|
on Economics of Happiness |
|
Issue of 2008‒08‒21
twelve papers chosen by |
| By: | David Madden (University College of Dublin) |
| Abstract: | The General Health Questionnaire (GHQ) is frequently used as a measure of mental well-being with those people with values below a certain threshold regarded as suffering from mental stress. Comparison of mental stress levels across populations may then be sensitive to the chosen threshold. This paper uses stochastic dominance techniques to show that mental stress fell in Ireland over the 1994 to 2000 period regardless of the threshold chosen. Decomposition techniques suggest that changes in the proportion unemployed and in the protective effect of income, education and marital status upon mental health were the principal factors underlying this fall. |
| Keywords: | GHQ, mental stress, dominance, decomposition |
| JEL: | I12 I31 I32 |
| Date: | 2007–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200710&r=hap |
| By: | David Madden (University College of Dublin) |
| Abstract: | Recent advances in the measurement of bi-dimensional poverty are applied to a measure of poverty which incorporates income and health poverty. The correlation between income and poverty is examined using the Receiver Operating Characteristics curve. Following from this unidimensional and bi-dimensional poverty indices are calculated for Ireland for the years 2003-2006. Individual and bi-dimensional indices generally show a decline over the period with the biggest decline between 2003 and 2004. The results are generally not sensitive to the degree of poverty aversion or the substitutability between the different dimensions of poverty. |
| Keywords: | receiver operating characteristic, multidimensional poverty |
| JEL: | I12 I31 I32 |
| Date: | 2008–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200815&r=hap |
| By: | Liam Delaney (University College of Dublin); Colm Harmon (University College of Dublin); Arie Kapteyn (RAND Corporation); Arthur Van Soest (Tilburg University); James P Smith (RAND Corporation) |
| Abstract: | Comparing self-assessed indicators of subjective outcomes such as health, work disability, political efficacy, job satisfaction, etc. across countries or socio-economic groups is often hampered by the fact that different groups use systematically different response scales. Anchoring vignettes have been introduced as an effective tool to correct for such differences. This paper develops an integrated framework in which objective measurements are used to validate the vignette based corrections. The framework is applied to vignettes and objective and subjective self-assessments of drinking behavior by students in Ireland. Model comparisons using the Akaike information criterion favor a specification with response consistency and vignette corrected response scales. Put differently, vignette based corrections appear quite effective in bringing objective and subjective measures closer together. |
| Keywords: | anchoring vignettes, reporting bias, hopit model |
| JEL: | C81 I12 |
| Date: | 2008–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200808&r=hap |
| By: | Liam Delaney (University College of Dublin); Colm Harmon (University College of Dublin); Cecily Kelleher (University College of Dublin); Caroline Kenny (University College of Dublin) |
| Abstract: | This paper examines the determinants of self-rated health in the Republic of Ireland using data from the 2001 Quarterly National Household Survey Health Module and the 2005 ESRI Time Usage Survey. Results indicate that self-rated health is a useful proxy for self-reported chronic illness indices. Higher education, having private medical insurance cover and being married is associated with better self-rated health. The strong inverse relationship between age and self-rated health is found to be robust to the inclusion of self-reported morbidity. Caregivers display lower self-rated health, even after controlling for age, marital status and education. We find only minor effects of gender. Understanding further the causal nature of the above associations is a key issue for future research. |
| Date: | 2008–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200811&r=hap |
| By: | David Madden (University College of Dublin) |
| Abstract: | The General Health Questionnaire (GHQ) is frequently used as a measure of mental well-being. A consistent pattern across countries is that women report lower levels of mental well-being, as measured by the GHQ. This paper applies decomposition techniques to Irish data for 1994 and 2000 to examine the factors lying behind the gender differences in GHQ score. For 1994 most of the difference is accounted for by characteristics while in 2000 most of the difference arises from returns to characteristics. The issue of path dependence, or choice of reference group, is shown to be important, mostly arising from the differing effect of principal economic status on men and women. |
| Keywords: | GHQ, decomposition, path dependence |
| JEL: | I12 I31 I32 |
| Date: | 2008–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200803&r=hap |
| By: | P. Wilner Jeanty (The Ohio State University) |
| Abstract: | The World Bank's World Development Indicators (WDI) compilation is a rich and widely used dataset about development of most economies in the world. However, after obtaining the data from the World Bank’s web site or the WDI CD-ROM, users need to manage or reorganize the data in a certain way for statistical applications. The World Bank has made great strides in rendering WDI in several forms for download. Yet, seemingly unrelated regression analysis, for example, cannot be performed using any of such structures. Reorganizing the data for seemingly unrelated regression analysis as well as renaming the series with meaningful variable names and maintaining the series descriptors as variable labels in the reshaped dataset represent significant data management challenges for the inexperienced Stata users. I will present a new Stata program, wdireshape, which reduces data management time and effort to zero when the ultimate structure is to estimate panel data and seemingly unrelated regression models, or to have a dataset with the countries as rows and the variables for each year as columns. The wdireshape and paverage commands are available for download from the SSC Archive. |
