nep-hap New Economics Papers
on Economics of Happiness
Issue of 2007‒04‒28
thirteen papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. No Man is an Island, the Inter-personal Determinants of Regional Well-Being in Europe By Aslam, A.; Corrado, L.
  2. Housing, health, and happiness By Titiunik, Rocio; Martinez, Sebastian; Gertler, Paul J.; Galiano, Sebastian; Cattaneo, Matias D.
  3. Measuring welfare gains from better quality infrastructure By Lokshin, Michael; Klytchnikova, Irina
  4. The Power of the Family By Alberto Alesina; Paola Giuliano
  5. On Gender Inequality and Life Satisfaction: Does Discrimination Matter? By Justina A.V. Fischer; Christian Bjornskov; Axel Dreher
  6. The capability dilemma in operational poverty assessment By Julia Johannsen; Manfred Zeller; Stephan Klasen
  7. Pauvreté et inégalités en Tunisie: une approche non monétaire By Mohamed Ayadi; AbdelRahmen El Lahga; Naouel Chtioui
  8. Modelling Gender Dimensions of the Impact of Economic Reforms in Pakistan By Rizwana Siddiqui
  9. Community, Comparisons and Subjective Well-being in a Divided Society By Geeta Kingdon; John Knight
  10. Subjective Well-being Poverty versus Income Poverty and Capabilities Poverty? By Geeta Kingdon; John Knight
  11. Pour l'interdiction totale du travail des enfants et une redistribution mondiale des richesses. By Rémy Herrera
  12. Enhancing the Quality of Data on the Measurement of Income and Wealth By F. Thomas Juster; Honggao Cao; Mick Couper; Daniel H. Hill; Michael Hurd; Joseph P Lupton; Michael Perry; James P. Smith
  13. Self-Assessed Retirement Outcomes: Determinants and Pathways By Susann Rohwedder

  1. By: Aslam, A.; Corrado, L.
    Abstract: There is a strong need to complement the analysis of social well-being at the European regional level to supplement existing, predominantly economic analysis. This work extends the measurement of well-being across the EU-15 regions in several ways. First, we assess the determinants of well-being using a multilevel modelling approach using data at the national, regional and individual levels. Second, we have extended the model to account for the effects of social interactions within each group, as well as intrinsic socio-demographic indicators and higher-level exogenous contextual factors. Empirical findings support the idea that well-being is strongly dependent both on these general forms of social interactions and on more specific individual characteristics. We find that there is some evidence of greater regional effects relative to national effect.
    Keywords: Multilevel Modelling, Regional Well-Being, Social Interactions, Social Distance.
    JEL: R1 I31 O18 D31 D6
    Date: 2007–04
  2. By: Titiunik, Rocio; Martinez, Sebastian; Gertler, Paul J.; Galiano, Sebastian; Cattaneo, Matias D.
    Abstract: Despite the importance of housing for people ' s well-being, there has been little work done to assess the causal impact of housing and housing improvement programs on health and welfare. In this paper the authors help fill this gap by investigating the impact of a large-scale effort by the Mexican government to replace dirt floors with cement floors on child health and adult happiness. They find that replacing dirt floors with cement floors significantly reduces parasitic infestations in young children, reduces diarrhea, reduces anemia, and improves cognitive development. Finally, they also find that this program leave adults substantially better off, as measured by satisfaction with their housing and quality of life and by their significantly lower rates of depression and perceived stress.
    Keywords: Health Monitoring & Evaluation,Disease Control & Prevention,Housing & Human Habitats,Construction Industry,Economic Theory & Research
    Date: 2007–04–01
  3. By: Lokshin, Michael; Klytchnikova, Irina
    Abstract: Projects and reforms targeting infrastructure services can affect consumer welfare through changes in the price, coverage, or quality of the services provided. The benefits of improved service quality-while significant-are often overlooked because they are difficult to quantify. This paper reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The paper also presents the theoretical underpinnings and potential applications of a new approach to analyzing the effects of interruptions in the supply of infrastructure services on household welfare.
