- The Determinants of Subjective Welfare in

The focus of this paper is the self-rated subjective welfare of the individual in the case of Croatia, a country which has recently undergone both a transitional process as well as a war with its neighbouring countries. The subjective welfare is different from objective welfare, which is commonly defined by income and the difference is first explored through objective and subjective profiles of poverty. The largest difference between the two measures is found among the ones not objectively poor. The determinants of subjective welfare are analyzed in an ordered probit model by the following groups (i) objective variables of personal or household circumstances, (ii) measures of relative income, compared with different reference groups and (iii) attitudinal variables such as future expectations. The results show that, apart from absolute income, relative income is a strong determinant as well as a set of attitudinal variables. This can be connected to the transitional heritage of Croatia and is also in line with what has been found in other countries