nep-hap New Economics Papers
on Economics of Happiness
Issue of 2008‒07‒30
twelve papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. The Geography of Economics and Happiness By Luca Stanca
  2. Flexicurity and Workers Well-Being in Europe: Is Temporary Employment Always Bad? By Federica Origo; Laura Pagani
  3. Happiness Dynamics with Quarterly Life Event Data By Frijters, Paul; Johnston, David W.; Shields, Michael A.
  4. A two-step procedure to analyse users' satisfaction By Pieralda Ferrari; Laura Pagani; Carlo Fiorio
  5. Contractual Conditions, Working conditions, Health and Well-Being in the British Household Panel Survey By Robone, S; Jones, A. M; Rice, N
  6. Are Americans Really Less Happy With Their Incomes? By Arie Kapteyn; James P. Smith; Arthur van Soest
  7. Modelling and Measuring Inequality of Opportunity in Health: Evidence from a Cohort Study By Rosa Dias, P
  8. Political institutions and suicide: A regional analysis of Switzerland By Justina AV Fischer; Antonio Rodriguez-Andrés
  9. A multi-criteria fuzzy approach for analyzing poverty structure By Paola Annoni; Marco Fattore; Rainer Brüggemann
  10. Satisfaction with Democracy and Collective Action Problems: The Case of the Environment By Martin Halla; Friedrich Schneider; Alexander Wagner
  11. A global measurement approach versus a country-specific measurement approach – Do they draw the same picture of child poverty? The case of Vietnam By Roelen, Keetie; Gassmann, Franziska; Neubourg, Chris de
  12. On the measurement of growth By Babutsidze, Zakaria

  1. By: Luca Stanca
    Abstract: This paper investigates the spatial pattern of the e®ects of eco- nomic conditions on subjective well-being, using a large sample of in- dividuals from 81 countries throughout the world. We ¯nd evidence of substantial spatial heterogeneity and spatial dependence in the cross- country distribution of the e®ects of income and unemployment on happiness. We examine the impact of macroeconomic conditions on country-level sensitivities of subjective well-being to microeconomic conditions. The e®ect of income on well-being is found to be signif- icantly stronger in countries with lower GDP per capita and higher unemployment rate. The e®ect of unemployment on well-being is in- stead signi¯cantly stronger in countries with higher GDP per capita and higher unemployment rate.
    Keywords: subjective well-being, economic geography, spatial econometrics
    JEL: A12 D12 I31
    Date: 2008–06
  2. By: Federica Origo; Laura Pagani
    Abstract: In this paper we study the effect of a micro-level measure of flexicurity on workers job satisfaction. To this aim, using micro data from the Eurobarometer survey, we split workers in different groups according not only to their employment contract (i.e. permanent or temporary), but also to their perceived job security, and we evaluate differences in job satisfaction between these groups. After controlling for the potential endogeneity of job type, results show that what matters for job satisfaction is not just the type of contract, but mainly the perceived job security, which may be independent of the type of contract. The combination “temporary but secure job” seems preferable with respect to the combination “permanent but insecure job”, pointing out that the length of the contract may be less relevant if the worker perceives that he/she is not at risk of becoming unemployed. Our main conclusions are robust to the use of alternative definitions of workers’ types and they generally hold within different welfare regimes and also for different aspects of job satisfaction, mainly for those more related to job security.
    Keywords: Flexicurity, Job Satisfaction, POLS
    JEL: J28 J81
    Date: 2008–06
  3. By: Frijters, Paul (Queensland University of Technology); Johnston, David W. (University of Melbourne); Shields, Michael A. (University of Melbourne)
    Abstract: This paper addresses the question of when and to what extent individuals are affected by major positive and negative life events, including changes in financial situation, marital status, death of child or spouse and being a victim of crime. The key advantage of our data is that we are able to identify these events on a quarterly basis rather than on the yearly basis used by previous studies. We find evidence that life events are not randomly distributed, that individuals to a large extent anticipate major events and that they quickly adapt. These effects have important implications for the calculation of monetary values needed to compensate individuals for life events such as crime or death of spouse. We find that our new valuation methodology that incorporates these dynamic factors produces considerably smaller compensation valuations than those calculated using the standard approach.
