New Economics Papers
on Economics of Happiness
Issue of 2007‒08‒08
sixteen papers chosen by

  1. Limited Self-Control, Obesity and the Loss of Happiness By Alois Stutzer
  2. The Reliability of Subjective Well-Being Measures By Alan B. Krueger; David A. Schkade
  3. Welfare State and Life Satisfaction: Evidence from Public Health Care By Jani-Petri Laamanen; Kaisa Kotakorpi
  4. Happiness Functions with Preference Interdependence and Heterogeneity: The Case of Altruism within the Family By Adrian Bruhin; Rainer Winkelmann
  5. The glue of the economic system: the effect of relational goods on trust and trustworthiness. By Leonardo Becchetti; Giacomo Degli Antoni; Marco Faillo; Luigi Mittone
  6. Inter-country Comparisons of Poverty Based on a Capability Approach: An Empirical Exercise By Sanjay G. Reddy; Sujata Visaria; Muhammad Asali
  7. Women's earning power and wellbeing By Nanak Kakwani; Hyun H. Son
  8. Health and wellbeing in Udaipur and South Africa By Anne Case; Angus Deaton
  9. Are Social Welfare Policies ‘Pro-Life’? An Individual-Level Analysis of Low-Income Women By Laura S. Hussey
  10. The Effects of Welfare and Child Support Policies on the Timing and Incidence of Marriage Following a Nonmarital Birth By Jean Knab; Irv Garfinkel; Sara McLanahan; Emily Moiduddin; Cynthia Osborne
  11. Do Good Partners Make Good Parents?: Relationship Quality and Parenting in Two-Parent Families By Marcia J. Carlson; Sara S. McLanahan; Jeanne Brooks-Gunn
  12. FAMILY STRUCTURE AND MATERNAL HEALTH TRAJECTORIES By Sarah O. Meadows; Sara S. McLanahan; Jeanne Brooks-Gunn
  13. The Effects of Welfare and Child Support Policies on Maternal Health and Wellbeing By Jean Knab; Sara McLanahan; Irv Garfinkel
  14. Effects of Welfare Participation on Marriage By Julien O. Teitler; Nancy E. Reichman; Lenna Nepomnyaschy; Irwin Garfinkel
  15. Partnership Instability and Child Well-being By Cynthia Osborne; Sara McLanahan
  16. How comparable are different measures of self-rated health? Evidence from five European countries By Hendrik Jürges; Mauricio Avendano; Johan Mackenbach

  1. By: Alois Stutzer (University of Basel and IZA)
    Abstract: Obesity has become a major health issue. Research in economics has provided important insights as to how technological progress reduced the relative price of food and contributed to the increase in obesity. However, the increased availability of food might well have overstrained will power and led to suboptimal consumption decisions relative to people’s own standards. We propose the economics of happiness as an approach to study the phenomenon. Based on proxy measures for experienced utility, it is possible to directly address whether certain observed behavior is suboptimal and therefore reduces a person’s well-being. It is found that obesity decreases the well-being of individuals who report limited self-control, but not otherwise.
    Keywords: obesity, revealed preference, self-control problem, subjective well-being
    JEL: D12 D91 I12 I31
    Date: 2007–07
  2. By: Alan B. Krueger (Princeton University); David A. Schkade (University of California, San Diego)
    Abstract: Economists are increasingly analyzing data on subjective well-being. Since 2000, 157 papers and numerous books have been published in the economics literature using data on life satisfaction or subjective well-being, according to a search of Econ Lit.1 Here we analyze the test-retest reliability of two measures of subjective well-being: a standard life satisfaction question and affective experience measures derived from the Day Reconstruction Method (DRM). Although economists have longstanding reservations about the feasibility of interpersonal comparisons of utility that we can only partially address here, another question concerns the reliability of such measurements for the same set of individuals over time. Overall life satisfaction should not change very much from week to week. Likewise, individuals who have similar routines from week to week should experience similar feelings over time. How persistent are individuals’ responses to subjective well-being questions? To anticipate our main findings, both measures of subjective well-being (life satisfaction and affective experience) display a serial correlation of about 0.60 when assessed two weeks apart, which is lower than the reliability ratios typically found for education, income and many other common micro economic variables (Bound, Brown, and Mathiowetz, 2001 and Angrist and Krueger, 1999), but high enough to support much of the research that has been undertaken on subjective well-being.
