New Economics Papers
on Economics of Happiness
Issue of 2008‒08‒14
ten papers chosen by

  1. National Wellbeing and International Sports Events By Georgios Kavetsos; Stefan Szymanski
  2. Integrating Mental Health in Welfare Evaluation: An Empirical Application By Das, Sanghamitra; Mukhopadhyay, Abhiroop; Ray, Tridip
  3. How big a problem is noise pollution? A brief happiness analysis by a perturbable economist By Weinhold, Diana
  4. Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency By Isabelle Joumard; Christophe André; Chantal Nicq; Olivier Chatal
  5. Negative Reality of the HIV Positives: Evaluating Welfare Loss in a Low Prevalence Country By Das, Sanghamitra; Mukhopadhyay, Abhiroop; Ray, Tridip
  6. Can Future Uncertainty Keep Children Out of School? By Gabriel Helene Bie Lilleør
  7. The Mortality and Morbidity Transitions in Sub-Saharan Africa: Evidence from Adult Heights By Yoko Akachi; David Canning
  8. Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS By Michael Hurd; Susann Rohwedder
  9. Improving Human Capital Formation in India By Sean Dougherty; Richard Herd

  1. By: Georgios Kavetsos (Cass Business School, City University, London); Stefan Szymanski (Tanaka Business School, Imperial College)
    Abstract: The widely proclaimed economic benefits of hosting major sporting events have received substantial criticism by academic economists and have been shown to be negligible, at best. The aim of this paper is to formally examine the existence of another potential impact: national wellbeing or the so-called “feelgood” factor. Using data on self-reported life satisfaction (happiness) for twelve European countries we test for the impact of hosting and of national athletic success on happiness. Our data covers three different major events: the Olympic Games, the FIFA World Cup and the UEFA European Championship. We find that the “feelgood” factor associated with hosting football events is large and significant, but that the impact of national athletic success on happiness, while correctly signed, is statistically insignificant.
    Keywords: Life satisfaction; Happiness; Feel-good factor; Sporting events; Economic impact
    JEL: D60 I31 L83
    Date: 2008–08
  2. By: Das, Sanghamitra; Mukhopadhyay, Abhiroop; Ray, Tridip
    Abstract: This paper presents simple measures of individual and family mental health indices based on axiomatic foundations and integrates mental health into a neoclassical model that allows for proper substitution possibilities in the family preferences and quantifies its significance in family utility. We find that mental health effects are far more important than the effect of consumption or children’s schooling in determining family utility. We illustrate the usefulness of our approach by considering the case of HIV/AIDS experience in India. Using our approach, we find that while there are no significant differences in per capita consumption and schooling between HIV and NON HIV families, the cost of HIV/AIDS are still considerably large due to the inclusion of mental health. Integrating mental health in a utility maximization framework helps us quantify these costs.
    JEL: C10 I31 I10
    Date: 2007–08–16
  3. By: Weinhold, Diana
    Abstract: We approach the question of the costs of everyday residential noise pollution by examining a series of ‘happiness regressions.’ Following standard approaches, we use a range of socio-economic data to explain respondents’ declared level of life satisfaction, and then add perceived noise pollution into the analysis. In the process we replicate the observed patterns from other studies of this type. We find noise to exert a negative and highly significant effect on happiness, approximately of the same order of magnitude as being disabled. Using some rough and ready calculations, we find the monetary equivalent costs of noise pollution to be on the order of €170 per month per household.