| Date: | 2008–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:boc:nsug08:5&r=hap |
| By: | Sakiko Fukuda-Parr (The New School); Terra Lawson-Remer (New York University); Susan Randolph (University of Connecticut) |
| Abstract: | In response to an increasing demand for rigorous monitoring of state accountability in meeting their human rights obligations, a growing literature on human rights measurement has emerged. Yet there are no widely used indicators or indices of human rights obligations fulfillment. This paper proposes a methodology for an index of economic and social rights fulfillment that: uses available survey-based objective, rather than subjective data; focuses on state obligations rather than solely on individual enjoyment of rights; and captures progressive realization of human rights subject to maximum available resources. Two calculation methods are proposed: the ratio approach and the achievement possibilities frontier approach. The paper identifies key conceptual and data constraints. Recognizing the complex methodological challenges, the aim of this paper is not to resolve all the difficulties, but rather to contribute to the process of building rigorous approaches to human rights measurement. The proposed index thus has recognized limitations, yet is an important first step based on available data. Our goal here is to contribute to the longer term development of a methodology for measuring economic and social rights fulfillment. The paper concludes that the proposed index provides important new information compared with other measures of economic and social rights fulfillment, but still does not capture some desired features such as the right to non-discrimination and equality, and the right to social security. The paper also outlines an agenda for longer term research and data collection that would make more complete measurement possible. |
| Keywords: | Human rights; Measurement; Progressive realization; Inequality; Human Development; Global |
| JEL: | I31 Z0 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-22&r=hap |
| By: | Sakiko Fukuda-Parr (The New School); Terra Lawson-Remer (New York University); Susan Randolph (University of Connecticut) |
| Abstract: | In response to an increasing demand for rigorous monitoring of state accountability in meeting their human rights obligations, a growing literature on human rights measurement has emerged. Yet there are no widely used indicators or indices of human rights obligations fulfillment. This paper proposes a methodology for an index of economic and social rights fulfillment that: uses available survey-based objective, rather than subjective data; focuses on state obligations rather than solely on individual enjoyment of rights; and captures progressive realization of human rights subject to maximum available resources. Two calculation methods are proposed: the ratio approach and the achievement possibilities frontier approach. The paper identifies key conceptual and data constraints. Recognizing the complex methodological challenges, the aim of this paper is not to resolve all the difficulties, but rather to contribute to the process of building rigorous approaches to human rights measurement. The proposed index thus has recognized limitations, yet is an important first step based on available data. Our goal here is to contribute to the longer term development of a methodology for measuring economic and social rights fulfillment. The paper concludes that the proposed index provides important new information compared with other measures of economic and social rights fulfillment, but still does not capture some desired features such as the right to non-discrimination and equality, and the right to social security. The paper also outlines an agenda for longer term research and data collection that would make more complete measurement possible. |
| Keywords: | Human rights; Measurement; Progressive realization; Inequality; Human Development; Global |
| JEL: | I31 Z0 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:ecriwp:8&r=hap |
| By: | Judith Streak (Human Sciences Research Council); Derek Yu (Department of Economics, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch) |
| Abstract: | This paper offers evidence on the sensitivity of child poverty in South Africa to changes in the Adult Equivalence Scale (AES) and updates the child poverty profile based on the Income and Expenditure Survey 2005/06. Setting the poverty line at the 40th percentile of households calculated with different AESs the scope and composition of child poverty are found to be relatively insensitive to the scale used. The rankings of children of different ages, girls versus boys, racial groupings and children living in rural versus urban areas are unaffected by choice of AES, although some provincial rankings on the poverty headcount measure are. The proportions of children and households ‘correctly’ identified as poor for the full range of scales is extremely high. These findings support the argument of Woolard & Leibbrandt (2006) that it may be appropriate for profiling poverty in South Africa to use a poverty line based on a per capita welfare measure. For the construction of the child poverty profile, per capita income is used as the welfare indicator with the poverty line set at the 40th percentile of household. The profile suggests that poverty amongst children is more extensive than amongst the population or adults even after the massive injection of transfers into households with poor children through the child support grant. The child poverty headcount, depth and severity are all highest amongst children age 0-4 and lowest amongst those aged 15-17, who are not yet beneficiaries of the grants. They are also highest amongst African and Coloured children. Large variations across provinces remain. The analysis underlines the importance of prioritising children in the fight against poverty, particularly in their earliest years. |
