nep-hap New Economics Papers
on Economics of Happiness
Issue of 2007‒11‒10
six papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Mirror, Mirror on the Wall, who is the Happiest of Them All? By Benno Torgler; Nemanja Antic; Uwe Dulleck
  2. Does Working Longer Make People Healthier and Happier? By Calvo, Esteban
  4. Well-Being and Ill-Being: A Bivariate Panel Data Analysis By Wang-Sheng Lee; Umut Oguzoglu
  5. The Dynamics of Growth, Poverty, and Inequality: A Panel Analysis of Regional Data from the Philippines and Thailand By Kyosuke Kurita; Takashi Kurosaki
  6. Hedonic Adaptation to Living Standards and the Hidden Cost of Parental Income By Stefan Boes; Kevin Staub; Rainer Winkelmann

  1. By: Benno Torgler; Nemanja Antic; Uwe Dulleck
    Abstract: This paper turns Snow-White’s magic mirror onto recent economics Nobel Prize winners, top economists and happiness researchers, and through the eyes of the “man in the street” seeks to determine who the happiest academic is. The study not only provides a clear answer to this question but also unveils who is the ladies’ man and who is the sweetheart of the aged. It also explores the extent to which information matters and whether individuals’ self-reported happiness affects their perceptions about the happiness of these superstars in economics.
    Keywords: happiness, subjective well-being, perceptions, superstars, economists
    JEL: A11 D10 I31
    Date: 2007–10–17
  2. By: Calvo, Esteban
    Abstract: PURPOSE: This study addresses the impact of late-life paid work on physical and psychological well-being. METHODS: Longitudinal data was drawn from the Health and Retirement Survey and the RAND-HRS data base for more than 6,000 individuals aged 59 to 69 who were working or not-working in the year 2000 and were alive in 2002. Well-being was assessed by using a set of six measures including: self-rated health; self-rated memory; activities of daily living; instrumental activities of daily living and mood indicators. The study controls for previous well-being status in 1998 and for demographic and socioeconomic factors. RESULTS: Those who worked in 2000 tended to report greater well-being in 2002 than those who did not work in 2000, even after introducing rigorous controls (p<.01). Working in undesirable jobs changes the favorable effects of paid work on mood indicators and mortality. For those forced into retirement (20% of the sample), work is not an alternative. IMPLICATIONS: This study suggests that late-life work will help most people maintain their overall well-being. While working longer seems beneficial for most people, it will likely have negative consequences for some. The type of job seems to be a critical factor. Another critical factor is the opportunity to continue working. Older workers may be willing to prolong paid work, but, in order to find a job, they need to be able to work and have a real demand for their labor. Gerontologists and policymakers need to consider these factors when evaluating proposals to keep people in the labor force.
    Keywords: work; retirement; health; happiness; mortality; well-being; old age; policy; job satisfaction; control
    JEL: J21 I10 I12 J26 I31 J28
    Date: 2006
  3. By: Katrin Rehdanz (Research unit Sustainability and Global Change, Hamburg University)
    Abstract: Economic valuation of biodiversity is generally carried out by applying revealed or stated preference approaches to determine people’s willingness to pay for small changes in management options. Studies on species preservation investigating passive or nonuse values typically rely on stated preference methods such as the contingent valuation approach and often focus on single animal species. The total value of species preservation can only be derived by aggregating the various values. This paper proposes a different approach by investigating country level data on life-satisfaction attempting to explain differences in subjective well-being by reference to amongst other things species diversity. While most recent papers have concentrated on finding determinants of life-satisfaction other than income, little attention has been drawn to spatial interdependencies. Most researchers investigating the determinants of life-satisfaction implicitly assume that subjective well-being is unaffected by events in neighbouring locations. The existence of spatial relationships in the data has implications for the econometric techniques typically employed including misleading inference testing procedures, bias and inconsistency depending on the precise form of the spatial relationship. We extend our analysis by a spatial econometric approach investigating whether and to what extend spatial relationships exist. Spatially weighted variables are shown to be a highly significant determinant of life-satisfaction. As nature does not respect man-made borders, neither does peoples happiness. Furthermore, even when controlling for a range of other factors we find a significant relationship with species diversity; the higher a countries number of bird or mammal species or the lower the percentage of bird species threatened the more satisfied the people are. Overall and from a human perspective, bird species seem to be a better indicator for biodiversity.
    Keywords: amenity value, biodiversity, life-satisfaction, spatial econometrics, species diversity, well-being
    JEL: R19 Q57
    Date: 2007–10
  4. By: Wang-Sheng Lee (MIAESR, University of Melbourne); Umut Oguzoglu (MIAESR, University of Melbourne and IZA)
    Abstract: The aim of this paper is to estimate in a multivariate context the factors associated with wellbeing and ill-being without making the assumptions that they are opposite ends of the same continuum, and that the factors uniformly affect both well-being and ill-being. Using the first five waves of panel data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we jointly model positive and negative well-being in a two-equation dynamic panel data model. We found that while past ill-being had significant effect on current wellbeing there was no support for a reverse relationship (i.e. lagged effect of well-being on current ill-being). In addition, we also found support for asymmetry in how certain factors affect well-being and ill-being. The implication of the findings in this paper for the happiness literature is that for future empirical work, it would perhaps more prudent to begin with the notion that well-being and ill-being are distinct dimensions, that the unobservables that affect well-being and ill-being are correlated, and to specify econometric models that allow for these concepts to be reflected.
    Keywords: well-being, happiness, ill-being, dynamic panel models, bivariate probit
    JEL: I31 C33
    Date: 2007–10
  5. By: Kyosuke Kurita; Takashi Kurosaki
    Abstract: We propose a new methodological framework to empirically analyze the dynamics of growth, poverty, and inequalitythat incorporates the fact that the entire distribution of a welfare indicator, say, real percapita consumption, changes over time, and that empirical variables for growth, poverty, and inequality are often compiled from the distribution of the welfare indicator. Empirical models derived from this framework are applied to a unique panel dataset of provinces in the Philippines (1985-2003) and Thailand (1988-2004), compiled from microdata on household expenditures. The system GMM estimation results suggest that inequality reduced the subsequent growth rate of percapita consumption in both countries and differences in inequality explain a substantial portion of the Philippine-Thai difference in growth and poverty reduction during the late 1980s and the 1990s.
    Keywords: poverty, inequality, pro-poor growth, convergence, Thailand, the Philippines
    JEL: I32 O15
    Date: 2007–10
  6. By: Stefan Boes (Socioeconomic Institute, University of Zurich); Kevin Staub (Socioeconomic Institute, University of Zurich); Rainer Winkelmann (Economics Division, Federal Research Institute WSL, Birmensdorf, Switzerland)
    Abstract: High parental income, while undeniably causing beneÞts for a child in terms of better access to education and more favorable labor market outcomes, may at the same time increase a childÕs income aspirations and thereby reduce Þnancial satisfaction, ceteris paribus. In this paper, we investigate the relationship between Þnancial satisfaction and parental income with data from the German Socio-Economic Panel. The results indicate that there is indeed a negative well-being externality of parental income, and that children appear to compare their actual income situation with the aspiration level acquired while growing up.
    Keywords: Welfare, happiness, income norm, subjective well-being
    JEL: D62 I31
    Date: 2007–10

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