New Economics Papers
on Economics of Happiness
Issue of 2007‒04‒21
eight papers chosen by

  1. The Reliability of Subjective Well-Being Measures By Alan B. Krueger; David A. Schkade
  2. Are Youths on Income Support Less Happy? Evidence from Australia By Wang-Sheng Lee; Umut Oguzoglu
  3. Obesity, Unhappiness, and The Challenge of Affluence: Theory and Evidence By Andrew J. Oswald; Nattavudh Powdthavee
  4. Youth well-being in Brazil : an index for cross-regional comparisons By Leon, Joana Severo; Borges, Vicente Cassepp; Koller, Silvia; Cunningham, Wendy; Dell ' Aglio, Debora
  5. The Hedonistic Paradox: Is Homo Economicus Happier? By Konow, James; Earley, Joseph
  6. On Gender Inequality and Life Satisfaction: Does Discrimination Matter? By Bjørnskov, Christian; Dreher, Axel; Fischer, Justina AV
  7. Great Expectations? The Subjective Well-Being of Rural-Urban Migrants in China By John Knight; Ramani Gunatilaka
  8. Mixed Feelings: Theories and Evidence of Warm Glow and Altruism By Konow, James

  1. By: Alan B. Krueger (Princeton University and IZA); David A. Schkade (University of California, San Diego)
    Abstract: This paper studies the test-retest reliability of a standard self-reported life satisfaction measure and of affect measures collected from a diary method. The sample consists of 229 women who were interviewed on Thursdays, two weeks apart, in Spring 2005. The correlation of net affect (i.e., duration-weighted positive feelings less negative feelings) measured two weeks apart is 0.64, which is slightly higher than the correlation of life satisfaction (r=0.59). Correlations between income, net affect and life satisfaction are presented, and adjusted for attenuation bias due to measurement error. Life satisfaction is found to correlate much more strongly with income than does net affect. Components of affect that are more person-specific are found to have a higher test-retest reliability than components of affect that are more specific to the particular situation. While reliability figures for subjective well-being measures are lower than those typically found for education, income and many other microeconomic variables, they are probably sufficiently high to support much of the research that is currently being undertaken on subjective well-being, particularly in studies where group means are compared (e.g., across activities or demographic groups).
    Keywords: test-retest reliability, self-reported, life satisfaction, diary method
    JEL: I31 J0
    Date: 2007–04
  2. By: Wang-Sheng Lee (University of Melbourne); Umut Oguzoglu (University of Melbourne and IZA)
    Abstract: The central research question addressed in this paper is how receipt of income support payments affects the well-being of youths. Using 1997-2004 panel data from a nationally representative survey of Australian youths, we attempt to estimate the size of the welfare stigma faced by Australian youths, where stigma is defined as the effect of welfare receipt on reported happiness levels. In analysing the determinants of happiness, we argue that it is important to control for dynamics and initial conditions. The latter arguably measures an initial setpoint of happiness which the psychological literature has found strong support for. In contrast to the general findings of the existence of a welfare stigma for adults, based on our results using dynamic panel probit models, our findings suggest that for Australian youths, there is a small negative but not statistically significant stigma associated with welfare receipt.
    Keywords: well-being, happiness, welfare stigma, youths
    JEL: I31 I38 C33
    Date: 2007–03
  3. By: Andrew J. Oswald (University of Warwick and IZA); Nattavudh Powdthavee (IoE, University of London)
    Abstract: Is affluence a good thing? The book The Challenge of Affluence by Avner Offer (2006) argues that economic prosperity weakens self-control and undermines human well-being. Consistent with a pessimistic view, we show that psychological distress has been rising through time in modern Great Britain. Taking over-eating as an example, our data reveal that half the British population view themselves as overweight, and that happiness and mental health are worse among fatter people in both Britain and Germany. A 10-point move up in body mass index (BMI) is associated in the cross-section with a drop in psychological health of approximately 0.3 GHQ points. Comparisons also matter. For a given level of BMI, we find that people who are educated or who have high income are more likely to view themselves as overweight. We discuss problems of inference and argue that longitudinal data on BMI are needed. We suggest a theory of imitation - where utility depends on relative weight - in which there can be obesity spirals after only small drops in the price of food.
    Keywords: body mass index, happiness, mental health, General Health Questionnaire, GHQ scores, BMI, well-being, obesity, BHPS, GSOEP, imitation, weight, relative income, comparisons
    JEL: D1 I12 I31
    Date: 2007–03
  4. By: Leon, Joana Severo; Borges, Vicente Cassepp; Koller, Silvia; Cunningham, Wendy; Dell ' Aglio, Debora
    Abstract: This study constructs three indices to measure how well Brazil ' s young people are surviving their transition to adulthood. Youth development is difficult to quantify because of the multi-dimensionality of youth b ehavior. Most monitoring use individual indicators in specific sectors, making it difficult to track overall progress. The study adapts to the Brazilian case a methodology developed by Duke University to measure the well-being of U.S. children and youth. It uses readily available data to construct three indices for each Brazilian state based on 36 indicators encompassing the health, behavior, school performance, institutional connectedness, and socioeconomic conditions. The indices conclude that young people in the states of Santa Catarina and the Federal District are doing particularly well and those in Alagoas and Pernambuco are the worst off. While these rankings are expected to continue into the next generation, young people in other states have a brighter (Espiritu Santo) or more dismal (Rio Grande de Sul, Tocatins) future due to underinvestment in today ' s children. Still others (Rio de Janeiro) are underutilizing their resources so their young citizens are in a worse situation than they could be if the state were to invest more. The hope is that the methodology can be used in Brazil as it has been used in the United States to estimate the indices annually, thus allowing policymakers, young people, and society to track the well-being of youth in each state over time.
