New Economics Papers
on Economics of Happiness
Issue of 2009‒07‒28
twelve papers chosen by

  1. Does Fertility Decrease the Welfare of Households? An Analysis of Poverty Dynamics and Fertility in Indonesia. By Kim Jungho; Henriette Engelhardt; Alexia Prskawetz; Arnstein Aassve
  2. External Shocks, Household Consumption and Fertility in Indonesia By Kim Jungho; Alexia Prskawetz
  3. Weather and Financial Risk-Taking: Is Happiness the Channel? By Cahit Guven
  4. Why Is The World Getting Older? The Influence of Happiness on Mortality By Cahit Guven; Rudolph Saloumidis
  5. Are Happier People Better Citizens? By Cahit Guven
  6. Dalle Capability Esterne alle Capability Collettive By Nicolò Bellanca; Mario Biggeri
  7. Le teorie della Disabilità: una Reinterpretazione Attraverso l'Approccio delle Capability Amartya Sen By Mario Biggeri; Jean-Francois Trani; Parul Bakhshi
  8. La Disabilità nell'Approccio delle Capability By Nicolò Bellanca; Mario Biggeri; Francesca Marchetta
  9. Household income, poverty and wealth By Richard Hauser
  10. Measuring social competencies By Ingrid Schoon
  11. Inequality in Human Development: An empirical assessment of thirty-two countries By Michael Grimm; Kenneth Harttgen; Stephan Klasen; Mark Misselhorn; Teresa Munzi; Timothy Smeeding
  12. Pro-Poor Progress in Education in Developing Countries? By Kenneth Hartgen; Stephan Klasen; Mark Misselhorn

  1. By: Kim Jungho; Henriette Engelhardt; Alexia Prskawetz; Arnstein Aassve
    Abstract: It is generally accepted that lower population growth is associated with positive economic development. Although there is a large body of literature supporting this hypothesis at the macro level, few studies have analyzed the causal e®ect of fertility on household welfare at the micro level. In this paper we present an empirical analysis of the relationship between household welfare and fertility for Indonesia - a country which has experienced unprecedented economic growth and sharp fertility declines over recent decades. The focus of our paper is twofold: First, we introduce and apply propensity score matching methods to study the rela- tionship between fertility outcomes and economic variables at the household level. Secondly, we explicitly test for the sensitivity of our results with respect to alternative measures of welfare at the household level. When consumption expenditure per person is used as a measure of welfare, the analysis suggests that the correlation between fertility and household welfare is sensitive to the choice of the parameters governing economics of scale and equivalence scales at the household level. The lower these values are the less likely will an additional child depress household welfare. On the other hand, when the share of food in total expenditure is used as a measure of welfare, the result does not produce a decisive sign of the correlation between fertility and household welfare.
    Keywords: Poverty Dynamics, Fertility, Welfare, Household Size, Indonesia
    Date: 2009–05
  2. By: Kim Jungho; Alexia Prskawetz
    Abstract: This paper examines the impact of idiosyncratic income shocks on household consumption, educational expenditure and fertility in Indonesia, and assesses whether the investment in human capital of children and fertility are used to smooth household consumption. Using six different kinds of self-reported economic hardships, our findings indicate that coping mechanisms are rather efficient for Indonesian households that perceive an economic hardship. Only in case of unemployment we find a significant decrease in consumption spending and educational expenditure while fertility increases. Theses results indicate that households that perceive an unemployment shock use children as a means for smoothing consumption. Regarding the death of a household member or natural disaster we find that consumption even increases. These results are consistent with the argument that coping mechanisms even over-compensate the actual consumption loss due to an economic hardship. One important lesson from our findings is that different types of income shock may lead to different economic and demographic behavioral adjustments and therefore require specific targeted social insurance programs.
    Keywords: Consumption, Insurance, Fertility and Indonesia
    Date: 2009–05
  3. By: Cahit Guven
    Abstract: Weather variables, in particular sunshine, are found to be strongly correlated with financial variables. I consider self-reported happiness as a channel through which sunshine affects financial variables. I examine the influence of happiness on risk-taking behavior by instrumenting individual happiness with regional sunshine. I find that happy people appear to be more risk-averse in financial decisions and (accordingly) choose safer investments. Happy people take more time for making decisions and have more self-control. Happy people also expect a longer life and (accordingly) seem more concerned about the future than the present and expect less inflation.