    Date: 2007–01
  3. By: Jani-Petri Laamanen (FDPE, and University of Tampere); Kaisa Kotakorpi (FDPE, and University of Tampere)
    Abstract: We examine the effect of publicly provided health care on welfare by combining local level data on public health care, and individual level data on life satisfaction. It is shown that relatively high expenditures in health care have a positive effect on individuals' life satisfaction in our data. We further illustrate how life satisfaction data can be used to directly test theoretical hypotheses about how the welfare effect of public provision should vary among different groups in the population. We …nd some evidence for an "ends-against-the-middle" equilibrium (Epple and Romano, 1996) in the provision of public health care, where middle-income individuals prefer higher public expenditure at the margin than low-income or high-income individuals. Further, our results indicate that valuation for health care depends on individual political orientation.
    Keywords: Life satisfaction; public provision; health care
    JEL: H44 I18
    Date: 2007–07–16
  4. By: Adrian Bruhin (Socioeconomic Institute, University of Zurich); Rainer Winkelmann (Socioeconomic Institute, University of Zurich)
    Abstract: This study investigates the extent and spread of direct preference interdependence by examining the relationship between subjective well-being of parents and their adult children in a data set extracted from the German Socio-Economic Panel. In order to identify the share of parents with altruistic preferences we estimate a finite mixture regression model. We control for various sources of potential bias by taking advantage of the panel structure of the data set. We validate our modeling approach by showing that predicted altruists are more likely to make transfer payments.
    Keywords: subjective well-being, ordered probit, finite mixture regression models
    JEL: C23 D64 I31
    Date: 2007–02
  5. By: Leonardo Becchetti; Giacomo Degli Antoni; Marco Faillo; Luigi Mittone
    Abstract: The role of “relational goods” is almost unexplored in the literature, yet our experimental results document that, even in their weakest form (opportunity of meeting an unknown player at the end of an experimental game), they significantly affect important “lubricants” of economic activity such as trust and trustworthiness and generate significant departures from the standard Nash equilibrium outcome in trust (investment) games. Our findings suggest that relational goods are an important “source of energy” in economic interactions and that the study of this “neglected particle” of socioeconomic life may produce significant advancements on both positive and normative economics.
    Keywords: relational goods, trust, experimental games
    JEL: C72 C91 A13
    Date: 2007
  6. By: Sanjay G. Reddy (Dept. of Economics, Barnard College, Columbia University); Sujata Visaria (Dept. of Economics, Boston University); Muhammad Asali (Dept. of Economics, Columbia University)
    Abstract: We argue that inter-country comparisons of income poverty based on poverty lines uniformly reflecting the costs of the basic requirements of human beings are superior to the existing money-metric approaches. In this exercise, we implement a uniform approach to poverty assessment based on basic human capabilities for three countries: Nicaragua, Tanzania, and Vietnam. We compute standard errors of the resulting poverty estimates and compare the incidence of poverty across these three countries. The choice of approach affects both cardinal estimates and ordinal rankings of poverty across countries and over time. Meaningful and coherent inter-country poverty comparisons can be advanced through international co-ordination in survey design and in the construction of income poverty lines that uniformly reflect the costs of the basic requirements of human beings.
    Keywords: Poverty, Inter-Country comparisons, Capability approach
    JEL: I32 D31
    Date: 2006–08
  7. By: Nanak Kakwani (International Poverty Centre); Hyun H. Son (International Poverty Centre)
    Abstract: .
    Keywords: Poverty, Women?s
    Date: 2006–04
  8. By: Anne Case (Princeton University); Angus Deaton (Princeton University)
    Abstract: This paper presents a descriptive account of health and economic status in India and South Africa – countries in very different positions in the international hierarchy of life expectancy and income. The paper emphasizes the lack of any simple and reliable relationship between health and wealth between and within our sites in rural Rajasthan, in a shack township outside of Cape Town, and in a rural South African site that, until 1994, was part of a Bantustan. Income levels across our sites are roughly in the ratio of 4:2:1, with urban South Africa richest and rural Rajasthan poorest, while ownership of durable goods, often used as a short-cut measure or check of living standards, are in the ratio of 3:2:1. These differences in economic status are reflected in respondents’ own reports of financial status. People know that they are poor, but appear to adapt their expectations to local conditions, at least to some extent. The South Africans are taller and heavier than the Indians—although their children are no taller at the same age. South African self-assessed physical and mental health is no better, and South Africans are more likely to report that they have to miss meals for lack of money. In spite of differences in incomes across the three sites, South Africans and Indians report a very similar list of symptoms of ill-health. Although they have much lower incomes, urban women in South Africa have fully caught up with black American women in the prevalence of obesity, and are catching up in terms of hypertension. These women have the misfortune to be experiencing many of the diseases of affluence without experiencing affluence itself.
