With regard to
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missing values, we obtain an acceptable overall percentage so we dont have to


exclude any variables that bring us sufficient information. We dont observe the
presence of outliers either.
Other patterns that we also check for are non-normality and skewness which in the
case are not present. Yet, given the large size of the sample we use, they are not
extremely relevant.
Univariate Statistics
Missing

No. of Extremes

Mean

Std. Deviation
Count

Percent

Low

High

stfeco

51178

4.00

2.594

987

1.9

745

stfgov

50683

3.96

2.580

1482

2.8

521

stfdem

50162

5.13

2.578

2003

3.8

stfedu

49638

5.58

2.419

2527

4.8

1845

stfhlth

51583

5.10

2.650

582

1.1

happy

51760

7.08

2.105

405

.8

1841

plinsoc

51056

5.41

1.856

1109

2.1

1479

650

sedirlf

51201

6.99
2.186
964
1.8
2172
a. Number of cases outside the range (Mean - 2*SD, Mean + 2*SD).

Table 2

Multivariate Analysis
For analyzing our research question, we use the following techniques: Factor
Analysis (FA) and one-way ANOVA.
Factor Analysis
The basis of factor analysis is correlation. This interdependency model, that analyzes
patterns in the data, is used to reduce a set of variables to a smaller set of factors.
First of all, we have to check if there is sufficient correlation between the eight
variables that we use. Pearsons correlation coefficient, r, is related to the strength of
the linear relationship that exist between two variables. In order to analyse these
coefficients we take a look at the correlation matrix that shows
a
Correlation Matrix
us that a sufficient relationship between the variables exist.
Besides, on the basis of the determinant of the correlation
a. Determinant = .063
matrix that we obtain we conclude that sufficient correlation
exists since the value we get is low. At the same time, this
value is higher than 0 indicating that there is no multicollinearity.
Table 3
We proceed with performing Kaiser-Meyer-Olkin Test and Bartletts test. We take that
step because KMO test measures whether there is a linear correlation between the
variables. Its necessary to implement that test since obtaining results equal or close
to zero signals absence of linear relation and there is no purpose with continuing the
factor analysis. The result we get is satisfactory as it is above 0.8 revealing that the
partial correlations coefficients are small, which indicates that significant correlation
between the variables exists so we can form meaningful factors.
Moreover, we run Bartletts test for sphericity that shows the approximate ChiSquare, degrees of freedom and significance level. According to theory, at
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significance level of 0 we can reject the null hypothesis stating that there is no
correlation between the variables. In our case, the significance level is .000 so the
null hypothesis is rejected and we conclude that there is correlation between the
variables.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity

Approx. Chi-Square
df
Sig.

.836
126136.816
28
.000

Table 4

As a next step, we have to check whether there is sufficient common variance. To do


so, we use Measure of Sampling Adequacy (MSA) for each individual variable,
obtained by the Anti-Image Matrix. By performing this test we check if the proportion
of common variance among variables is higher than the total sum of the squared
partial correlations.In order for the model to be considered good, that proportion
must be bigger than the sum of the squared partial correlations. By inspecting the
diagonal of the anti-image correlation matrix, we observe that values range from
0.762 to 0.868, which shows that the matrix is suitable for factor analysis
Anti-image Matrices
How
How
satisfied
How
satisfied
State of
Have a
with
State of
How
Your
satisfied
with the
health
sense of
present
education
happy place
with the
way
services
direction
state of
in country
are
in
national
democracy
in country
in your
economy
nowadays
you society
government works in
nowadays
life
in
country
country

Antiimage
Correl
ation

How satisfied
with present
state of
economy in
country
How satisfied
with the
national
government
How satisfied
with the way
democracy
works in
country
State of
education in
country
nowadays
State of health
services in
country
nowadays
How happy are
you
Your place in
society
Have a sense
of direction in
your life

.847

-.445

-.183

-.035

-.114

-.091

-.097

.001

-.376

-.036

-.069

.039

-.018

-.023

-.203

-.105

-.089

-.034

-.012

-.399

-.046

.002

-.014

-.101

-.070

.046

-.231

-.293

-.216

-.445

.807

-.183

-.376

.865

-.035

-.036

-.203

.838

-.114

-.069

-.105

-.399

.850

-.091

.039

-.089

-.046

-.101

.828

-.097

-.018

-.034

.002

-.070

-.231

.854

.001

-.023

-.012

-.014

.046

-.293

-.216

.760

a. Measures of Sampling Adequacy(MSA)


