New Economics Papers
on Economics of Happiness
Issue of 2007‒11‒24
five papers chosen by

  1. Death, Happiness, and the Calculation of Compensatory Damages By Andrew J. Oswald; Nattavudh Powdthavee
  2. Born To Be Mild? Cohort Effects Don’t (Fully) Explain Why Well-Being Is U-Shaped in Age By Andrew E. Clark
  3. Does Marriage Matter for Children? Assessing the Causal Impact of Legal Marriage By Anders Björklund; Donna K. Ginther; Marianne Sundström
  4. Why Should Happiness Have a Role in Welfare Economics? Happiness versus Orthodoxy and Capabilities By Gabriel Leite Mota
  5. Bowling Alone, Drinking Together By Paolo Buonanno; Paolo Vanin

  1. By: Andrew J. Oswald (University of Warwick and IZA); Nattavudh Powdthavee (IoE, University of London)
    Abstract: This paper studies the mental distress caused by bereavement. The largest emotional losses are from the death of a spouse; the second-worst in severity are the losses from the death of a child; the third-worst is the death of a parent. The paper explores how happiness regression equations might be used in tort cases to calculate compensatory damages for emotional harm and pain-and-suffering. We examine alternative well-being variables, discuss adaptation, consider the possibility that bereavement affects someone’s marginal utility of income, and suggest a procedure for correcting for the endogeneity of income. Although the paper’s contribution is methodological, and further research is needed, some illustrative compensation amounts are discussed.
    Keywords: bereavement, damages, happiness, compensation, well-being, GHQ scores
    JEL: D1 I3 I31 K0
    Date: 2007–11
  2. By: Andrew E. Clark (Paris School of Economics and IZA)
    Abstract: The statistical analysis of cross-section data very often reveals a U-shaped relationship between subjective well-being and age. This paper uses fourteen waves of British panel data to distinguish between two potential explanations of this shape: a pure life-cycle or aging effect, and a fixed cohort effect depending on year of birth. Panel analysis controlling for fixed effects continues to produce a U-shaped relationship between well-being and age, although this U-shape is flatter for life satisfaction than for the GHQ measure of mental well-being. The pattern of the estimated cohort effects also differs between the two well-being measures and, to an extent, by demographic group. In particular, those born earlier report more positive GHQ scores, controlling for their current age; this phenomenon is especially prevalent for women.
    Keywords: subjective well-being, cohorts, fixed effects, panel data
    JEL: C23 I3 J11
    Date: 2007–11
  3. By: Anders Björklund (SOFI, Stockholm University and IZA); Donna K. Ginther (University of Kansas); Marianne Sundström (SOFI, Stockholm University)
    Abstract: This paper examines whether parental marriage confers educational advantages to children relative to cohabitation. We exploit a dramatic marriage boom in Sweden in late 1989 created by a reform of the Widow’s Pension System that raised the attractiveness of marriage compared to cohabitation to identify the effect of marriage. Sweden’s rich administrative data sources enable us to identify the children who were affected by parental marriage due to this marriage boom. Our analysis addresses the policy relevant question whether marginal marriages created by a policy initiative have an impact on children. Using grade point average at age 16 as the outcome variable, we first confirm the expected pattern that children with married parents do better than children with cohabiting parents. However, once we control for observable family background, or use instrumental-variables estimation to compare the outcomes for those children whose parents married due to the reform with those children whose parents remained unmarried, the differences disappeared. A supplementary sibling difference analysis also supports the conclusion that the differentials among children of married and cohabiting parents reflect selection rather than causation.
    Keywords: family structure, marriage, child well-being, educational attainment
    JEL: J10 J12 J13 J18
    Date: 2007–11
  4. By: Gabriel Leite Mota (Porto University, Faculty of Economics)
    Abstract: In this paper we try to understand how the Happiness Literature (HL) approach to Welfare Economics (WE) enriches it by enlarging its scope and power of analysis. To do so, we contrast the HL approach not only with Mainstream Welfare Economics (MWE) but also with the already established Sen’s Capabilities (SC) approach. We demonstrate (particularly for the cases of Income and Freedom) that these different theoretical approaches can imply different policy conclusions even when facing the same problems (mostly when switching from MWE to SC or HL) and that these different approaches have different domains of application (SC and HL with a wider domain than MWE). We also claim that the choice between MWE, SC and HL, even when the policy conclusions are similar, is connected with different axiomatic and philosophic foundations. We then conclude that HL stands out as an autonomous approach to WE with particular assumptions, techniques and policy conclusions.
    Keywords: Happiness, Capabilities, Welfare Economics, Welfrae Policies
    JEL: D63 D60 I31 I38
  5. By: Paolo Buonanno (Università di Bergamo); Paolo Vanin (Università di Padova)
    Abstract: Alcohol consumption may be associated to a rich social life, but its abuse might be related to a poor social life. This paper investigates whether alcohol consumption is a socially enjoyed good (a complement of social relations) or a substitute for social relations. In particular, it explores whether the answer changes between use and abuse, beer, wine and spirits, youth and adults, controlling or not for family influence and unobserved heterogeneity, and for various forms of social relations. Controlling for a great number of covariates and allowing for non linear and identity-specific family interaction effects, we find that alcohol consumption is a socially enjoyed good.
    Keywords: Social relations, Social interaction, Family, Alcohol consumption, Binge drinking
    JEL: C21 D12 I12 Z13
    Date: 2007–11

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