    Keywords: Health Monitoring & Evaluation,Adolescent Health,Youth and Governance,Population Policies,Children and Youth
    Date: 2007–04–01
  5. By: Konow, James; Earley, Joseph
    Abstract: The “Hedonistic Paradox” states that homo economicus, or someone who seeks happiness for him- or herself, will not find it, but the person who helps others will. This study examines two questions in connection with happiness and generosity. First, do more generous people, as identified in dictator experiments, report on average greater happiness, or subjective well-being (SWB), as measured by responses to various questionnaires? Second, if the answer is affirmative, what is the causal relationship between generosity and happiness? We find a favorable correlation between generosity and happiness (i.e., SWB is directly related to several measures of happiness and inversely related to unhappiness) and examine various possible explanations, including that material well-being causes both happiness and generosity. The evidence from this experiment, however, indicates that a tertiary personality variable, sometimes called psychological well-being, is the primary cause of both happiness and greater generosity. In contrast to field studies, the experimental method of this inquiry permits anonymity measures designed to minimize subject misrepresentation of intrinsic generosity (e.g., due to social approval motives) and of actual happiness (e.g., because of social desirability biases) and produces a rich data set with multiple measures of subjective, psychological and material well-being. The results of this and other studies raise the question of whether greater attention should be paid to the potential benefits (beyond solely the material ones) of policies that promote charitable donations, volunteerism, service education, and, more generally, community involvement, political action, and social institutions that foster psychological well-being.
    Keywords: Happiness; Subjective well-being; Altruism; Generosity; Psychological well-being; Eudaimonia
    JEL: D64 C91
    Date: 2007–03
  6. By: Bjørnskov, Christian (Aarhus School of Business); Dreher, Axel (ETH Zurich, KOF Swiss Economic Institute, and CESifo); Fischer, Justina AV (Dept. of Economics, Stockholm School of Economics)
    Abstract: This paper analyzes the impact of gender discrimination on individual life satisfaction using a cross-section of 66 countries. We employ measures of discrimination of women in the economy, in politics, and in society more generally. According to our results, discrimination in politics is important to individual well-being. Overall, men and women are more satisfied with their lives when societies become more equal. Disaggregated analysis suggests that our results for men are driven by the effect of equality on men with middle and high incomes, and those on the political left. To the contrary, women are more satisfied with increasing equality independent of income and political ideology. Equality in economic and family matters does overall not affect life satisfaction. However, women are more satisfied with their lives when discriminatory practices have been less prevalent in the economy 20 years ago.
    Keywords: Gender gap; happiness; well-being; discrimination; life satisfaction
    JEL: I31 J16
    Date: 2007–04–08
  7. By: John Knight; Ramani Gunatilaka
    Abstract: This paper may be the first to link the literatures on migration and on subjective well-being in developing countries. It poses the question: why do rural-urban migrant households settled in urban China have an average happiness score lower than that of rural households? Three basic hypotheses are examined: migrants had false expectations about their future urban conditions, or about their future urban aspirations, or about their future selves. Estimated happiness functions and decomposition analyses, based on a 2002 national household survey, indicate that certain features of migrant conditions make for unhappiness, and that their high aspirations in relation to achievement, influenced by reference groups, also make for unhappiness. It is difficult to form unbiased expectations about life in a new and different world.
    Keywords: Rural-urban migration, Subjective well-being, Happiness, Relative deprivation, Aspirations, China
    JEL: I32 O15
    Date: 2007
  8. By: Konow, James
    Abstract: This paper presents theoretical and empirical analyses of experiments that test competing theories of altruism, including pure altruism (a preference for the well-being of others), warm glow (a good feeling from giving) and impure altruism (a combination of pure altruism and warm glow). These theories produce different predictions regarding crowding out, i.e., the reduction in private donations due to public spending. Variations on dictator experiments involving both students and charities examine the incidence of crowding out and provide a new direct measure of the effect of giving on feelings. The results indicate that crowding out is incomplete, i.e., less than dollar for dollar. The evidence on warm glow suggests mixed feelings: giving may be associated with good or bad feelings, depending on the context. As a way to resolve apparent inconsistencies and reconcile the evidence on crowding out and feelings, this paper proposes a theory of conditional altruism, which extends previous models to incorporate social norms that arise in the workplace, marketplace and laboratory.
    Keywords: Altruism; Warm-Glow; Happiness; Efficiency; Fairness; Justice; Need
    JEL: D64 D63
    Date: 2006–09

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