    Keywords: happiness, risk-taking, behavioral finance, weather.
    JEL: D81 G11
    Date: 2009–05–16
  4. By: Cahit Guven; Rudolph Saloumidis
    Abstract: World life expectancy has risen by around 20 years in the last 50 years. This period has also witnessed rising happiness levels around the world suggesting that happiness might be one of the causes behind the decline in mortality. We investigate the relationship between happiness and mortality using the German Socio-Economic Panel. We consider doctor visits, self-reported health, and presence of chronic illness as health measures. After controlling for initial health conditions, we find that happiness extends life expectancy. 10 percent increase in happiness decreases probability of death by four percent, and this effect is more pronounced for men and younger people. Happiness plays a more important role for chronically ill people in decreasing mortality than for those who are not chronically ill. The positive influence of happiness on mortality can offset the negative impact of chronic illness. Marriage decreases mortality and this effect appears to work through increased happiness.
    Keywords: happiness; mortality; health; chronic illness.
    JEL: I10 I12
    Date: 2009–03–13
  5. By: Cahit Guven
    Abstract: This paper presents evidence on causal influence of happiness on social capital and trust using German Socio-Economic Panel. Exploiting the unexplained cross-sectional variation in individual happiness (residuals) in 1984 to eliminate the endogeneity problem, the paper nds that happier people trust others more, and importantly, help create more social capital. Specifically, they have a higher desire to vote, perform more volunteer work, and more frequently participate in public activities. They also have a higher respect for law and order, hold more association memberships, are more attached to their neighborhood, and extend more help to others. Residual happiness appears to be an indicator of optimism, and has an inverse U-shaped relationship with social capital measures. The findings also suggest that the relationship between happiness and social capital strengthened in the world in the last decade.
    Keywords: happiness, trust, social capital, optimism.
    JEL: Z13
    Date: 2009–04–14
  6. By: Nicolò Bellanca (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Mario Biggeri (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: The aim of this paper is to enhance the capability framework by building the link between external and collective capabilities. In the first part of the paper we concentrate on human obligation and the “care relationship”. In the second we focus on external capabilities and their connection to collective capabilities. The paper then focuses on the difficulties that collective capabilities encounter during their development.
    Keywords: Disability Studies; Capability Approach, Collective action
    Date: 2009
  7. By: Mario Biggeri (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Jean-Francois Trani (Leonard Cheshire Centre, University College of London); Parul Bakhshi (University of London)
    Abstract: This paper introduces a framework based on the capability approach of Amartya Sen aiming at helping policy makers to formulate policies for disabled persons and bridging the gap between research and policy implementation. The proposed framework focuses on vulnerability in an inclusive, empowerment and dynamic perspective. It reviews the interaction between the individual and social models of disability, acknowledges human diversity, and looks at vulnerability as a multidimensional dynamic phenomenon with different types of limitations to the ‘capability’ to achieve various ‘beings and doings’ that the vulnerable person values.
    Keywords: Disability Studies; Capability Approach
    Date: 2009
  8. By: Nicolò Bellanca (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Mario Biggeri (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Francesca Marchetta (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: In this paper, we introduce a framework based on the capability approach of Amartya Sen as a base to analyse the concept of disability in a dynamic context for the disabled person. In the first part the base for equality among human beings is discussed and a critical review of disability models presented. In the following part the concept of disability is redefined throughout the capability approach. The second part of the paper introduces new concepts in the capability approach framework. The aim is to try to explain the dynamics among expectation, adaptation, and change for a disabled person in the evaluative space of capabilities.
