nep-hap New Economics Papers
on Economics of Happiness
Issue of 2008‒11‒18
twelve papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Subjective aspects of economic poverty. Ordered response model approach By Hanna Dudek
  2. Comparing Life Satisfaction By Arie Kapteyn; James P. Smith; Arthur van Soest
  3. Child Health and Young Adult Outcomes By Janet Currie; Mark Stabile; Phongsack Manivong; Leslie L. Roos
  4. The World Distribution of Household Wealth By Davies, James B.; Sandstrom, Susanna; Shorrocks, Anthony; Wolff, Edward N.
  5. The rise of obesity in transition economies: theory and evidence from Russian longitudinal monitoring survey By Huffman, Sonya; Rizov, Marian
  6. Quality of Life in Urban Neighborhoods in Colombia:The Cases of Bogotá and Medellín By Carlos Medina; Leonardo Morales; Jairo Nuñez
  7. Analyzing Growth and Welfare Effects of Public Policies in Models of Endogenous Growth with Human Capital: Evidence from South Africa By Badibanga, Thaddee M.
  8. Socioeconomic Status, Neighborhood, Household Behavior, and Children's Health in the United States: Evidence from Children's Health Survey Data By Aradhyula, Satheesh; Rahman, Tauhidur
  9. The Dynamics of Welfare Participation among Women Who Experienced Teenage Motherhood in Australia By Sung-Hee Jeon; Guyonne Kalb; Ha Vu
  10. The welfare costs of national standards: a contribution to the debate on the outcomes of de/centralization By Brosio, Giorgio; Zanola, Roberto
  11. The Child Penalty - What about Job Amenities? By Christina Felfe
  12. Working Families and Economic Insecurity in the States: The Role of Job Quality and Work Supports By Shawn Fremstad; Rebecca Ray; Hye Jin Rho

  1. By: Hanna Dudek (Warsaw University of Life Sciences)
    Abstract: Paper analyses subjective economic welfare and well-being in Polish households. The study is based on the Household Budget Survey carried out by the Central Statistical Office in Poland. Subjective measures are estimated using households’ answers to questions about the own satisfaction with their financial situation. The inspiration for this research comes from Schwarze’s article [2003] where ordered logit model was applied to estimate the equivalence scale elasticity. Such model implicitly assumes that the effects of the explanatory variables are identical at each cut-off point between categories, what is known as the “parallel regression assumption”. Paper indicates the violation of this assumption for the sample of Polish households of retirees as the whole, while the assumption cannot be rejected when we exclude the poorest and richest households. Some of the paper’s results are similar to typical findings in poverty research, such as U-shaped relationship between age and subjective income satisfaction. Different results are found with regard to gender of household head. Also, as compared with other research for Polish data, the method applied here produces higher equivalence scale elasticity.
    Keywords: subjective economic welfare, equivalence scale elasticity, logit model
    JEL: I32 C25 C51
    Date: 2008–10–27
  2. By: Arie Kapteyn; James P. Smith; Arthur van Soest
    Abstract: This paper analyzes the determinants of global life satisfaction in two countries (The Netherlands and the U.S.), by using both self-reports and responses to a battery of vignette questions. The authors find global life satisfaction of happiness is well-described by four domains: job or daily activities, social contacts and family, health, and income. Among the four domains, social contacts and family have the highest impact on global life satisfaction, followed by job and daily activities and health. Income has the lowest impact. As in other work, they find that American response styles differ from the Dutch in that Americans are more likely to use the extremes of the scale (either very satisfied or very dissatisfied) than the Dutch, who are more inclined to stay in the middle of the scale. Although for both Americans and the Dutch, income is the least important determinant of global life satisfaction, it is more important in the U.S. than in The Netherlands. Indeed life satisfaction varies substantially more with income in the U.S. than in The Netherlands.
    JEL: I31 J28 D31
    Date: 2008–10
  3. By: Janet Currie; Mark Stabile; Phongsack Manivong; Leslie L. Roos
    Abstract: Previous research has shown a strong connection between birth weight and future child outcomes. But this research has not asked how insults to child health after birth affect long-term outcomes, whether health at birth matters primarily because it predicts future health or through some other mechanism, or whether health insults matter more at some key ages than at others? We address these questions using a unique data set based on public health insurance records for 50,000 children born between 1979 and 1987 in the Canadian province of Manitoba. These children are followed until 2006, and their records are linked to provincial registries with outcomes data. We compare children with health conditions to their own siblings born an average of 3 years apart, and control for health at birth. We find that health problems, and especially mental health problems in early childhood are significant determinants of outcomes linked to adult socioeconomic status.
