New Economics Papers
on Economics of Happiness
Issue of 2009‒02‒28
eight papers chosen by

  1. The 60es turnaround as a test on the causal relationship between sociability and happiness By Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
  2. Imitative Obesity and Relative Utility By Blanchflower, David G.; Oswald, Andrew J.; Van Landeghem, Bert
  3. Life Satisfaction By Kapteyn, Arie; Smith, James P.; van Soest, Arthur
  4. Happiness and Economic Growth: Does the Cross Section Predict Time Trends? Evidence from Developing Countries By Easterlin, Richard A.; Sawangfa, Onnicha
  5. Measuring Inequality Using Censored Data: A Multiple Imputation Approach By Jenkins, Stephen P.; Burkhauser, Richard V.; Feng, Shuaizhang; Larrimore, Jeff
  6. The Economics and Psychology of Inequality and Human Development By Cunha, Flavio; Heckman, James J.
  7. Parental Depression and Children’s Developmental Outcomes: The Mediating Influence of Parenting Behavior By Kristin Turney
  8. Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox By Stevenson, Betsey; Wolfers, Justin

  1. By: Leonardo Becchetti (University of Rome Tor Vergata); Elena Giachin Ricca (University of Rome Tor Vergata); Alessandra Pelloni (University of Rome Tor Vergata)
    Abstract: The nexus between relational life and life satisfaction is riddled with endogeneity problems. By investigating the causal relationship going from the first to the second variable we consider that retirement is a shock which increases the time investable in (outside job) relational life. As a consequence we instrument investment in relational goods with the aggregate exogenous age-retirement pattern. With such approach we document that investment in relational life has a positive and significant effect on life satisfaction. Consequences of our findings in terms of retirement effects and age-happiness pattern are also discussed.
    Keywords: life satisfaction, relational goods, social capital
    JEL: I30 D61 A11 A13
    Date: 2009–02
  2. By: Blanchflower, David G. (Dartmouth College); Oswald, Andrew J. (University of Warwick); Van Landeghem, Bert (Catholic University of Leuven)
    Abstract: If human beings care about their relative weight, a form of imitative obesity can emerge (in which people subconsciously keep up with the weight of the Joneses). Using Eurobarometer data on 29 countries, this paper provides cross-sectional evidence that overweight perceptions and dieting are influenced by a person’s relative BMI, and longitudinal evidence from the German Socioeconomic Panel that well-being is influenced by relative BMI. Highly educated people see themselves as fatter − at any given actual weight − than those with low education. These results should be treated cautiously, and fixed-effects estimates are not always well-determined, but there are grounds to take seriously the possibility of socially contagious obesity.
    Keywords: mental health, dieting, peer effects, happiness, imitation, comparisons, body mass index BMI, well-being, obesity
    JEL: D1 I12 I31
    Date: 2009–02
  3. By: Kapteyn, Arie (RAND); Smith, James P. (RAND); van Soest, Arthur (Tilburg University)
    Abstract: We analyze 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. We 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, we 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.
    Keywords: happiness, life satisfaction, vignettes, reporting bias
    JEL: I31 J28 D31
    Date: 2009–02
  4. By: Easterlin, Richard A. (University of Southern California); Sawangfa, Onnicha (University of Southern California)
    Abstract: Based on point-of-time comparisons of happiness in richer and poorer countries, it is commonly asserted that economic growth will have a significant positive impact on happiness in poorer countries, if not richer. The time trends of subjective well-being (SWB) in 13 developing countries, however, are not significantly related to predictions derived from the cross sectional relation of happiness to GDP per capita. The point-of-time comparison leads to the expectation that the same absolute increase in GDP per capita will have a bigger impact on SWB in a poorer than a richer country. In fact there is no significant relation between actual trends in SWB and those predicted from the cross sectional relationship. Nor is a higher percentage rate of growth in GDP per capita significantly positively associated with a greater improvement in SWB. In the developing countries studied here a greater increase in happiness does not accompany more rapid economic growth. These conclusions hold true for two measures of SWB that are separately analyzed, overall life satisfaction and satisfaction with finances. The two SWB measures themselves, however, typically trend similarly within a country, providing mutually supporting evidence of the trend in well-being.
    Keywords: happiness, economic growth, developing countries
    JEL: I31 D60 O5 O10
    Date: 2009–02
  5. By: Jenkins, Stephen P. (University of Essex); Burkhauser, Richard V. (Cornell University); Feng, Shuaizhang (Princeton University); Larrimore, Jeff (Cornell University)
    Abstract: To measure income inequality with right censored (topcoded) data, we propose multiple imputation for censored observations using draws from Generalized Beta of the Second Kind distributions to provide partially synthetic datasets analyzed using complete data methods. Estimation and inference uses Reiter’s (Survey Methodology 2003) formulae. Using Current Population Survey (CPS) internal data, we find few statistically significant differences in income inequality for pairs of years between 1995 and 2004. We also show that using CPS public use data with cell mean imputations may lead to incorrect inferences about inequality differences. Multiply-imputed public use data provide an intermediate solution.
    Keywords: income inequality, topcoding, partially synthetic data, CPS, Current Population Survey, Generalized Beta of the Second Kind distribution
    JEL: D31 C46 C81
    Date: 2009–02
  6. By: Cunha, Flavio (University of Pennsylvania); Heckman, James J. (University of Chicago)
    Abstract: Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
    Keywords: inequality, capabilities, noncognitive traits, human development, technology of capability formation, policy targeting
    JEL: A12
    Date: 2009–02
  7. By: Kristin Turney (University of Pennsylvania)
    Abstract: This paper uses data from a subsample of the Fragile Families and Child Well-being survey (N = 1,799) to examine the relationship between parental depression and children’s developmental outcomes. Results suggest that parental depression when children are 12 months old, particularly maternal depression, leads to less favorable behavioral but not cognitive outcomes among children. Maternal parenting behaviors including discipline, neglect, and parenting stress are also associated with children’s behavior, and attenuate the negative consequences of episodic but not chronic maternal depression. This research extends past literature by using a large, non-clinical, and representative sample; by incorporating reports of both parents; and, importantly, by elucidating mechanisms through which depression matters for children.
    Keywords: Fragile Families and Child Wellbeing study, mental health, depression, children’s behavioral outcomes, transition to parenthood
    Date: 2008–11
  8. By: Stevenson, Betsey; Wolfers, Justin
    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: Easterlin Paradox; economic growth; happiness; hedonic treadmill; life satisfaction; quality of life; subjective well-being; well-being-income gradient
    JEL: D6 I3 J1
    Date: 2008–08

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