    Keywords: Energy Production and Transportation,Town Water Supply and Sanitation,Markets and Market Access,Economic Theory & Research,Water and Industry
    Date: 2007–04–01
  4. By: Alberto Alesina; Paola Giuliano
    Abstract: The structure of family relationships influences economic behavior and attitudes. We define our measure of family ties using individual responses from the World Value Survey regarding the role of the family and the love and respect that children need to have for their parents for over 70 countries. We show that strong family ties imply more reliance on the family as an economic unit which provides goods and services and less on the market and on the government for social insurance. With strong family ties home production is higher, labor force participation of women and youngsters, and geographical mobility, lower. Families are larger (higher fertility and higher family size) with strong family ties, which is consistent with the idea of the family as an important economic unit. We present evidence on cross country regressions. To assess causality we look at the behavior of second generation immigrants in the US and we employ a variable based on the grammatical rule of pronoun drop as an instrument for family ties. Our results overall indicate a significant influence of the strength of family ties on economic outcomes.
    JEL: H20 J01
    Date: 2007–04
  5. By: Justina A.V. Fischer; Christian Bjornskov; Axel Dreher
    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
  6. By: Julia Johannsen; Manfred Zeller; Stephan Klasen
    Abstract: This paper compares the standard economic welfare approach to poverty measurement to the empirical approaches proposed in the capability literature under the special focus of their suitability for operational poverty assessment, i.e. targeting and outreach evaluation. We question whether the measurement of per capita daily expenditures compared with a monetary poverty line justifiably remains the most widely used approach regarding poverty assessment. Its underlying value judgments and unsatisfactory assumptions differ considerably from those of the capability concept of poverty but the two approaches can be linked and critically compared with respect to the role of income, the conceptualisation of absolute poverty and the development of operational tools. We argue that despite the progress made in operationalizing the capability approach, there remain serious challenges when focussing on targeting and outreach evaluation and propose three alternative solutions for dealing with this capability dilemma in practice.
    Date: 2007–03–19
  7. By: Mohamed Ayadi; AbdelRahmen El Lahga; Naouel Chtioui
    Abstract: Dans ce travail nous construisons un indice composite de bien-être (ICBE) basé sur des attributs non monétaires des conditions de vie des ménages afin d'analyser l'évolution de la pauvreté et des inégalités en Tunisie, entre 1988 et 2001, dans une perspective multidimensionnelle. Nous montrons que la pauvreté a connu une baisse significative durant la période d'étude, bien que les disparités régionales et celles entre milieux de résidence aient connu une certaine constance. La pauvreté est restée toujours un phénomène rural et les régions les plus pauvres du pays, en l'occurence le nord (NO) et le centre ouest (CO) sont toujours les régions les plus démunies. Par ailleurs, l'amélioration des conditions de logement et l'accès aux moyens de communications sont des options non exploitées pouvant avoir des effets marginaux assez importants dans la réduction de la pauvreté. Par ailleurs les inégalités ont connu une forte baisse durant la période d'étude. Toutefois, les régions les plus pauvres et le milieu rural contribuent le plus aux inégalités totales. La décomposition des inégalités par source motnre que l'accès aux moyens de communication et la possession des biens durables contribuent fortement aux écarts de bien-être entre les ménages.