    Date: 2006–01
  9. By: Laura S. Hussey (University of Baltimore)
    Abstract: This paper tests the hypothesis that low-income women’s likelihood of choosing abortion will decrease as their access to and participation in social welfare programs increases. Though an affirmative finding could challenge the coherence of a morally and fiscally conservative Republican coalition and thus improve prospects for the safety net’s political future, findings from a sample of low-SES, urban mothers do not support this hypothesis. Welfare program participation and state welfare generosity are positively associated with the likelihood of choosing abortion. The existence and magnitude of this relationship, however, is mediated by the rules of state welfare bureaucracies and also varies by women’s race and marital status. Limitations on abortion access appear to reduce abortions, while the nongovernmental safety net does not affect abortion decisions.
    Date: 2006–01
  10. By: Jean Knab (Princeton University); Irv Garfinkel (Columbia University); Sara McLanahan (Princeton University); Emily Moiduddin (Princeton University); Cynthia Osborne (University of Texas, Austin)
    Abstract: Researchers and policy makers have long been concerned that government policies may influence individual behavior in unintended ways. In particular, they worry that by providing mothers with an income that is independent of marriage, welfare and child support policies may discourage marriage and increase union dissolution. Economic theory is clear with respect to the marriage disincentives of welfare for single mothers (Becker 1981), but it is ambiguous with respect to child support. Whereas stronger enforcement reduces the costs of single motherhood for women, making marriage less attractive, it increases the costs for fathers, making marriage more attractive. Which effect dominates is an empirical question. Although empirical studies vary with respect to effect size and methods, the evidence compiled during the 1980s and early 1990s indicates that welfare generosity during this period had a small negative effect on marriage among mothers (Moffitt 1998) whereas strong child support enforcement reduced single motherhood by reducing nonmarital childbearing.
    Date: 2007–03
  11. By: Marcia J. Carlson (Columbia University); Sara S. McLanahan (Princeton University); Jeanne Brooks-Gunn (Columbia University)
    Abstract: We use data from the Fragile Families and Child Wellbeing Study with a cross-lagged longitudinal design to examine how couple relationship quality and parental engagement with children affect one another during the first three years of a child’s life for both married and unmarried parents who are living together. The sample includes 1,647 co-resident couples in urban areas (772 married and 875 unmarried at baseline). Mothers and fathers report about their couple relationship quality and parental engagement at both one and three years after their baby’s birth. Overall, we find that relationship quality leads to greater parental engagement for both mothers and fathers, consistent with previous research showing positive ‘spillover’ from marital quality to parenting. We find that married and cohabiting couples are generally similar in this respect, even though they differ in socio-demographic characteristics. We find that when couples are having their first birth, relationship quality is more strongly tied to engagement by fathers (but not mothers).
    Keywords: Couple relationship quality, marital quality, parenting
    Date: 2006–11
  12. By: Sarah O. Meadows (Princeton University); Sara S. McLanahan (Princeton University); Jeanne Brooks-Gunn (Columbia University)
    Abstract: Existing research shows that marriage and marital stability are positively associated with health and well-being. Thus, recent increases in births to unmarried parents and the instability surrounding these relationships raise concerns about the possible health effects associated with changes in family formation. Using latent trajectory models and data from the Fragile Families and Child Well-Being Study (FFCWS) this paper examines trajectories of mothers’ mental and physical health, specifically focusing on transitions into and out of relationships with the child’s biological father (n = 2,649). Mothers who remain married to their child’s father are in better mental and physical health than continuously cohabiting or continuously single mothers. Among mothers living with the father at birth, exiting a coresidential relationship increases mental health problems and decreases self-rated health. These effects appear to be short-lived, as suggested by stress theory, followed by periods of resilience in the absence of other transitions. Among mothers who are not living with the father, entering a residential relationship improves both mental and physical health, but only prior to the child’s first birthday. The implications of these findings for selection and causation arguments, as well as social policies promoting stable healthy unions between non-married parents, are also discussed.
