nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒05‒17
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Insuring Well-being: Psychological Adaptation to Disasters By Yoo, Sunbin; Kawabata, Yuta; Kumagai, Junya; Keeley, Alexander; Managi, Shunsuke
  2. The Determinants of the Link between Life Satisfaction and Job Satisfaction across Europe By Natalia Soboleva
  3. Weather-Related House Damage and Subjective Wellbeing By Nicholas Gunby; Tom Coupé
  4. Trade effects on happiness in Asia By Heß, Alexander; Hindermann, Christoph Michael
  5. New Zealand's happiness and COVID-19: a Markov Switching Dynamic Regression Model By Rossouw, Stephanie; Greyling, Talita; Adhikari, Tamanna

  1. By: Yoo, Sunbin; Kawabata, Yuta; Kumagai, Junya; Keeley, Alexander; Managi, Shunsuke
    Abstract: We examine the impact of life and health insurance spending on subjective well-being. Taking advantage of insurance spending and subjective well-being data on more than 700,000 individuals in Japan, we examine whether insurance spending can buffer declines in subjective well-being due to exposure to mass disaster. We find that insurance spending can buffer drops in subjective well-being by approximately 3-6% among those who experienced the mass disaster of the great East Japan earthquake. Subjective health increases the most, followed by life satisfaction and happiness. On the other hand, insurance spending decreases the subjective well-being of those who did not experience the earthquake by approximately 3-7%. We conclude by monetizing the subjective well-being loss and calculating the extent to which insurance spending can compensate for it. The monetary value of subjective well-being buffered through insurance spending is approximately 33,128 USD for happiness, 33,287 USD for life satisfaction, and 19,597 USD for subjective health for a person in one year. Therefore, we confirm that life/health insurance serves as an ideal option for disaster adaptation. Our findings indicate the importance of considering subjective well-being, which is often neglected when assessing disaster losses.
    Keywords: Risk; Insurance; Great East Japan Earthquake; Subjective Well-being;
    JEL: H0 I13 Q5 Q54
    Date: 2021–04
  2. By: Natalia Soboleva (National Research University Higher School of Economics)
    Abstract: Work forms one of the important spheres of life and is one of the main determinants of subjective well-being in general and life satisfaction in particular (Argyle 2001; Sousa-Poza & Sousa-Poza 2000). The study aims to disclose the impact of work values and socio-demographic characteristics upon the link between life satisfaction and job satisfaction. The European Values Study 2008-2009 is used as dataset. The sample is limited to those who have jobs (28 653 cases). The results confirm findings from the literature that intrinsic motivation increases life satisfaction (Vansteenkiste 2007). It is in line with self-determination theory according to which pursuit of intrinsic motivation facilitates satisfaction of the basic psychological needs for autonomy, competence and relatedness (Deci & Ryan, 2000; Kasser, 2002). Sharing extrinsic values decreases life satisfaction. The association between life satisfaction and job satisfaction is stronger for higher educated individuals and self-employed and weaker for women, married individuals, religious individuals and those of younger age. These results are due to the different of job in life of people with different characteristics. The link between life satisfaction and job satisfaction is the same in countries with low and high GDP per capita
    Keywords: life satisfaction, job satisfaction, subjective well-being, work values, European Values Study
    JEL: I31 J28 J01 Z13
    Date: 2021
  3. By: Nicholas Gunby; Tom Coupé (University of Canterbury)
    Abstract: Climate change is causing weather-related natural disasters to become both more frequent and more severe. We contribute to the literature that estimates the economic impact of these disasters by using Australian data for the period 2009 to 2018 to estimate the impact of experiencing weather-related house damage on three measures of subjective wellbeing. While there is some evidence that poor people experience a sizeable and statistically significant decrease in subjective wellbeing following weather-related house damage, we find little evidence of a significant or sizable effect on average. In contrast, we find that, on average, both separation and job loss have a large and statistically significant impact on subjective wellbeing.
    Keywords: climate change; subjective wellbeing; weather; disasters
    JEL: Q54 I31
    Date: 2021–05–01
  4. By: Heß, Alexander; Hindermann, Christoph Michael
    Abstract: The Belt and Road Initiative is an unparalleled China-initiated international infrastructure project. Since its launch, international trade has already increased in the participating countries - a trend that is only there to stay. However, this development is not seen only in a positive light, and to date it is unclear whether it will exclusively benefit the participating countries in the long term or whether it will drag them into debt. In this piece, we investigate possible trade effects that go beyond the proclaimed monetary ones. We check if these projected increases of trade (trade volume and trade freedom) affect mean levels of subjective well-being (SWB) in Asian countries. Applying a fixed effects model, we find no evidence that sheer trade volume nor trade freedom directly affect mean levels of SWB in Asian countries. However, we find measures of wealth (GDP per capita, Human Development Index [HDI]) as well as the unemployment rate to affect SWB at the country level. This may indicate an indirect effect of trade on SWB that is channeled by GDP. Nonetheless, there could be a link between trade and SWB, as it may take some time for the effects/changes of trade to trickle down to SWB. Other possibilities are discussed in detail.
    Keywords: Trade volume,freedom of trade,happiness,subjective well-being
    Date: 2021
  5. By: Rossouw, Stephanie; Greyling, Talita; Adhikari, Tamanna
    Abstract: Happiness levels (states) are volatile and often fluctuate between a happy and unhappy state from one day to the next. The reasons for these shifts are mostly unobservable and not predictable. In this paper, we fit a Marko Switching Dynamic Regression Model (MSDR) to better understand the dynamic patterns of happiness levels before and during a pandemic. The estimated parameters from the MSDR model include each state's mean and duration, volatility and transition probabilities. Once these parameters have been estimated, we predict the unobserved states' evolution over time using the one-step method. This gives us unique insights into the evolution of happiness. Furthermore, as maximising happiness is a policy priority, we determine the factors that can contribute to the probability of increasing happiness levels. We empirically test these models using New Zealand's daily happiness data for May 2019 - November 2020. The results show that New Zealand seems to have two regimes, an unhappy and happy regime. In 2019 the happy regime dominated; thus, the probability of being unhappy in the next time period (day) occurred less frequently, whereas the opposite is true for 2020. The higher frequencies of time periods with probabilities to be unhappy in 2020 mostly correspond to the pandemic events. Lastly, we find the factors positively and significantly related to the probability of being happy after lockdown to be jobseeker support payments and international travel. On the other hand, mobility is significantly and negatively related to the probability of being happy.
    Keywords: Happiness,COVID-19,Big data,Markov switching dynamic regression model,New Zealand
    JEL: I12 I31 J18
    Date: 2021

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