    Keywords: pauvreté, inégalité, Tunisie
    JEL: D31 D63 I30 I32
    Date: 2007
  8. By: Rizwana Siddiqui
    Abstract: Recently, gender-aware computable general equilibrium models (CGE) have been developed to analyse the impact of trade liberalization, with focus on a gender-disaggregated analysis of the production side of the economy. However, these studies ignore the gender-specific consumption effects due to the paucity of gender disaggregated data. We introduce intra-household allocation for the first time in a CGE-framework. The data is arranged in a gender-aware social accounting matrix, which reveals the hidden work of women (market and non-market). This study analyses the gender dimensions of the impact of economic reforms using three types of poverty indicators - FGT, capability, and relative time poverty - calculated on the basis of the simulation results. The study mainly found out that both trade liberalization and cuts in government expenditure are pro-rich. Within poor households, both policies hurt women more than men. Despite declines in absolute poverty in both exercises, the gender composition of the poor population changes in the majority of households. In the trade liberalization exercise, poverty among women relative to men increases in poor households and decreases among the rich, leading to an overall increase in the relative poverty of women in Pakistan. However, in the fiscal adjustment exercise, the incidence of poverty remains constant. In both exercises, time poverty among women relative to men increases in rural areas and decreases in urban areas, leading to an increase in relative poverty among women in Pakistan. The poverty of capabilities among men and women increases in a similar way after trade liberalization when measured by the infant mortality rate, but it affects women more negatively when measured by the literacy rate. Cuts in government expenditure also increase capability poverty among women more than men in both regions and in Pakistan as a whole. The study concludes that prosperity (increase in income), as well as education, can help reduce the gender gap as poverty decreases in relatively rich households, whether it is measured in monetary terms, capability terms, or in terms of time-use.
    Keywords: Pakistan, Gender, CGE, Trade Policy, Public Policy, Time Allocation, Household Production and Intra-House Allocation, Poverty and Capability Development
    JEL: O53 J16 C68 O24 J38 J22 D13 I32
    Date: 2007
  9. By: Geeta Kingdon; John Knight (Department of Economics, University of Oxford)
    Abstract: Abstract: Using a South African data set, the paper poses six questions about the determinants of subjective well-being. Much of the paper is concerned with the role of relative concepts. We find that comparator income – measured as average income of others in the local residential cluster – enters the household’s utility function positively but that income of more distant others (others in the district or province) enters negatively. The ordered probit equations indicate that, as well as comparator groups based on spatial proximity, race-based comparator groups are important in the racially divided South African society. It is also found that relative income is more important to happiness at higher levels of absolute income. Potential explanations of these results, and their implications, are considered.
    Keywords: South Africa: poverty, well-being, absolute income, household’s utility function
    JEL: A1
    Date: 2005–07
  10. By: Geeta Kingdon; John Knight (Department of Economics, University of Oxford)
    Abstract: Abstract: The conventional approach of economists to the measurement of poverty in poor countries is to use measures of income or consumption. This has been challenged by those who favour broader criteria for poverty and its avoidance. These include the fulfilment of ‘basic needs’, the ‘capabilities’ to be and to do things of intrinsic worth, and safety from insecurity and vulnerability. This paper asks: to what extent are these different concepts measurable, to what extent are they competing and to what extent complementary, and is it possible for them to be accommodated within an encompassing framework? There are two remarkable gaps in the rapidly growing literature on subjective well-being. First, reflecting the availability of data, there is little research on poor countries. Second, within any country, there is little research on the relationship between well-being and the notion of poverty. This paper attempts to fill these gaps. Any attempt to define poverty involves a value judgement as to what constitutes a good quality of life or a bad one. We argue that an approach which examines the individual’s own perception of well-being is less imperfect, or more quantifiable, or both, as a guide to forming that value judgement than are the other potential approaches.We develop a methodology for using subjective well-being as the criterion for poverty, and illustrate its use by reference to a South African data set containing much socio-economic information on the individual, the household and the community, as well as information on reported subjective well-being. We conclude that it is possible to view subjective well-being as an encompassing concept, which permits us to quantify the relevance and importance of the other approaches and of their component variables. The estimated subjective well-being functions for South Africa contain some variables corresponding to the income approach, some to the basic needs (or physical functioning) approach, some to the relative (or social functioning) approach, and some to the security approach. Thus, our methodology effectively provides weights of the relative importance of these various components of subjective well-being poverty.