    Keywords: marriage, mental health, physical health, trajectories, mothers
    Date: 2006–11
  13. By: Jean Knab (Princeton University); Sara McLanahan (Princeton University); Irv Garfinkel (Columbia University)
    Abstract: In 1996 the U.S. Congress passed the Personal Responsibility and Work Opportunities Reconciliation Act (PRWORA), substantially reducing a family’s rights to income support. PRWORA removed the entitlement to government-provided cash assistance and increased states’ incentives to reduce welfare caseloads. At the same time it increased private responsibilities by encouraging greater work effort from mothers and more child support payments from non-resident fathers. The PRWORA provisions raised concerns within the medical community and among other advocates interested in the health and wellbeing of at-risk families. The changes to cash welfare and child support policies had potential direct and indirect consequences for women’s health. Most directly, by removing the entitlement to welfare, many feared that poor women would lose their health insurance coverage. While PRWORA included a provision to hold Medicaid eligibility constant, the administrative barriers to implementation by program staff and the confusing new rules suggested that many eligible women might lose coverage.
    Date: 2007–03
  14. By: Julien O. Teitler (Columbia University); Nancy E. Reichman (Robert Wood Johnson Medical School); Lenna Nepomnyaschy (Columbia University); Irwin Garfinkel (Columbia University)
    Abstract: Despite interest in the potential of the welfare system as a tool to affect marriage behaviors among low-income women, little is known about how welfare participation affects decisions to marry. We employ an event history approach to examine transitions to marriage over a five-year period among mothers who have had a non-marital birth. We find that welfare participation under the Temporary Assistance to Needy Families program (TANF) reduces the likelihood of transitioning to marriage (hazard ratio is .67, p < .01), but only while the mother is receiving welfare. Once the mother leaves TANF, past receipt has little effect on marriage. We project that over an 18-year period, TANF participation results in at most a 4 to 5 percentage point reduction in marriage and a 16-month delay in marriage. We infer that the negative association between TANF participation and marriage reflects temporary economic disincentives or other short-term mechanisms rather than lasting effects on values and preferences.
    Date: 2006–04
  15. By: Cynthia Osborne (University of Texas, Austin); Sara McLanahan (Princeton University)
    Abstract: We use data from three waves of the Fragile Families Study (N = 2,111) to examine the prevalence and effects of mothers’ partnership changes between birth and age 3 on children’s behavior. We find that children born to unmarried and minority parents experience significantly more partnership changes than children born to parents who are married or White. Each transition is associated with a modest increase in behavioral problems, but a significant number of children experience three or more transitions. The effects of instability do not depend on the mothers’ relationship status or race/ethnicity with one exception: instability has a stronger effect on aggression among Hispanic children. The association between instability and behavior is mediated by maternal stress and lower quality mothering.
    Date: 2007–03
  16. By: Hendrik Jürges; Mauricio Avendano; Johan Mackenbach (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: Self-rated health (SRH) is a common health measurement in international research. Yet different versions of this item are often applied. This study compares the US (United States) version (from excellent to poor) and the EU (European) version (from very good to very bad) of SRH, and examines differences in their associations with demographic and objective health variables. Data were drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE), comprising information from 11,622 respondents aged 50 years and over in five countries. Respondents were presented with both the EU and US versions. Information was collected on basic demographics and health variables including chronic diseases, symptoms, functional limitations and depression. Firstly, the distribution of each version of the SRH item was assessed, and both relative and literal concordance was examined. Subsequently, multivariate regression analysis was used to assess differences in the associations of both items with demographic and health indicators. The US version has a more symmetric distribution and smaller variance than the EU version. Although the EU version discriminates better at the negative end, the US version shows better discrimination at the negative end of the scale. 69% of respondents provided literally concordant answers, while only about one third provided relatively concordant answers. Overall, however, less than 10% of respondents were discordant in either sense. Furthermore, the two versions were strongly correlated (polychoric correlation = 0.88), had similar associations with demographics and health indicators, and showed a similar pattern of variation across countries. Health levels based on different versions of the self-rated health item are not directly comparable and require rescaling of items. However, both versions represent parallel assessments of the same latent health variable. We did not find evidence that the EU version is preferable to the US version as standard measure of SRH in European countries.
    Date: 2007–07–16

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