    Keywords: Disability Studies; Capability Approach
    Date: 2009
  9. By: Richard Hauser
    Abstract: This paper concentrates on official statistics on household income, poverty, and wealth. It characterizes the main research questions in this field, and it presents an overview of the available statistics and Scientific Use Files produced by the four Research Data Centers (RDC) in Germany. (RDC of the Federal Statistical Office; RDC of the Statistical Offices of the German states; RDC of the German Labor Office; RCD of the German Pension Insurance). We support the recommendations of a peer review group for the Federal Statistical Office based on the European Statistics Code of Practice, and suggest peer reviews for all data producing bodies including ministries. We repeat a recommendation of a former Commission to find ways of distributing Scientific Use Files to reliable foreign research institutes. Special recommendations refer to the improvement of survey methods and extended questionnaires of the Income and Consumption Survey (EVS) and the German contribution to the European Statistics on Income and Living Conditions (EU SILC). We also recommend a harmonization of the administrative statistics on the various minimum benefit programs, and the development of a single Scientific Use Files for all minimum benefit recipients.
    Keywords: relevant terms to support the research via the Internet Research Data Center, Scientific Use Files, household income, wealth, minimum benefits, EVS, EU SILC.
    Date: 2009
  10. By: Ingrid Schoon
    Abstract: What are social competencies, how can they be measured, and do they remain stable over time. This contribution examines the difficulties in conceptualising and measuring social competencies at different developmental stages and in a changing social context. Existing measures and available data sources are reviewed and recommendations for future developments in data provision, data usage and access are made.
    Keywords: Social competence, social skills, social relationships and interaction
    Date: 2009
  11. By: Michael Grimm (Institute of Social Studies, Erasmus University Rotterdam, The Hague, The Netherlands); Kenneth Harttgen (Göttingen University, Germany); Stephan Klasen (Göttingen University, Germany); Mark Misselhorn (Göttingen University, Germany); Teresa Munzi (Luxembourg Income Study, Luxembourg); Timothy Smeeding (Luxembourg Income Study, Luxembourg)
    Abstract: One of the most frequent critiques of the HDI is that it does not take into account inequality within countries in its three dimensions. In this paper, we apply a simple approach to compute the three components and the overall HDI for quintiles of the income distribution. This allows comparison of the level in human development of the poor with the level of the non-poor within countries, but also across countries. This is an application of the method presented in Grimm et al. (2008) to a sample of 21 low and middle income countries and 11 industrialized countries. In particular the inclusion of the industrialized countries, which were not included in the previous work, implies to deal with a number of additional challenges, which we outline in this paper. Our results show that inequality in human development within countries is high, both in developed and industrialized countries. In fact, the HDI of the lowest quintiles in industrialized countries is often below the HDI of the richest quintile in many middle income countries. We also find, however, a strong overall negative correlation between the level of human development and inequality in human development.
    Keywords: Human Development; Income Inequality; Differential Mortality; Inequality in Education
    Date: 2009–07–15
  12. By: Kenneth Hartgen (University of Göttingen); Stephan Klasen (University of Göttingen); Mark Misselhorn (University of Göttingen)
    Abstract: Spurred by international commitments and expanded funding at the national and international level, attendance in education and associated years of schooling have expanded substantially in developing countries in recent years. But has this expansion in enrolments reduced existing inequalities in educational access and achievements? This paper analyzes differences in improvements in the access to the education system and in educational outcomes across the welfare distribution between and within countries, and also by gender and regions for a sample of 37 developing countries using Demographic and Health Surveys (DHS). For the analysis, the toolbox of pro-poor growth analysis is applied to several educational indicators. We find drastic inequalities in educational attendance across the income distribution. Interestingly, inequalities in attendance declines with rising average attendance, while inequality in completion rates or schooling years increases with rising completion rates or schooling years. We find great heterogeneity in the distribution of progress of education, with very little pro-poor progress in educational achievement indicators. Also, progress appears to be less pro-poor in countries with low initial educational achievement and high overall educational progress. We find no correlation between pro-poor progress and free education policies or initial inequality in education. At the regional level, educational progress was generally more pro-poor in Asia and Latin America, while in Africa the experience is very heterogeneous. While gender inequality has decreased slightly, large differences by region tend to persist over time.
    Keywords: education; human capital; inequality; pro-poor growth
    JEL: I20 I29 I31 I32
    Date: 2009–07–15

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