    Keywords: happiness; hedonic regression; noise pollution
    JEL: Q51 R21
    Date: 2008–08–06
  4. By: Isabelle Joumard; Christophe André; Chantal Nicq; Olivier Chatal
    Abstract: This paper aims to shed light on the contribution of health care and other determinants to the health status of the population and to provide evidence on whether or not health care resources are producing similar value for money across OECD countries. First, it discusses the pros and cons of various indicators of the health status, concluding that mortality and longevity indicators have some drawbacks but remain the best available proxies. Second, it suggests that changes in health care spending, lifestyle factors (smoking and alcohol consumption as well as diet), education, pollution and income have been important factors behind improvements in health status. Third, it derives estimates of countries’ relative performance in transforming health care resources into longevity from two different methods – panel data regressions and data envelopment analysis – which give remarkably consistent results. The empirical estimates suggest that potential efficiency gains might be large enough to raise life expectancy at birth by almost three years on average for OECD countries, while a 10% increase in total health spending would increase life expectancy by three to four months. <P>Déterminants de l’état de santé : style de vie, environnement socio-économique, ressources <BR>Ce document examine la contribution des soins médicaux ainsi que d’autres facteurs à l’état de santé de la population et tente de déterminer si les dépenses dans le domaine de la santé produisent les mêmes résultats selon les pays de l’OCDE. En premier lieu, il s’interroge sur les avantages et les inconvénients des différents indicateurs de l’état de santé et en conclut que, malgré leurs défauts, les indicateurs de mortalité et de longévité demeurent les meilleures approximations disponibles. Il suggère ensuite que les évolutions des dépenses de santé, des modes de vie (consommation de tabac et d’alcool, régime alimentaire), du niveau d’éducation, de la pollution et des revenus ont été des facteurs importants de l’amélioration de l’état de santé. Enfin, il estime la capacité relative des différents pays à transformer les ressources médicales en accroissement de la longévité, en s’appuyant sur deux méthodes différentes (régressions sur données de panel et analyse d’enveloppement de données) qui donnent des résultats remarquablement similaires. Les estimations empiriques suggèrent que l’espérance de vie pourrait s’accroitre de presque trois ans en moyenne dans les pays de l’OCDE si les ressources médicales disponibles étaient utilisées plus efficacement, tandis qu’une augmentation des dépenses totales de santé de 10% se traduirait par trois à quatre mois d’espérance de vie supplémentaire.
    Keywords: dépenses publiques, public expenditure, data envelopment analysis, analyse par enveloppement des données, healthcare, spending efficiency, panel data regressions, health status, état de santé, système médical, efficacité de la dépense, régressions sur données de panel
    JEL: C23 H51 I12 O57
    Date: 2008–08–04
  5. By: Das, Sanghamitra; Mukhopadhyay, Abhiroop; Ray, Tridip
    Abstract: Using primary household data from India we estimate family utility function parameters that measure the relative importance of consumption, schooling of children and health (both physical and mental) and find that mental health is far more important than consumption or children’s schooling in determining household utility. We then estimate that the monetary equivalent of the welfare loss to an HIV family is Rs. 66,039 per month, whereas the losses to an HIV male and female are Rs. 67,601 and Rs. 65,120 per month respectively. These figures are huge given that the average per capita consumption expenditure of the families in our sample is just Rs. 1,019 per month. This huge magnitude is not surprising as it includes private valuation of one’s own life as well as the cost of stigma for being HIV positive. In addition, the annual loss from external transfers (through debt, sale of assets and social insurance) accounts for 2.6% of annual health expenditure and 0.12% of GDP in 2004. The significance of mental health in welfare evaluation can be gauged from the fact that, for an average HIV family, a whopping 74% of the welfare loss comes from aspects of mental health.
    Keywords: HIV/AIDS; Mental Health; Physical Health; Welfare Loss; Family Preference.
    JEL: C10 O10 D10 I10
    Date: 2008–02–27
  6. By: Gabriel Helene Bie Lilleør (Department of Economics, University of Copenhagen)
    Abstract: There is little doubt in the literature, that poverty and liquidity constraints can drive children out of school and into child labour in developing countries. But are there other important explanations for low primary school enrolment rates? The child labour and schooling literature often ignores that uncertainty about future returns results in a need for risk diversification, that children function as old-age security providers when there are no available pension systems, that the human capital investment decision of one child is likely to be influenced by that of his/her siblings, and that rural parents face a choice of investing in either specific or general human capital of their children. In this paper, I investigate the effects of future income uncertainty on the joint human capital investment decision of children in a household. I develop and calibrate a simple illustrative human capital portfolio model and show that existing levels of uncertainty can indeed result in less than full school enrolment within a household, even in a world of perfect credit markets. The paper thus offers an alternative explanation for why it might be optimal for rural parents not to send all of their children to school.
