nep-hap New Economics Papers
on Economics of Happiness
Issue of 2007‒06‒18
seven papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Value of Intangible Job Characteristics in Workers' Job and Life Satisfaction: How much are they worth? By Namkee Ahn
  2. La felicidad de los españoles: Factores explicativos By Namkee Ahn; F. Mochón
  3. Money, Happiness, and Aspirations: An Experimental Study By Michael McBride
  4. The Mirror-Neuron Paradox: How Far is Sympathy from Compassion, Indulgence, and Adulation? By Khalil, Elias
  5. Public Education Expenditure, Growth and Welfare By Konstantinos Angelopoulos; Jim Malley; Apostolis Philippopoulos
  6. A Note on Human Development Indices with Income Equalities By Mishra, SK
  7. Poverty, inequality, and social disparities during China ' s economic reform By Dollar, David

  1. By: Namkee Ahn
    Abstract: Using the data from the Spanish survey on life quality at work, we examine the importance of intangible job characteristics in workers’ job and life satisfaction. Our analysis shows that on both job and life satisfaction, the combined monetary value of intangible job characteristics such as flexibility, independence, social usefulness, pleasant work environment, pride, stress and the perception of receiving an adequate wage, is several times more worthy than that of objective job characteristics such as wage, sector and hours of work. Furthermore, we find that some intangible job characteristics such as flexibility, work environment and stress affect directly workers’ life satisfaction rather than indirectly through their effects on job satisfaction.
  2. By: Namkee Ahn; F. Mochón
    Abstract: El presente trabajo analiza los factores explicativos de la felicidad de los españoles. Los resultados son consistentes con lo establecido por la literatura disponible. Los divorciados y los viudos son notablemente más infelices que los casados, el desempleo a aparece fuertemente correlacionado con la infelicidad, la felicidad aumenta con la renta de forma decreciente, la salud tiene una notable incidencia en la felicidad y la religión se correlaciona positivamente con la felicidad. La inclusión de las expectativas como variable explicativa nos dice que los individuos con expectativas positivas tienden a ser más felices. Al separar el carácter más o menos optimista de los individuos de las expectativas se observa que el optimismo a corto plazo tiene un efecto positivo y significativo sobre la felicidad, mientras que el optimismo a largo plazo no parece tener un efecto significativo. La experiencia pasada también incide sobre la felicidad. Los individuos que han mejorado económicamente se sienten moderadamente más felices, mientras que los que han empeorado se sienten más infelices. Los resultados de relacionar la felicidad con el capital social también son consistentes con lo establecido en la literatura. La variable que hace referencia a si los individuos creen que se puede tener confianza en los demás aparece relacionada positivamente con la felicidad. Aquellas variables que reflejan la confianza que los individuos tienen ante algunas instituciones específicas, en todos los casos reflejan una correlación positiva con la felicidad, siendo la más significativa la que se refiere a las grandes empresas. La inclusión de variables que tratan de captar la incidencia de la ética personal en la felicidad también refleja unos resultados consistentes con lo esperado. Los que rechazan comportamientos menos honestos, como por ejemplo defraudar en materia de impuestos o el soborno, tienden a mostrarse más felices. Los datos, además evidencian un mayor rechazo relativo del soborno que del fraude fiscal.
  3. By: Michael McBride (Department of Economics, University of California-Irvine)
    Abstract: The past decade has witnessed an explosion of interest in the scientific study of happiness. Economists, in particular, find that happiness increases in income but decreases in income aspirations, and this work prompts examination of how aspirations form and adapt over time. This paper presents results from the first experimental study of how multiple factors -- past payments, social comparisons, and expectations -- influence aspiration formation and reported satisfaction. I find that expectations and social comparisons significantly affect reported satisfaction, and that subjects care relatively more about social comparisons once they have achieved a satisfactory outcome. These findings support an aspirations-based theory of happiness.
    Keywords: Satisfaction; Happiness; Adaptation; Experiment
    JEL: C91 I31
    Date: 2007–03
  4. By: Khalil, Elias
    Abstract: The mirror-neuron system (MNS) becomes instigated when the spectator empathizes with the principal’s intention. MNS also involves imitation, where empathy is irrelevant. While the former may attenuate the principal’s emotion, the latter paradoxically reinforces it. This paper proposes a solution of the contradictory attenuation/reinforcement functions of fellow-feeling by distinguishing two axes: “rationality axis” concerns whether the action is efficient or suboptimal; “intentionality axis” concerns whether the intention is “wellbeing” or “evil.” The solution shows how group solidarity differs from altruism and fairness; how revulsion differs from squeamishness; how malevolence differs from selfishness; and how racial hatred differs from racial segregation.