    JEL: I1
    Date: 2008–11
  4. By: Davies, James B.; Sandstrom, Susanna; Shorrocks, Anthony; Wolff, Edward N.
    Abstract: There has been much recent research on the world distribution of income, but also growing recognition of the importance of other contributions -Date well-being, including those of household wealth. Wealth is important in providing security and opportunity, particularly in poorer countries that lack full social safety nets and adequate facilities for borrowing and lending. We find, however, that it is precisely in the latter countries where household wealth is the lowest, both in absolute and relative terms. Globally, wealth is more concentrated than income both on an individual and national basis. Roughly 30 per cent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world?s -Datep 1 per cent of wealth holders. On an official exchange rate basis India accounts for about a quarter of the adults in the bot-Datem three global wealth deciles while China provides about a third of those in the fourth -Date eighth deciles. If current growth trends continue, India, China and the transition countries will move up in the global distribution, and the lower deciles will be increasingly dominated by countries in Africa, Latin American and poor parts of the Asian-Pacific region. Thus wealth may continue -Date be lowest in areas where it is needed the most.
    Keywords: wealth, net worth, personal assets, wealth inequality, households, balance sheets, portfolios
    Date: 2008
  5. By: Huffman, Sonya; Rizov, Marian
    Abstract: This study integrates theoretical and empirical models to facilitate understanding of human obesity and the factors contributing to rising obesity in Russia during the transition from a planned to a market economy. Recent individual level data from the Russian Longitudinal Monitoring Survey for 1994 and 2004 show that diet/caloric intake, smoking, gender and education are important determinants of obesity in Russia. Empirical results strongly support our model for production of BMI and demand for inputs in the BMI production function. The analysis provides information on the link between dietary patterns and other factors of obesity in Russia which is important for formulation, implementation and monitoring of effective policies designed to improve overall nutritional wellbeing and reduce obesity and mortality of the Russian population. Interventions, which enhance education toward healthy lifestyles and healthy diet, could play a vital role in preventing obesity in Russia.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2008
  6. By: Carlos Medina; Leonardo Morales; Jairo Nuñez
    Abstract: We use data from Bogotá and Medellín to describe key quality of life indicators of each city and illustrate their spatial segregation at the census sector level and present evidence that the main two Colombian cities are highly spatially segregated according to their education levels and access to education, coverage of public services, households headed by women and key demographic variables like their levels of adolescent pregnancy. Not surprisingly, our estimated quality of life indexes resemble the mentioned segregation patterns in each city. We present evidence that the spatial agglomeration is statistically significant for each of the variables enumerated. We estimate hedonic models of house values and life satisfaction for Bogotá and Medellín and find that the importance of the average level of education at the census sector level to determine house prices is striking. We also compare hedonic models for Bogotá and Medellín. Bogotá is better endowed than Medellín in the variables included in the analysis, in particular, it has higher education levels, and additionally, education is more equally distributed within census sectors. Bogotá has also better access to gas, and has in general houses with better conditions. The models based on house values and life satisfaction approaches used in this article lead to similar conclusions in the aggregate when comparing their implied quality of life indexes. Although each approach allows us to rank the specific determinants of quality of life, and these determinant depend on the approach, their implied aggregated indexes suggest that they are just different faces of the same story. From a policy perspective, the evidence suggests that redesigning the current socioeconomic stratification system in a way that still allows reaching the poorest while preventing segregation to deepen, might be among the most important challenge to face in order to improve quality of life in main Colombian cities.
    Date: 2008–11–06
  7. By: Badibanga, Thaddee M.
    Abstract: Since the abolition of its Apartheid regime in 1994, South Africa has launched a massive program of education, which has been financed through resources representing on average 21% of the national budget or 7% of GDP. Today, the GDP share of public spending on education is 1.3 times the average of industrialized countries (5.4%) and almost twice that of developing countries (3.9%). In this paper, we simulate fiscal policy experiments to analyze the growth and welfare effects of a shift in the allocation of government expenditures between public spending on education and transfers as well as those of a change in the tax rate in a model of endogenous growth with human capital accumulation for the South African economy. The results of simulations demonstrate that a shift in the allocation of fiscal resources between educational spending and transfers does not affect the long run allocation decisions. In the transition, however, this shift generates a negative effect on the rate of growth of GDP. In fact, a reallocation of expenditures shifts resources away from saving and toward consumption, and translate into lower rate of growth but higher welfare. Nonetheless, these growth and welfare effects are very small. On the other hand, a tax cut generates growth effects in the long run as well as in transition. In fact, reducing or cutting the tax rate in the long run lowers the interest rate, which in turn creates disincentives for saving and results in low rate of growth of GDP. However, in the transition, it reduces or removes distortions and translates into high work effort, high accumulation of human capital, and thus high rate of growth of GDP. Nonetheless, its welfare effect is negative.