    Keywords: schooling; child labour; specific human capital; traditional education; intergenerational transfers; old-age security; uncertainty; income source diversification; liquidity constraints
    JEL: J13 J24 O15
    Date: 2008–08
  7. By: Yoko Akachi (European University Institute); David Canning (Harvard School of Public Health)
    Abstract: In most developing countries, rising levels of nutrition and improvements in public health have led to declines in infant mortality and rising adult heights. In Sub-Saharan Africa we see a different pattern. Sub-Saharan Africa has seen large reductions in infant mortality over the last fifty years, but without any increase in protein and energy intake and against a background of stagnant, or declining, adult height. Adult height is a sensitive indicator of the nutrition and morbidity prevailing during the childhood of the cohort and can be taken as a measure of health human capital. Declining infant mortality rates in Sub-Saharan Africa appear to be driven by medical interventions that reduce infant mortality, rather than by broad based improvements in nutrition and public health measures, and may not be reflective of broad based health improvements.
    Keywords: mortality, Sub-Saharan, morbidity, heights
    Date: 2008–05
  8. By: Michael Hurd; Susann Rohwedder
    Abstract: According to economic theory, well-being or utility depends on consumption. However, at the household level, total consumption is rarely measured because its collection requires a great deal of survey time. As a result income has been widely used to assess economic well-being and poverty rates. Yet, because households can use wealth to consume more than income, an income-based measure of well-being could yield misleading results for many households, especially at older ages. The authors use data from the Health and Retirement Study to find income-based poverty rates which they compare with poverty rates as measured in the Current Population Survey. They use HRS consumption data to calculate a consumption-based poverty rate and study the relationship between income-based and consumption-based poverty measures. They find that the poverty rate based on consumption is lower than the income-based poverty rate. Particularly noteworthy is the much lower rate among the oldest single persons such as widows. The explanation for the difference is the ability to consume out of wealth.
    JEL: I32 J14
    Date: 2006–11
  9. By: Sean Dougherty; Richard Herd
    Abstract: The provision of high-quality education and health care to all of the population is considered a core element of public policy in most countries. In India, the government is active in both education and health but the private sector also plays an important role, notably for heath, and to a lesser extent in education. At present, the quality and quantity of the outputs from education, and also form public health care, are holding back the process of economic development. Steps are being taken to draw more children into primary education and the paper considers ways to keep children in school. It also considers institutional changes that may help to improve the performance of the educational system and so boost human capital formation. This working Paper relates to the 2007 Economic Survey of India ( <P>Améliorer la formation du capital humain en Inde <BR>Permettre à l’ensemble de la population de bénéficier d’une éducation et de soins de santé de qualité est l’un des enjeux majeurs de la politique publique dans la plupart des pays. En Inde, les pouvoirs publics interviennent aussi bien dans l’éducation que dans les soins de santé, ce qui n’empêche pas le secteur privé de jouer un rôle important, en particulier dans le premier de ces domaines. À l’heure actuelle, les performances qualitatives et quantitatives de l’éducation et des services publics de santé constituent un frein au processus de développement économique. Des mesures ont été prises pour augmenter la fréquentation de l’enseignement primaire, et le présent document étudie les moyens de lutter contre les abandons scolaires. Il analyse également les changements institutionnels nécessaires pour contribuer à améliorer les performances du système éducatif et stimuler ainsi la formation du capital humain. Ce document de travail se rapporte à l’Étude économique de l’Inde 2007 (
    Keywords: tertiary education, education policy, Returns to education, literacy rates, age cohorts, primary, secondary, politique éducative, taux d’alphabétisation, cohorte d’âge, rendement de l’enseignement, primaire, secondaire, supérieur
    JEL: I0 I21 J24
    Date: 2008–08–04
  10. By: Mishra, SK; Nayak, Purusottam
    Abstract: This study has presented data relating to human development in Nagaland and made an attempt to observe regularities in the same that may be meaningful for devising development policies. The findings indicate that per capita income, human development index and gender-related development index are only poorly correlated with the health indicators such as IMR, IMRM and IMRF. Only the measures of educational attainment are appreciably correlated with PCY, HDI and GDI.  The paper concludes that the reliability of data reported by a socio-economic system is dependent on the level of development of the system. Underdeveloped socio-economic systems report highly unreliable data. This is not only regarding the figures of income; this is also true of the figures on measures of attainment in matters of health and education. Official data on these variables are thrown up by a system that is administratively motivated and unsupervised with regard to their economic and developmental meaning. Use of such data, whether they pertain to income or any other measure of development, is not dependable for policy decisions meaningful to fostering development.
    Keywords: Human Development; Nagaland
    JEL: O1 O15
    Date: 2008–08–04

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