New Economics Papers
on Economics of Happiness
Issue of 2008‒08‒31
seven papers chosen by

  1. Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox By Stevenson, Betsey; Wolfers, Justin
  2. How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being By Pencavel, John
  3. Subjective Well-Being in the Southern Cone: Health, Income and Family By Alejandro Cid; Daniel Ferres; Máximo Rossi
  4. What are Human Rights? Human Rights as Membership Rights in the Global Order By Risse, Mathias
  5. Unbundled Institutions, Human Capital and Growth By Sambit Bhattacharyya
  6. Vulnerability and poverty in Timor-Lesté By Raghbendra Jha; Tu Dang
  7. Threats in Latin American and Caribbean countries: how do inequality and the asymmetries of rules affect tax morale? By Mariana Gerstenblüth; Natalia Melgar; Juan Pablo Pagano; Máximo Rossi

  1. By: Stevenson, Betsey (Wharton School, University of Pennsylvania); Wolfers, Justin (Wharton School, University of Pennsylvania)
    Abstract: The “Easterlin paradox” suggests that there is no link between a society’s economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.
    Keywords: happiness, subjective well-being, Easterlin Paradox, life satisfaction, economic growth, well-being-income gradient, hedonic treadmill
    JEL: D6 I3 J1
    Date: 2008–08
  2. By: Pencavel, John (Stanford University)
    Abstract: Can conventional economic analysis help in defining and measuring the success of labor unions? In this paper, a general indicator of union welfare is proposed and particular expressions for the wage and employment objectives of unions are rearranged to derive measures of union success or welfare. These indicators combine two measures: union density and the relative union-nonunion wage gap. The indicators are applied to describe the movement of union welfare in the United States over the past eighty years, the differences in union success among groups of U.S. workers, and the variation in union well-being across countries.
    Keywords: trade unions, union density, relative wage effect of unionism, union objectives
    JEL: J51
    Date: 2008–08
  3. By: Alejandro Cid (Universidad de Montevideo); Daniel Ferres (Universidad de Montevideo); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The happiness literature provides evidence on various factors, other than money, that do seem to contribute to individual happiness. As one explores the produced “happiness economics” literature, it is direct to understand the difficulty to find proper information on developing countries reality. In our analysis we investigate the relationship between income, family composition, health and religion over subjective well-being in the Southern Cone (Argentina, Chile and Uruguay). Specifically, we analyze data from the SABE survey a study conducted among people who are 60 years old or over, in various Latin American countries. Main obtained results show a positive correlation between higher levels of income and health,being married and the frequent religion practice and higher levels of subjective well-being. On the contrary, malnutrition has a negative impact on happiness indicators. In order to add robustness to our results and to deal with endogeneity issues, this paper uses different indicators of well-being, alternative estimation models such as a semiparametric one and a propensity score approach for the treatment of marriage.
    Keywords: well-being, happiness, elderly, health, family; Latin America
    JEL: I31 I10 J14 J12
    Date: 2008–07
  4. By: Risse, Mathias (Havard U)
    Abstract: Why do we have human rights? What ought to be the function of such rights in the global order, and to what extent does this help define what they are? Who needs to do what to realize these rights? In response to such questions this paper develops a conception of human rights that thinks of them as membership rights in the global order. Human rights are derived from contingent but relatively abiding political and economic arrangements. This conception has some intuitive disadvantages, but makes clear how human rights can be of genuinely global relevance; can explain why the language of rights (rather than goals or values) is appropriate here in the first place; derives human rights from relatively simple foundations; and can account of the range of disagreement that persists about precisely what should count as a human right.
    Date: 2008–01
  5. By: Sambit Bhattacharyya
    Abstract: We investigate the partial effects of institutions and human capital on growth. We find that cross-country regressions of the log-level of per capita GDP on instrumented measures of institutions and schooling are uninformative about the relative importance of institutions and human capital in the long run because of multicollinearity problems. Using dynamic panel regressions we show that both institutions and human capital have significant effects on growth. Using Rodrik's (2005) four-way partition of institutions, we also unbundle institutions. We show that strong market creating institutions and market stabilising institutions are growth enhancing. Market regulating institutions matter up to a certain extent and market legitimising institutions does not seem to matter.
    Keywords: Institutions; Human Capital; Growth
    JEL: O11 O30 O43 O57
    Date: 2008
  6. By: Raghbendra Jha; Tu Dang
    Abstract: Economists have long recognized that a household's well-being depends not just on its average income or expenditure, but also on the risks it faces. Hence vulnerability is a more satisfactory measure of (inadequate) welfare than poverty. We measure vulnerability as expected poverty and establish the importance of its determinants, for Timor Leste' based on the 2001 Living Standard Measurement Survey. The incidence of inadequate food consumption and vulnerability to food inadequacy are more severe than overall poverty and vulnerability to poverty. Poverty and vulnerability in Timor-Leste' is largely a rural phenomenon. Policy options to reduce vulnerability are also discussed.
    Keywords: Poverty, Vulnerability, Food security, Cross-section data
    JEL: C23 I32
    Date: 2008
  7. By: Mariana Gerstenblüth (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Natalia Melgar (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Juan Pablo Pagano (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: Latin America is well known as the most inequitable region. As it is recognized, inequality and corruption perception weaken the way that political institutions works and the democratic system. Focusing on Latin American and Caribbean countries, we analyze what are the elements that shape tax morale. In particular, we analyze how the context influences on ethic decisions such as the predisposition to pay taxes. Our data source is the survey carried out in 2005 by Latinobarometro. In particular, our objective is to analyze how country performance is determining tax morale. To do so, we estimated four probit models including Gini index, Transparency International Corruption Perception Index and Gross Domestic Product per capita (GDPpc). As expected we found that some socio-demographic variables play a relevant role. Interestingly, we also found that, in this attitude, LAC countries do not register a gender bias. However, those are not our main contributions to the literature on the field. The most important results are linked with: 1) the level matters, GDPpc increases the probability that people have tax morale, 2) moreover, income distribution also influence on tax morale but in opposite direction and 3) corruption perception also reduces tax morale. Those results show that the quality of institutions matters and therefore, the way that democracy works play a relevant role.
    Keywords: tax morale, corruption, inequality, democracy, microeconomic behavior
    JEL: H26 H73
    Date: 2008–08

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