    Keywords: Fiscal Policy, Government Expenditures and Education, Growth Model, International Development, Labor and Human Capital, E62, H52, O41,
    Date: 2008
  8. By: Aradhyula, Satheesh; Rahman, Tauhidur
    Abstract: Using insights from economics, pediatrics, psychology, and sociology, this paper examines the effects of income, income inequality, neighborhood characteristics, maternal health, the participation in religious services, breastfeeding, household smoking, and racial/ethnic composition of population on child health. Using aggregate data on children's health and well-being for 50 U.S. states derived from the National Survey of Children's Health (NSCH, 2005), we document the following results: (1) the independent effects of income inequality on children's health vary across domains of child health outcomes, as some aspects of child health (mental health) are more responsive to the immediate environment of family and neighborhood than others; (2) neighborhood characteristics are powerful predictors of children's health; (3) there is a large effect of maternal health on children's health; (4) children who participate in religious services at least once a week have less socio-emotional difficulties compared to children who do not, and (5) breastfeeding has beneficial effect on children's health, while household smoking has negative effect on children's health and well-being.
    Keywords: Consumer/Household Economics, Health Economics and Policy,
    Date: 2008
  9. By: Sung-Hee Jeon (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Guyonne Kalb (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Ha Vu (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This study examines whether the factors that determine the welfare participation of women who experienced teenage motherhood differ from the factors that determine the welfare participation of women who had their first child at an older age. We examine these factors across the lifetimes of both groups of women. A dynamic random effects probit model is applied to investigate the extent of state dependence in welfare participation while allowing for observed and unobserved individual heterogeneity. We find evidence of state dependence for all women, but it is stronger for women who experienced teenage childbearing than for women who had a child at an older age. In addition, poor health is an important factor in increasing the probability of the welfare participation of women who experienced teenage childbearing.
    Date: 2008–11
  10. By: Brosio, Giorgio; Zanola, Roberto
    Abstract: This paper analyzes the welfare losses deriving from centralized, uniform levels of public provision of good and services deriving from standards set up by a given level of government. The aim of the paper is to contribute to the growing literature on the e?ective outcomes of decentralization by looking at the other side of the coin, namely at the impact of centralized provision. It develops a simple theoretical model and tests it with reference to public health care provision in Italy. The evidence shows that, while levels of satisfaction increase with income, which is a standard result of the theory, they are lower in the poorer regions where, due to the standards, the share of income absorbed by health care is substantially higher than in the richer regions.
    Date: 2008–10
  11. By: Christina Felfe
    Abstract: Women with children tend to earn lower hourly wages than women without children - a shortfall known as the ‘child penalty’. While many studies provide evidence for this empirical fact and explore several hypotheses about its causes, the impact of motherhood on job dimensions other than wages has scarcely been investigated. In order to assess changes in women’s jobs around the time of first childbirth, I use data from the German Socio-Economic Panel and apply an event study analysis. The results show not only a significant change in women's hourly wages (-19%) once becoming mothers, but also in other non-pecuniary job characteristics, such as working hours (-15 hours), night work (-6%), work in the evening hours (-8%), stress (-10%), physical requirements (4%), hazards (-3%) and distance to the workplace (-1km). In order to assess the hypothesis that mothers might substitute wages for non-wage benefits, I additionally estimate a hedonic wage regression. The results suggest that mothers trade pecuniary for non-pecuniary job characteristics and hence, that part of the child penalty (8.2%) might be interpreted as a compensating wage differential.
    Keywords: Penalty, Compensating Wage Differentials, Sample Selection in Panel Data
    JEL: J31 J33
    Date: 2008–11
  12. By: Shawn Fremstad; Rebecca Ray; Hye Jin Rho
    Abstract: Synthesizing previous CEPR research, this report uses a new methodology to better assess the economic security of working families. Rather than using the federal poverty line as a metric for a family's economic hardship, the authors of this report use basic family budgets and consider the role of public works supports to present a more accurate picture of a working family's economic needs for attaining a basic standard of living in their communities. The study includes results for 45 states and the District of Columbia.
    Keywords: economic security, working families, standard of living, work supports
    JEL: I I38 J J08 J68 J88 O51
    Date: 2008–05

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