| Keywords: | Child poverty measurement, Adult equivalence scales, Social grants for children |
| JEL: | D31 I32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers61&r=hap |
| By: | Randolph Sloof (University of Amsterdam, and IZA); Mirjam van Praag (University of Amsterdam, IZA, and Max Planck Institute of Economics) |
| Abstract: | Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts hinges on two characteristics: noise and distortion. These criteria, though, will only be useful in practice as long as the noise and distortion of a performance measure can be measured. Courty and Marschke (2007) have recently developed an elegant empirical test to detect distortion, based on the degradation of a performance measure subsequent to increasing its weight in the remuneration contract. We apply their test to assess the distortion of the often used class of performance measures that are based on ‘Residual Income’ (RI), such as ‘Economic Value Added’ (EVA). Residual income is widely used to measure and reward the performance of management boards. We use a difference-in-difference approach to account for (a) changes in economic circumstances in the period studied and (b) the self-selection of firms into the treatment and the control groups. Our results show that RI has degraded and is, therefore, a distortionary performance measure that can be gamed. |
| Keywords: | Residual income; EVA; degradation; distortion; performance measurement; management compensation; incentive compensation |
| JEL: | D21 G35 J33 L21 M41 M52 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080072&r=hap |
| By: | Humberto Llavador (Universitat Pompeu Fabra); John E. Roemer (Yale University); Joaquim Silvestre (University of California, Davis) |
| Abstract: | Anthropogenic greenhouse gas (GHG) emissions have caused atmospheric concentrations with no precedents in the last half a million years, inducing serious uncertainties about future climates and their effects on human welfare. Recent climate science supports the view that the climate stabilization will require very low GHG emissions in the future. We ask: Is a path of low emissions compatible with sustainable levels of human welfare? With steady growth in human quality of life? Addressing these questions requires both defining welfare criteria and empirically estimating the possible paths of the economy. We specify and calibrate a dynamic model with four intertemporal links: education, physical capital, knowledge and the environment. In line with Nordhaus (2008a) and with the Stern Review (2007), we assume that GHG emissions allow increased production, while a higher stock of atmospheric carbon decreases production. Our index of human welfare, which we call quality of life (QuoL), emphasizes education, knowledge, and the environment, affected by greenhouse gas emissions, in addition to consumption and leisure. Thus, we avoid a Consumptionist Fallacy –- that welfare depends only on commodity consumption and perhaps leisure. We reject discounted utilitarianism as a normative criterion, and consider two alternatives. The first is an intergenerational maximin criterion, which maximizes the quality of life of the first generation subject to maintaining at least that level for all successive generations. The second is human development optimization, that seeks the maximization of the QuoL of the first generation subject to achieving a given, constant rate of growth in all subsequent generations. Hence, our analysis focuses on a human notion of sustainability, as opposed to the conventional "green" sustainability, limited to keeping the quality of the environment constant. Because our dynamic optimization programs defy explicit analytical solutions, our approach has been computational. As a benchmark, we consider a simple model with physical and human capital, for which we prove a turnpike theorem. We then devise a computational algorithm inspired by the turnpike property to construct feasible, although not necessarily optimal, paths in the more complex and realistic model. Our analysis indicates that, with GHG emission paths entailing very low emissions in the future, positive rates of growth in QuoL are possible while the first generation experiences a QuoL higher than the historical reference level. We also observe a tradeoff between the quality of life of the first generation and the rate of growth in the quality of life. Yet Generation 1's sacrifice for the sake of a higher growth rate appears to be small. The paths that we compute involve investments in knowledge at noticeably higher levels than in the past. |
| Keywords: | Quality of life, Climate change, Education, Maximin, Growth |
| JEL: | D63 O40 O41 Q50 Q54 Q56 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1673&r=hap |
| By: | Scott E. Carrell; Mark L. Hoekstra |
| Abstract: | It is estimated that between ten and twenty percent of children in the United States are exposed to domestic violence annually. While much is known about the impact of domestic violence and other family problems on children within the home, little is known regarding the extent to which these problems spill over to children outside the family. The widespread perception among parents and school officials is that these externalities are significant, though measuring them is difficult due to data and methodological limitations. We estimate the negative spillovers caused by children from troubled families by exploiting a unique data set in which children's school records are matched to domestic violence cases filed by their parent. To overcome selection bias, we identify the effects using the idiosyncratic variation in peers from troubled families within the same school and grade over time. We find that children from troubled families significantly decrease their peers' reading and math test scores and significantly increase misbehavior of others in the classroom. The effects are heterogeneous across income, race, and gender and appear to work primarily through troubled boys. The results are robust to within-sibling differences and we find no evidence that non-random selection is driving the results. |
| JEL: | I2 J24 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14246&r=hap |