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on Economics of Happiness |
|
Issue of 2018‒09‒10
eight papers chosen by |
| By: | Michal Brzezinski (University of Warsaw) |
| Abstract: | We use data from the World Wealth \& Income Database, the European Values Surveys and World Values Surveys to estimate the relationship between top income shares and subjective well-being in a sample of 35 countries observed between 1980s and 2010s (139 surveys and more than 200,000 respondents). Results show that top 1\% income shares are positively associated with happiness, but not with life satisfaction. The effect is present in a subsample of Western countries. We discuss possible explanations for the positive association between top income shares and happiness. |
| Keywords: | top incomes, subjective well-being, life satisfaction, happiness, income inequality, World Wealth \& Income Database. |
| JEL: | D63 I31 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2018-471&r=hap |
| By: | Conchita D’Ambrosio (Université du Luxembourg); Andrew E. Clark (Paris School of Economics - CNRS); Marta Barazzetta (Université du Luxembourg) |
| Abstract: | We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective future job quitting. In six waves of German Socio-Economic Panel data, the extent to which own labour income is perceived to be unfair is significantly negatively correlated with subjective well-being, both in terms of cognitive evaluations (life and job satisfaction) and affect (the frequency of feeling happy, sad and angry). Perceived unfairness also translates into objective labour-market behaviour, with current unfair income predicting future job quits. |
| Keywords: | Fair income, subjective well-being, quits, SOEP. |
| JEL: | D63 J28 J31 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2018-459&r=hap |
| By: | Martín Leites (University of la República, Uruguay); Xavier Ramos (Universitat Autònoma de Barcelona, Spain) |
| Abstract: | Income comparisons are important for individual well-being. We examine the shape of the relationship between relative income and life satisfaction, and test empirically if the features of the value function of prospect theory carry on to experienced utility. We draw on a unique dataset for a middle-income country, that allows us to work with an endogenous reference income, which differs for individuals with the same observable characteristics, depending on the perception error about their relative position in the distribution. We find the value function for experienced utility to be concave for both positive and, at odds with prospect theory, also negative relative income. Loss aversion is only satisfied for incomes that are sufficiently distant from the reference income. Our heterogeneity analysis shows that the slope of the value function differs across individuals who care differently about income comparisons, people with different personality traits, or social beliefs. |
| Keywords: | Life satisfaction, relative income, loss aversion, prospect theory. |
| JEL: | D6 I31 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2018-461&r=hap |
| By: | Blanchflower, David G.; Oswald, Andrew J. |
| Abstract: | In Happiness for All?, Carol Graham raises disquieting ideas about today’s United States. The challenge she puts forward is an important one. Here we review the intellectual case and offer additional evidence. We conclude broadly on the author’s side. Strikingly, Americans appear to be in greater pain than citizens of other countries, and most subgroups of citizens have downwardly trended happiness levels. There is, however, one bright side to an otherwise dark story. The happiness of black Americans has risen strongly since the 1970s. It is now almost equal to that of white Americans. |
| Keywords: | Financial Economics |
| Date: | 2018–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwarer:269079&r=hap |
| By: | Petilliot, René |
| Abstract: | This paper provides the first empirical analysis of the (short-term) welfare consequences of an alcohol ban. Using subjective well-being data to proxy individual welfare, I apply a regression discontinuity design where the date of the implementation of the ban in the German federal state of Baden-Wuerttemberg functions as discontinuity. I find that the ban reduces life satisfaction of the total population and the subpopulation of drinkers, while life satisfaction of nondrinkers is unaffected. My findings are well in line with the rational addiction model perspective. |
| Keywords: | Alcohol ban,Well-being,Life satisfaction,Welfare,Addiction,Regression discontinuity design |
| JEL: | D04 D60 H30 I31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fzgdps:67&r=hap |
| By: | Akee, Randall K. Q. (University of California, Los Angeles); Zhao, Liqiu (Renmin University of China); Zhao, Zhong (Renmin University of China) |
| Abstract: | China's new Labor Contract Law, which intended to strengthen the labor protection for workers, went into effect on January 1, 2008. The law stipulated that the maximum cumulative duration of successive fixed-term (temporary) labor contracts is 10 years, and employees working for the same employer for more than 10 consecutive years are able to secure an open-ended (permanent) labor contract under the new law, which is highly desirable to employees. However, in order to circumvent the new Labor Contract Law, some employers may have dismissed workers, after the passage of the new law, who had worked in the same firm for more than 10 years. Using data from the 2008 China General Social Survey, we find strong evidence that firms did in fact dismiss their formal-contract employees who have been employed for more than 10 years. Additionally, using a regression discontinuity design based on this exogenous change in unemployment status for this particular group of workers, we show that the dismissed workers suffered significant welfare loss in terms of happiness. Our results are robust to various specifications and placebo tests. |
| Keywords: | labor contract law, unemployment, happiness, regression discontinuity design, China |
| JEL: | J41 J64 I31 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11705&r=hap |
| By: | Ajit Zacharias; Thomas N. Masterson; Fernando Rios-Avila |
| Abstract: | This paper documents the sources of data used in the construction of the estimates of the Levy Institute Measure of Economic Wellbeing (LIMEW) for the years 1959, 1972, 1982, 1989, 1992, 1995, 2000, 2001, 2004, 2007, 2010, and 2013. It also documents the methods used to combine the various sources of data into the synthetic dataset used to produce each year's LIMEW estimates. |
| Keywords: | Levy Institute Measure of Economic Wellbeing (LIMEW); Statistical Matching; Synthetic Datasets |
| JEL: | D31 C10 H23 I30 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_912&r=hap |
| By: | Mujcic, Redzo; Oswald, Andrew J. |
| Abstract: | Nearly 100 years ago, the philosopher and mathematician Bertrand Russell warned of the social dangers of widespread envy. One view of modern society is that it is systematically developing a set of institutions -- such as social media and new forms of advertising -- that make people feel inadequate and envious of others. If so, how might that be influencing the psychological health of our citizens? This paper reports the first large-scale longitudinal research into envy and its possible repercussions. The paper studies 18,000 randomly selected individuals over the years 2005, 2009, and 2013. Using measures of SF-36 mental health and psychological well-being, four main conclusions emerge. First, the young are especially susceptible. Levels of envy fall as people grow older. This longitudinal finding is consistent with a cross-sectional pattern noted recently by Nicole E. Henniger and Christine R. Harris, and with the theory of socioemotional regulation suggested by scholars such as Laura L. Carstensen. Second, using fixed-effects equations and prospective analysis, the analysis reveals that envy today is a powerful predictor of worse SF-36 mental health and well-being in the future. A change from the lowest to the highest level of envy, for example, is associated with a worsening of SF-36 mental health by approximately half a standard deviation (p <0.001). Third, no evidence is found for the idea that envy acts as a useful motivator. Greater envy is associated with slower -- not higher -- growth of psychological well-being in the future. Nor is envy a predictor of later economic success. Fourth, the longitudinal decline of envy leaves unaltered a U-shaped age pattern of well-being from age 20 to age 70. These results are consistent with the idea that society should be concerned about institutions that stimulate large-scale envy. |
| Keywords: | Financial Economics |
| Date: | 2018–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwarer:269078&r=hap |