New Economics Papers
on Economics of Happiness
Issue of 2008‒09‒13
twelve papers chosen by

  1. With or Without You? Measuring the Quality of Relational Life Throughout the World By Luca Stanca
  2. The Economic Thought on Poverty Measurement: From the Nineteenth-Century to the Rediscovering Era By Celso Nunes
  3. Poverty Measurement: The Development of Different Approaches and Its Techniques By Celso Nunes
  4. The measurement of inequality of opportunity : theory and an application to Latin America By Ferreira , Francisco H. G.; Gignoux, Jeremie
  5. Technology trap and poverty trap in Sub-Saharan Africa By Fofack, Hippolyte
  6. China is poorer than we thought, but no less successful in the fight against poverty By Chen, Shaohua; Ravallion, Martin
  7. Global poverty and inequality : a review of the evidence By Ferreira, Francisco H.G.; Ravallion, Martin
  8. Assessing asset indices By Filmer, Deon; Scott, Kinnon
  9. Objective and subjective indicators of happiness in Brazil: The mediating role of social By Islam, Gazi
  10. Housing, Health and Happiness By Matias Cattaneo; Sebastian Galiani; Paul Gertler; Sebastian Martinez; Rocio Titiunik
  11. Deconstructing the Hedonic Treadmill By Perez Truglia, Ricardo Nicolas; Bottan, Nicolas Luis
  12. Human Well-Being over the Life Cycle: Longitudinal Evidence from a 20-Year Panel By Bert G.M. Van Landeghem