    Keywords: life satisfaction, life events, adaptation, compensation
    JEL: I0
    Date: 2008–07
  4. By: Pieralda Ferrari (University Milan); Laura Pagani (University of Udine); Carlo Fiorio (University of Milan)
    Abstract: In this paper an integrated use of Nonlinear Principal Component Analysis (NLPCA) and Multilevel Models (MLM) for the analysis of satisfaction data is proposed. The basic hypothesis is that observed ordinal variables describe different aspects of a latent continuous variable that depends on individual and contextual covariates. NLPCA is used to measure the level of a latent variable and MLM are adopted for detecting individual and environmental determinants of the level. By using the Eurobarometer survey data, this approach is applied to analyse the European users' satisfaction with services of general interest after the recent privatisation and liberalisation policies.
    Keywords: Nonlinear Principal Component Analysis, Multilevel Models, satisfaction, privatisation and liberalisation policies,
    Date: 2008–03–17
  5. By: Robone, S; Jones, A. M; Rice, N
    Abstract: We consider the effects of contractual and working conditions on self-assessed health and psychological well-being using twelve waves (1991/92 – 2002/2003) of the British Household Panel Survey. While one branch of the literature suggests that “atypical” contractual conditions have a significant impact on health and well-being, another suggests that health is damaged by adverse working conditions. As far as we are aware, previous studies have not explicitly considered the two factors jointly. Our aim is to combine the two branches of the literature to assess the distinct effects of contractual and working conditions on health and psychological well-being and how these effects vary across individuals. For self-assessed health the dependent variable is categorical, and we estimate non-linear dynamic panel ordered probit models, while for psychological well-being we estimate a dynamic linear specification. Our estimates show that being unsatisfied with the number of hours worked has a negative influence on the health of individuals who have a part-time job. Having a high level of employability appears to influence positively the health and psychological well-being of individuals with temporary job arrangements. Family structure appears to influence the health and well-being of workers with atypical contractual conditions.
    Keywords: working conditions, contractual conditions, self assessed health, psychological well-being, dynamic panel data models
    JEL: C23 I10 J41 J81
    Date: 2008–07
  6. By: Arie Kapteyn; James P. Smith; Arthur van Soest
    Abstract: Recent economic research on international comparisons of subjective well-being suffers from several important biases due to the potential incomparability of response scales within and across countries. In this paper the authors concentrate on self-reported satisfaction with income in two countries--The Netherlands and the U.S. The comparability problem is addressed by using anchoring vignettes. They find that in the raw data, Americans appear decidedly less satisfied with their income than the Dutch. It turns out however that after response scale adjustment based on vignettes the distribution of satisfaction in the two countries is essentially identical. In addition, they find that the within-country cross-sectional effect of income on satisfaction- a key parameter in the recent debate in the economic literature- is significantly under-estimated especially in the US when differences in response scales are not taken into account.
    Keywords: happiness, life satisfaction, vignettes, reporting bias
    JEL: I30 J30
    Date: 2008–06
  7. By: Rosa Dias, P
    Abstract: This paper uses data from the National Child Development Study to propose an empirical implementation of the concept of inequality of opportunity in health. Drawing on the distinction between circumstance and effort variables in John Roemer's work on equality of opportunity, circumstances are proxied by parental socio-economic status and childhood health; effort is proxied by health-related lifestyles and educational attainment. The paper is divided in three parts. First, a set of stochastic dominance tests is used to detect inequality of opportunity in the conditional distributions of self-assessed health in adulthood. Second, relying on a comprehensive set of circumstances, two alternative approaches are used to measure inequality of opportunity in health. Finally, in order to illuminate the triangular relationship between circumstances, effort and health, a structural model which relates selfassessed health in adulthood to lifestyles and educational attainment is considered. A recursive system of equations for self-assessed health, lifestyles and educational attainment is estimated by full information maximum likelihood to unveil the causal relationships at stake. The results indicate the existence of considerable and persistent inequality of opportunity in health. They also suggest that circumstances affect health in adulthood both directly and through effort factors such as educational attainment. This indicates that, while the influence of some unjust circumstances can only be tackled during childhood, the implementation of complementary educational policies may be of paramount importance to reduce health inequalities.
