nep-hap New Economics Papers
on Economics of Happiness
Issue of 2009‒03‒14
four papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Winning big but feeling no better? The effect of lottery prizes on physical and mental health By Bénédicte Apouey; Andrew E. Clark
  2. The implications of incorrect utility function specification for welfare measurement in choice experiments By Riera, Antoni; Hanley, Nick; Torres, Cati
  3. Job satisfaction, working conditions and job-expectations By Ambra Poggi
  4. The Connection between Biodiversity and Well-Being: A New Zealand Case Study By Richard Yao; Pamela Kaval

  1. By: Bénédicte Apouey; Andrew E. Clark
    Abstract: We use British panel data to explore the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and health behaviours (drinking and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as the amount won is largely exogenous. These positive income shocks have no significant effect on general health, but a large positive effect on mental health. This result seems paradoxical on two levels. First, there is a wellknown status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that exogenous income is associated with greater risky health behaviours: lottery winners smoke more and engage in more social drinking. General health will pick up both mental health and the effect of these behaviours, and so may not improve following a positive income shock. This paper presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions.
    Date: 2009
  2. By: Riera, Antoni; Hanley, Nick; Torres, Cati
    Abstract: Despite the vital role of utility functional form in welfare measurement, the implications of working with incorrect utility specifications have not been examined in the choice experiments (CE) literature. This paper addresses the importance of the specification of both non-monetary attributes and the marginal utility of income. Monte Carlo experiments have been conducted wherein different attribute specifications and assumptions for the Cost parameter -that is, different functional forms of utility- have been assumed to generate simulated choices on which Multi-Nomial Logit and Mixed Logit models have been estimated under correct and incorrect assumptions about the true, underlying utility function. The inferred values have been compared with the true ones directly calculated from the true utility specifications. Results show that working with simple experimental designs and continuous-linear specifications makes attribute specification irrelevant for measuring attribute marginal values regardless of the true effects the attribute has on utility.
    Keywords: Monte Carlo analysis; choice experiments; efficiency; accuracy; welfare measurement; attributes; utility specification
    Date: 2009–02
  3. By: Ambra Poggi
    Abstract: According to Sen’s capability approach, objective working conditions can be seen as functionings (i.e. things experienced by the individuals). The corresponding capability set includes all sets of alternatives working conditions existing in the society for a given kind of job. Observing the existing capability set of working conditions, individuals formulate expectations about their own working conditions. These expectations might create biases in the realistic perceptions of job satisfaction. Our aim is to study the determinants of worker perceptions of quality of work in EU Countries. In particular, we shed light on the complex relationship that exists between job satisfaction, objective working conditions and workers expectations. First, we determine which objective working conditions impact on the level of job satisfaction. Second, we test the existence, and the signs, of biases in the realistic perception of job satisfaction due to the existence of expectations. Third, we test if expectations are affected by the working conditions actually experienced in the job place. From a technically point of view, we estimate a two-tiered stochastic frontier model. We find that expectations biases exist. High expectations have stronger effects in reducing job satisfaction than low expectation in increasing job expectations. Finally, expectations are affected by the working conditions actually experienced by the workers.
    Keywords: Job satisfaction, working conditions, expectations, two-tiered stochastic frontier model.
    JEL: J81 J28 I31
    Date: 2008
  4. By: Richard Yao (University of Waikato); Pamela Kaval (University of Waikato)
    Abstract: The link between human well-being and biodiversity has not been well studied and was therefore the goal of this research project. Focus was placed on an increase in New Zealand native biodiversity, by an increase in the number of native trees and shrubs being planted on public lands. An increase in well-being occurred in response to an increase in native biodiversity for urban residents that have lived in their current home for less than six years. Responses were also affected by household income, whether a person was self employed and their level of education. We believe this information will be useful in targeting future community participants for voluntary biodiversity projects.
    Keywords: native biodiversity; New Zealand; well-being; utility; community volunteers
    JEL: Q57 Q2 Q51
    Date: 2009–02–28

This nep-hap issue is ©2009 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.