  1. By: Luca Stanca
    Abstract: This paper proposes a new method for the measurement of the quality of relational life. Building on the recent literature on the determinants of subjective well-being, we use implicit valuations estimated from microeconometric life-satisfaction equations to weigh and aggregate scores on several dimensions of relational life. We apply the proposed method to a large sample of individuals from 82 countries, to construct indicators that focus on three dimensions of interpersonal relations: friends, family, and society. We use the constructed indicators to compare the quality of relational life across countries throughout the world and to explore its determinants at individual and country level. Overall, the results indicate that, ceteris paribus, better economic conditions are associated with higher quality of interpersonal relationships.
    Keywords: subjective well-being, relational capital, quality of life
    JEL: A13 D6 I31 Z13
    Date: 2008–07
  2. By: Celso Nunes (Madeira University)
    Abstract: This essay describes the evolution of the Economics of Poverty from the seminal works of Charles Booth and Joseph Rowntree to the Rediscovering Era in the 1960’s. It shows how the leading objectives of its authors changed over the decades. The description is roughly exhaustive, pointing out the way how the leading concepts, many of them frequently used even nowadays, were developed by its authors.
    Keywords: Economic Thought, Poverty, Measurement
    JEL: B19 B29 B49 I32
    Date: 2008
  3. By: Celso Nunes (Madeira University)
    Abstract: This work concentrates in the fundamental ideas that constitute the existing theoretical framework of the poverty measurement from the 1960’s to the state-of-the-art, with an extended comment on the more relevant issues, the presentation of more influencing approaches and the probable path of future research in Poverty Economics.
    Keywords: Approaches, Poverty Measurement, Techniques
    JEL: B49 I32
    Date: 2008
  4. By: Ferreira , Francisco H. G.; Gignoux, Jeremie
    Abstract: What part of the inequality observed in a particular country is due to unequal opportunities, rather than to differences in individual efforts or luck? This paper estimates a lower bound for the opportunity share of inequality in labor earnings, household income per capita and household consumption per capita in six Latin American countries. Following John Roemer, the authors associate inequality of opportunity with outcome differences that can be accounted for by morally irrelevant pre-determined circumstances, such as race, gender, place of birth, and family background. Thus defined, unequal opportunities account for between 24 and 50 percent of inequality in consumption expenditure in the sample. Brazil and Central America are more opportunity-unequal than Colombia, Ecuador, or Peru."Opportunity profiles,"which identify the social groups with the most limited opportunity sets, are shown to be distinct from poverty profiles: ethnic origin and the geography of birth are markedly more important as determinants of opportunity deprivation than of outcome poverty, particularly in Brazil, Guatemala, and Peru.
    Keywords: Inequality,Rural Poverty Reduction,Access to Finance,Equity and Development,Services&Transfers to Poor
    Date: 2008–07–01
  5. By: Fofack, Hippolyte
    Abstract: Since the industrial revolution, advances in science and technology have continuously accounted for most of the growth and wealth accumulation in leading industrialized economies. In recent years, the contribution of technological progress to growth and welfare improvement has increased even further, especially with the globalization process which has been characterized by exponential growth in exports of manufactured goods. This paper establishes the existence of a technology trap in Sub-Saharan Africa. It shows that the widening income and welfare gap between Sub-Saharan Africa and the rest of world is largely accounted for by the technology trap responsible for the poverty trap. This result is supported by empirical evidence which suggests that if countries in Sub-Saharan Africa were using the same level of technology enjoyed by industrialized countries income levels in Sub-Saharan Africa would be significantly higher. The result is robust, even after controlling for institutional, macroeconomic instability and volatility factors. Consistent with standard one-sector neoclassical growth models, this suggests that uniform convergence to a worldwide technology frontier may lead to income convergence in the spherical space. Overcoming the technology trap in Sub-Saharan Africa may therefore be essential to achieving the Millennium Development Goals and evolving toward global convergence in the process of economic development.
    Keywords: Technology Industry,Economic Theory&Research,Achieving Shared Growth,ICT Policy and Strategies,E-Business
    Date: 2008–03–01
  6. By: Chen, Shaohua; Ravallion, Martin
    Abstract: In 2005, China participated for the first time in the International Comparison Program (ICP), which collects primary data across countries on the prices for an internationally comparable list of goods and services. This paper examines the implications of the new Purchasing Power Parity (PPP) rate (derived by the ICP) for China's poverty rate (by international standards) and how it has changed over time. We provide estimates with and without adjustment for a likely sampling bias in the ICP data. Using an international poverty line of USD 1.25 at 2005 PPP, we find a substantially higher poverty rate for China than past estimates, with about 15% of the population living in consumption poverty, implying about 130 million more poor by this standard. The income poverty rate in 2005 is 10%, implying about 65 million more people living in poverty. However, the new ICP data suggest an even larger reduction in the number of poor since 1981.
    Keywords: Rural Poverty Reduction,Population Policies,Achieving Shared Growth,ICT Applications
    Date: 2008–05–01
  7. By: Ferreira, Francisco H.G.; Ravallion, Martin
    Abstract: Drawing on a compilation of data from household surveys representing 130 countries, many over a period of 25 years, this paper reviews the evidence on levels and recent trends in global poverty and income inequality. It documents the negative correlations between both poverty and inequality indices, on the one hand, and mean income per capita on the other. It points to the dominant role of Asia in accounting for the bulk of the world's poverty reduction since 1981. The evolution of global inequality in the last decades is also described, with special emphasis on the different trends of inequality within and between countries. The statistical relationships between growth, inequality and poverty are discussed, as is the correlation between inequality and the growth elasticity of poverty reduction. Some of the recent literature on the drivers of distributional change in developing countries is also reviewed.
    Keywords: Inequality,Achieving Shared Growth,Services&Transfers to Poor,Population Policies,Poverty Impact Evaluation
    Date: 2008–05–01
  8. By: Filmer, Deon; Scott, Kinnon
    Abstract: This paper compares how results using various methods to construct asset indices match results using per capita expenditures. The analysis shows that inferences about inequalities in education, health care use, fertility, child mortality, as well as labor market outcomes are quite robust to the specific economic status measure used. The measures-most significantly per capita expenditures versus the class of asset indices-do not, however, yield identical household rankings. Two factors stand out in predicting the degree of congruence in rankings between per capita expenditures and an asset index. First is the extent to which per capita expenditures can be explained by observed household and community characteristics. In settings with small transitory shocks to expenditure, or with little measurement error in expenditure, the rankings yielded by the alternative approaches are most similar. Second is the extent to which expenditures are dominated by individually consumed goods such as food. Asset indices are typically derived from indicators of goods which are effectively public at the household level, while expenditures are often dominated by food, an almost exclusively private good. In settings where private goods such as food are the main component of expenditures, asset indices and per capita consumption yield the least similar results, although adjusting for economies of scale in household expenditures reconciles the results somewhat.
    Keywords: Access to Finance,Investment and Investment Climate,Population Policies,Debt Markets,Health Systems Development&Reform
    Date: 2008–04–01
  9. By: Islam, Gazi
    Date: 2008–10
  10. By: Matias Cattaneo (Department of Economics, University of Michigan); Sebastian Galiani (Department of Economics, Washington University in St. Louis); Paul Gertler (Haas Business School, University of California); Sebastian Martinez (World Bank); Rocio Titiunik (Department of Agricultural and Resource Economics, University of California)
    Abstract: Despite the importance of housing for people’s well-being, there is little evidence on the causal impact of housing and housing improvement programs on health and welfare. In this paper, we help to fill this gap by investigating the impact of a large-scale effort by the Mexican Government to replace dirt floors with cement floors on child health and adult happiness. We find that replacing dirt floors with cement floors significantly improves the health of young children. Specifically, we find significant decreases in the incidence of parasitic infestations, diarrhea, and the prevalence of anemia, and an improvement in children’s cognitive development. Additionally, we find that replacing dirt floors by cement floors significantly improves adult welfare, as measured by increased satisfaction with their housing and quality of life, as well as by lower scores on depression and perceived stress scales.
    JEL: I12 I38 H43
    Date: 2008–08
  11. By: Perez Truglia, Ricardo Nicolas; Bottan, Nicolas Luis
    Abstract: There is consent among psychologists and some economists that satisfaction from some events, like income and marriage, is adaptive. We propose a subtle but vital difference: happiness may itself be adaptive. First we present a model to explain the emergence of adaptive stimuli. We test our hypotheses running dynamic happiness regressions based on data from the German Socio-Economic Panel Study, the British Household Panel Survey and the Swiss Household Panel. Surprisingly, the autoregressive component is positive and significant in most econometric models considered. We propose that the hedonic treadmill may be mixed with what we call the "scale treadmill".
    Keywords: happiness; adaptation; dynamic panel
    JEL: I31 C23 I00
    Date: 2008–08–15
  12. By: Bert G.M. Van Landeghem
    Abstract: This paper uses longitudinal data from the German Socioeconomic Panel (GSOEP) to analyze the course of subjective well-being over the life cycle. The long time dimension offers an opportunity to disentangle ageing effects from fixed birth co- hort effects. The paper ¯finds that the U-shaped pattern of life satisfaction over age is less supported in a longitudinal analysis, and that the observed trajectory can vary across model specifications. Moreover, assets and material well-being seem to play an important role in determining the course of satisfaction over life time. The upsurge of happiness after mid-life seems to be more robust to model specifications, which might imply that the latter is inherent to mankind.
    Keywords: subjective well-being, life cycle happiness, ageing, birth cohorts, U-shape, German Socio-Economic Panel
    JEL: C23 I31 J10
    Date: 2008

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