    Keywords: Adam Smith; David Hume; Fellow-Feeling; Desire; Paris Hilton; Animal Rights; Comprehension; Understanding (empathy); Imitation; Status Inequality; Elitism; Authority; Pity: Obsequiousness; Racial Segregation; Racial Hatred; Rationality; Intentionality; Propriety; Impropriety; Revulsion; Stigler’s Crankcase Oil Problem; Social Preferences; Altruism; Assabiya (group solidarity); Fairness; Theory of Evil (spite/malevolence)
    JEL: D69 D01
    Date: 2007–06–11
  5. By: Konstantinos Angelopoulos; Jim Malley; Apostolis Philippopoulos
    Abstract: In this paper we study the quantitative macroeconomic effects of public education spending in USA for the post-war period. Using comparable measures of human and physical capital, from Jorgenson and Fraumeni (1989, 1992a,b), we calibrate a standard dynamic general equilibrium model where human capital is the engine of long-run endogenous growth and government education spending is justified by externalities in human capital. Our base calibration, based on moderate sized human capital externalities, suggests that public spending on education is both growth and welfare promoting. However, given that pubic education spending crowds-out private consumption, the welfare maximising size of the government is less than the growth maximising one. Our results further suggest that welfare gains, as high as four percent of consumption, are obtainable if the composition of public spending can be altered in favour of education spending relative to the other components of total government spending.
    Date: 2007–06
  6. By: Mishra, SK
    Abstract: Human Development Index (HDI) is a composite index obtained by a weighted aggregation of other three indices, each measuring one aspect, namely life expectancy, education and real per capita income. Intra-country equality in income distribution, however, is very important with regard to quality of life and, thus, human development. This paper is concerned with the question that if the measure of income equality also were included in construction of the HDI, then what would be the relative weights of different indices. One method could be to assign equal weights to all the four, but it is too pragmatic. Alternatively, the principal component analysis (PCA) may be applied to derive weights. But, again, the PCA is an overly elitist method that undermines the poorly correlated set of variables, which might be very important in their own right, in favor of highly correlated set of variables. We propose an alternative method that maximizes the sum of absolute coefficients of correlation of the composite index with the constituent indices. Such an index is inclusive in nature and gives proper representation to weakly correlated variables also. The method has been applied to data of 125 countries and the HDI so constructed has been compared with the PCA HDI and HDR (UNDP) HDI. We find substantial ups and downs in the HDI ranks of different countries.
    Keywords: Human development index; International comparison; HDI; income distribution; equality; relative weights; representation; inclusive; elitist; principal component; alternative method; UNDP; correlation; absolute
    JEL: D63 C43 O57
    Date: 2007–06–11
  7. By: Dollar, David
    Abstract: China has been the most rapidly growing economy in the world over the past 25 years. This growth has fueled a remarkable increase in per capita income and a decline in the poverty rate from 64 percent at the beginning of reform to 10 percent in 2004. At the same time, however, different kinds of disparities have increased. Income inequality has risen, propelled by the rural-urban income gap and by the growing disparity between highly educated urban professionals and the urban working class. There have also been increases in inequality of health and education outcomes. Some rise in inequality was inevitable as China introduced a market system, but inequality may have been exacerbated rather than mitigated by a number of policy features. Restrictions on rural-urban migration have limited opportunities for the relatively poor rural population. The inability to sell or mortgage rural land has further reduced opportunities. China has a uniquely decentralized fiscal system that has relied on local government to fund basic health and education. The result has been that poor villages could not afford to provide good services, and poor households could not afford the high private costs of basic public services. Ironically, the large trade surplus that China has built up in recent years is a further problem, in that it stimulates an urban industrial sector that no longer creates many jobs while restricting the government ' s ability to increase spending to improve services and address disparities. The government ' s recent policy shift to encourage migration, fund education and health for poor areas and poor households, and r ebalance the economy away from investment and exports toward domestic consumption and public services should help reduce social disparities.
    Keywords: Population Policies,Rural Poverty Reduction,Pro-Poor Growth and Inequality,Inequality,Health Monitoring & Evaluation
    Date: 2007–06–01

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