Table 5

On the basis of the performed tests we conclude that there is sufficient correlation
and common variance in our sample dataset and therefore we proceed with the
Factor Analysis.
We are at the phase at which we have to define the number of factors. We do so by
observing Eigen-values which are equal to the sum of the squared loadings for a
given factor. These values represent the proportion of total variance explained by
each factor in the initial solution. According to the Latent root criterion or Kaisers
rule the optimal number of factors to use is those that have an eigen-value above 1.
We take into account the fact that the use of a larger number of factors would not
explain much more of the variation, because unique variance starts to dominate
common variance. By observing the scree plot a plot of the Eigen-values against
the number of factors we consider extracting two factors as an adequate decision.

Chart 1

Our goal for this factor analysis is including only those variables for which the
extracted factors explain an adequate amount of variance.For this reason we
proceed with observation of the communalities. The extraction column of the table
represents the percentage of common variance given the extracted factor model.
Typically, it should be above 0.2. In our case, variables are above 0.36 which we
believe is sufficiently high extraction so we can safely go on.

Communalities

How satisfied with present state of economy in country


How satisfied with the national government
How satisfied with the way democracy works in country
State of education in country nowadays
State of health services in country nowadays
How happy are you
Your place in society
Have a sense of direction in your life

Extraction
.585
.623
.635
.386
.423
.482
.363
.364

Extraction Method: Principal Axis Factoring.


Table 6

We also observe the total sample variance explained by the two factors
looking at the Total variance explained table. We obtain considerably satisfactory
value close to 50 %.
Factor

Initial Eigenvalues
% of Variance Cumulative %
45.330
45.330

Total
3.626

1.286

16.070

61.400

.787

9.836

71.236

.636

7.950

79.186

.557

6.965

86.151

.437

5.462

91.613

.377

4.713

96.326

.294

3.674

100.000

Total Variance Explained


Extraction Sums of Squared Loadings
Total
% of Variance Cumulative %
3.145
39.312
39.312

Rotation Sums of Squared Loadings


Total % of Variance Cumulative %
2.581
32.267
32.267

.716

1.280

8.950

48.262

15.994

48.262

Extraction Method: Principal Axis Factoring.


Table 7

An important procedure on which to focus now is rotation since the extraction


procedure extracts that factor which explains the most variance, then that pattern is
followed in a descending order with respect to variance but there exist many
equivalent solutions. The one we get is the first initial solution which is difficult to
interpret. More accurately, we operate with the Varimax rotation technique, which
rotates the axes but keeps them perpendicular. This orthogonal method of rotation
reduces the amount of variables that have high loadings and thus we can interpret
them easily. Furthermore Keisers experiment illustrates that the factor pattern
realized with Varimax rotation tends to be more invariant with respect to other
rotation techniques.

Pattern Matrix
Factor
1
How satisfied with the national
government

.775

How satisfied with the way democracy


works in country

.769

How satisfied with present state of


economy in country

.729

State of health services in country


nowadays

.614

State of education in country nowadays

.594

How happy are you

.645

Have a sense of direction in your life

.599

Your place in society

.554

Extraction Method: Principal Axis Factoring.


a
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
Table 8

On the basis of the table above we notice that each variable is strongly associated
with only one of the factors. Then, each factor would be interpreted on the basis of
the variables that load strongly onto it. The variables included in our first factor are:
stfgov, stfdem, stfeco, stfhlth, stfedu. Our second factor includes the following
variables: happy, sedirlf, plinsoc.
Factor 1 represents: Satisfaction with public institutions
Factor 2 represents: Satisfaction with personal life
After having defined the factors, we find factor scores and create a new latent
variable for each factor that is used in the analysis.
ANOVA
We implement one-way Analysis of Variance for each of our two defined factors. By
doing so, we measure the difference among the means of different sampled groups,
in our case the difference in level of satisfaction with life between immigrants and
natives.
The assumptions for ANOVA are that populations are normally distributed with equal
variances and also that samples are randomly and independently drawn. So before
we continue, we perform some tests to assure if these assumptions are met.
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First we run the test of variance homogeneity. The result shows p-values equal to
zero for our first factor, while the value for our second factor is equal to 0.497. We
interpret these results that for our first factor the assumption for homogeneity is not
met since we reject the null-hypothesis that states that variances in the
subpopulations are the same at a 0.05 significance level. Even though ANOVA is a
fairly robust to violation of this assumption, we must interpret the results of the
analysis with care especially since our two groups are not of approximately equal
sizes.