    Date: 2008–05
  8. By: Justina AV Fischer; Antonio Rodriguez-Andrés
    Abstract: The question to what extent governance structure affects people’s well-being, here reflected in the decision to commit suicide, remains still largely unknown. This paper examines the effects of political institutions and governance structure on suicide using a balanced panel for 26 Swiss states (cantons) over the period 1980–1998. Our results indicate that stronger popular rights and more fiscal decentralization reduce suicide, while more local autonomy increases it. The effects are not strongly gender-specific. However, we find evidence that the effect of direct legislation is partly transmitted through sub-federal budgets, but not through health sector spending exclusively.
    Keywords: Suicide, Direct democracy, Decentralization, Happiness, Well-being
    Date: 2008
  9. By: Paola Annoni (University of Milan, Dept. of Economics, Business and Statistics); Marco Fattore (University of Milano-Bicocca, Dept. of Statistics); Rainer Brüggemann (Institute of Fresh Water Ecology and Inland Fisheries, Berlin, Germany)
    Abstract: Poverty is a multidimensional, fuzzy and complex phenomenon that cannot be faithfully represented by mono-dimensional monetary indicators. In the last years, much research has been devoted to tackle poverty fuzziness, while less attention has been paid to poverty complexity. In this paper, we employ Fuzzy Multi-Criteria Analysis to provide a structural representation of poverty, in terms of the pattern of implications existing among different poverty descriptors related to specific scenarios. We show how fuzzy relation theory and partially ordered set techniques are effective in representing complex relational structures and provide new insights into multidimensional poverty. An application of Fuzzy Multi-Criteria Analysis to poverty data concerning two Italian regions is also provided, based on EU-SILC data for year 2004.
    Keywords: Multi-criteria analysis, poverty index, multi-dimensional relational pattern, posets, Hasse diagram, fuzzy quasi-order relations, defuzzification,
    Date: 2008–05–26
  10. By: Martin Halla (Department of Economics, Johannes Kepler University Linz, Austria); Friedrich Schneider (Department of Economics, Johannes Kepler University Linz, Austria); Alexander Wagner (Institute for Swiss Banking University of Zurich Plattenstrasse 14 CH-8032 Zurich Switzerland)
    Abstract: Using modern methods for analyzing multi-level data, we find that, by and large, citizens of OECD countries are more satisfied with the way democracy works in their country if more environmental policies are in place and if environmental quality is higher. We also document that parents care about carbon dioxide emissions more than non-parents and that those with a high willingness to pay for environmental quality deplore intervention through government policies.
    Keywords: Collective action problems, environmental economics and policy, satisfaction with democracy
    JEL: K32 P16 Q21 Q28
    Date: 2008–07
  11. By: Roelen, Keetie; Gassmann, Franziska; Neubourg, Chris de
    Abstract: Child poverty can be measured using approaches that aim to make cross-country comparisons on a regional or global scale or to capture a country’s specific poverty context. The first can be referred to as a global approach and the second as a country-specific approach. These underlying rationales for the design and use of a child poverty approach have great implications for their theoretical and conceptual frameworks. This paper investigates whether the conceptual differences between the global and country-specific approaches also draw a different empirical picture of child poverty when applied to a specific country. Vietnam is used as a case study for the application of both approaches and analysis of results. The methodology used identifies children at two different levels of poverty, namely severe deprivation and absolute poverty. Findings suggest that the country-specific approach is more inclusive than the global approach, identifying a larger percentage of children as poor and capturing the large majority of those children identified under the global approach. Poverty figures of both approaches further convey a varying picture of child poverty when considering the different dimensions of vulnerability. The demographic composition of the poverty groups by either one or both of the approaches does not display significant differences.
    Keywords: child poverty; multidimensional poverty; Vietnam
    JEL: I32
    Date: 2008–05–06
  12. By: Babutsidze, Zakaria
    Abstract: The current short note suggests an alternative measure for economic growth, which is based on consumer welfare instead of per capita income. It suggests that this measure can be better applied to economies with certain characteristics.
    Keywords: economic growth
    JEL: E10 E20
    Date: 2008–07–18

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