    Keywords: South Africa: poverty, well-being, measures of income, consumption
    JEL: A1
    Date: 2005–07
  11. By: Rémy Herrera (Centre d'Economie de la Sorbonne)
    Abstract: This working paper dealing with the right to education is at the origin of a written statement presented by the Centre Europe Tiers-Monde (CETIM) during the March 2007 4th session of the Human Rights Council of the United Nations Organization in Geneva (item 2 : implementation of the General Assembly Resolution 60/251 of 15 March 2006, symbol : A/HRC/4/NGO/19). It analyzes child labour as a phenomenon not only massive (today, it could concern in the world more than 400 million children over 5 years of age), but also systemic in capitalism. It is urgent to obtain strict respect for the prohibition of child labour -the age limit to be decided internationally- and to enforce compulsory education, at the same time as establishing a true system of wealth redistribution worldwide.
    Keywords: Children, labour/work, education, development.
    JEL: I3 J13 J82 K14 K31
    Date: 2007–04
  12. By: F. Thomas Juster (University of Michigan); Honggao Cao (Wells Fargo); Mick Couper (University of Michigan); Daniel H. Hill (University of Michigan); Michael Hurd (RAND); Joseph P Lupton (Federal Reserve); Michael Perry (University of Michigan); James P. Smith (RAND)
    Abstract: Over the last decade or so, a substantial effort has gone into the design of a series of methodological investigations aimed at enhancing the quality of survey data on income and wealth. These investigations have largely been conducted at the Survey Research Center at the University of Michigan, and have mainly involved two longitudinal surveys: the Health and Retirement Study (HRS), with a first wave beginning in 1992 and continued thereafter every other year through 2004; and the Assets and Health Dynamics Among the Oldest Old (AHEAD) Study, begun in 1993 and continued in 1995 and 1998, then in every other year through 2006. This paper provides an overview of the main studies and summarizes what has been learned so far. The studies include; a paper by Juster and Smith (Improving the Quality of Economic Data: Lessons from the HRS and AHEAD, JASA, 1997); a paper by Juster, Cao, Perry and Couper (The Effect of Unfolding Brackets on the Quality of Wealth Data in HRS, MRRC Working Paper, WP 2006-113, January 2006); a paper by Hurd, Juster and Smith (Enhancing the Quality of Data on Income: Recent Innovations from the HRS, Journal of Human Resources, Summer 2003); a paper by Juster, Lupton and Cao (Ensuring Time-Series Consistency in Estimates of Income and Wealth, MRRC Working Paper, WP 2002-030, July 2002); a paper by Cao and Juster (Correcting Second-Home Equity in HRS/AHEAD: MRRC Working Paper WP 2004-081, June 2004); and a paper by Rohwedder, Haider and Hurd (RAND Working Paper, 2004).
    Date: 2007–01
  13. By: Susann Rohwedder (RAND)
    Abstract: There is increasing interest among policy makers in measuring well-being in ways that go beyond purely economic indicators, also with special focus on older individuals who constitute an increasing fraction of the population. However there is little consensus on which other indicators should be included. An alternative approach is to use individuals’ own assessments and relate these to a rich set of covariates to find what factors influence individuals’ own perceptions. This is the approach adopted in this paper, using data from the Health and Retirement Study (HRS). Retired respondents are asked how satisfying their retirement has turned out to be, how retirement years compare to pre-retirement years and whether they are worried about not having enough income to get by in retirement. I relate these self-assessed measures to a rich set of covariates to investigate which aspects weigh in individuals’ perceptions. I use the longitudinal nature of the HRS to study the pathways that lead up to the observed retirement outcomes, and to examine the persistence of the outcomes over time. Bad health, changes towards worse health, social isolation and increase in social isolation lead most significantly to lower satisfaction in retirement and a greater sense of financial insecurity in retirement. A short financial planning horizon and past shocks, like unexpected large expenses or divorce, also have a noticeable negative impact.
    Date: 2006–11

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