Test of Homogeneity of Variances


Levene Statistic

df1

df2

Sig.

Satisfaction with public institutions

23.013

48947

.000

Satisfaction with personal life

.461

48947

.497

Table 9

We also include Normal P-P Plots in order to check if the other assumption of
ANOVA, stating that populations are normally distributed, is satisfied:

Chart 2

From the plots above we conclude that each factor exhibits normal distribution with
very little deviations. After we have checked if the assumptions of ANOVA are met,
we would now want to proceed with testing whether there is a difference in the mean
of level of satisfaction with life between the two groups we analyse: immigrants and
natives. In order to make conclusions, we take as our null hypothesis the hypothesis
that the two means are equal, and we hope that we will have sufficient information to
reject the hypothesis, thus proving that the two means are different. The hypothesis
we want to test is:
H0: For a given factor, natives = immigrants
H1: the two means are different

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Satisfaction with
public institutions
Satisfaction with
personal life

Between Groups
Within Groups

ANOVA
Sum of Squares
375.499
36111.246

df
1
48946

Mean Square
375.499
.738

F
508.960

Sig.
.000

Total
Between Groups
Within Groups

36486.745
2.036
29124.389

48947
1
48946

2.036
.595

3.422

.064

Total

29126.426

48947

Table 10

After performing the analysis of variance, we can see from the table above that pvalue for our first factor it 0.000 therefore we can conclude that the null hypothesis is
rejected. We interpret that result as the presence of significant difference between
satisfaction with public institutions from the point of view of natives and from that of
immigrants. On the other hand, the p-value for our second factor shows us the
evidence that we cannot reject the null hypothesis. That result gives us the
explanation that no significant difference in satisfaction with personal life exists
between immigrants and natives.
Given the results that we obtain on the first tests we perform checking the
assumptions for ANOVA in which we found that the assumption for homogeneity is
not satisfied for our first factor, we decide to confirm our result with further test. We
decide to run Robust Test of Equality of Means which does not require the
assumption for homogeneity of variances to be met. From the table below, we can
observe that we obtain similar results to those stated above regarding mean for
immigrants and mean for natives for each factor.
Robust Tests of Equality of Means
a

Satisfaction with public


institutions
Satisfaction with personal life

Statistic

df1

df2

Sig.

Welch

462.282

4783.758

.000

Brown-Forsythe

462.282

4783.758

.000

Welch

3.382

4859.988

.066

Brown-Forsythe

3.382

4859.988

.066

a. Asymptotically F distributed.
Table 11

Conclusion
The analysis performed aims at investigating whether indeed a difference exists
between how satisfied with his or her life would an immigrant be with respect to the
native population of any country. In the course of our work, we distinguished two
factors that we examined, considering them to have much explanatory power to the
topic in question.
We explored the degree of satisfaction with life more in-depth by considering the
results for Satisfaction with public institutions and Satisfaction with personal life
as being our two factors. How people answer questions regarding the state of country
and its public institutions together with peoples perception for their own life are
diverse factors affecting the same general topic. As far as the former factor is
considered, our analysis showed evidence of the existence of a difference between
immigrants and natives satisfaction with public institutions. One of the main reasons
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for immigration is the search for better life. Thus, we believe that this difference
stems from the fact that immigrants come from countries with worse conditions so
their perception of public institutions is higher than that of the natives who are used to
be living at that quality. With regard to the latter factor, results were just the opposite
it showed no sign of a statistically significant difference. However, we must pay
close attention to the interpretation of the result obtained since the data we used for
analysis is quite subjective.
In conclusion, we believe that our analysis has presented some interesting
observations. Nevertheless, the topic under research is quite complex and we would
suggest a more in-depth research taking into account the results we already
introduced.

References:
1. Power point lectures and slides
2. Shin & Johnson (1978)
3. Oxford Dictionaries Immigration
4. Wikipedia Anti-discrimination law
5. Europes Immigrant Problem Robert Weissberg

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