nep-hap New Economics Papers
on Economics of Happiness
Issue of 2009‒09‒26
fifteen papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Reversing the Question: Does Happiness Affect Consumption and Savings Behavior? By Cahit Guven
  2. Weather and Financial Risk-Taking: Is Happiness the Channel? By Cahit Guven
  3. Market Labor, Household Work and Schooling in South Africa: Modeling the Effects of Trade on Adults' and Children's Time Allocation By Lulit Mitik; Bernard Decaluwé
  4. Estimating gender differences in access to jobs: females trapped at the bottom of the ladder By Laurent Gobillon; Dominique Meurs; Sébastien Roux
  5. Economic Policy for Sustainable Growth and Development vs. Greedy Growth and Preservationism By Majah-Leah Ravago; James Roumasset;
  6. Reconciling Work and Family Life: Workplaces, Occupation and the Experience of Work-Life Conflict By Calvert, Emma; Russell, Helen; O'Connell, Philip J.; McGinnity, Frances
  7. Chronic Poverty and Development Policy in Sri Lanka: Overview Study By Indra Tudawe
  8. Human Rights as a Tool for Sustainable Development By Manuel Couret Branco; Pedro Damião Henriques
  10. SUBJECTIVE WELL-BEING OF CHINA'S OFF-FARM MIGRANTS By Russell Smyth; Ingrid Nielsen; Qingguo Zhai
  11. SUBJECTIVE WELL-BEING OF BEIJING TAXI DRIVERS By Ingrid Nielsen; Olga Paritski; Russell Smyth
  12. ENVIRONMENTAL SURROUNDINGS AND PERSONAL WELL-BEING IN URBAN CHINA By Russell Smyth; Ingrid Nielsen; Qingguo Zhai; Tiemin Liu; Yin Liu; Chunyong Tang; Zhihong Wang; Zuxiang Wang; Juyong Zhang
  13. PERSONAL WELL-BEING IN URBAN CHINA By Russell Smyth; Ingrid Nielsen; Qingguo Zhai
  14. Income and Poverty in a Developing Economy By Amit K Chattopadhyay; Graeme J Ackland; Sushanta K Mallick
  15. Women's Rights and Development By Raquel Fernández

  1. By: Cahit Guven
    Abstract: I examine the impact of happiness on consumption and savings behavior using data from the DNB Household Survey from the Netherlands and the German Socio-Economic Panel. Instrumenting individual happiness with regional sunshine, the results suggest that happier people save more, spend less, and have a lower marginal propensity to consume. Happier people take more time for making decisions and have more control over expenditures; they expect a longer life and (accordingly) seem more concerned about the future than the present; they also expect less inflation in the future.
    Keywords: happiness, savings, consumption, weather
    JEL: D12 Q54
    Date: 2009
  2. By: Cahit Guven
    Abstract: Weather variables, and sunshine in particular, 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, and 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 to live longer and accordingly seem more concerned about the future than the present, and expect less inflation.
    Keywords: happiness, risk-taking, climate
    JEL: D01 D91 G11
    Date: 2009
  3. By: Lulit Mitik; Bernard Decaluwé
    Abstract: This paper analyzes how economic policies can influence parents’ decisions about their children’s schooling, household work and leisure in South Africa. Using a dynamic computable general equilibrium model that integrates both market and non-market activities, distinguishing male and female workers on the one hand, and adult and child non-market work and leisure on the other, we find that, in the context of trade liberalization, gender inequality is likely to rise between adults and between boys and girls. Furthermore, the paper notes that the increase in adult male and female market labor supply is made possible through the substitution of children for parents in household work, although more so in some groups than others. These effects sustain in the long run.
    Keywords: Household work, market work, child schooling, gender, time-use, trade, CGE model, South Africa
    JEL: C68 D13 F16 J13 J16 J22
    Date: 2009
  4. By: Laurent Gobillon; Dominique Meurs; Sébastien Roux
    Abstract: In this paper, we propose a job assignment model allowing for a gender difference in access to jobs. Males and females compete for the same job positions. They are primarily interested in the best-paid jobs. A structural relationship of the model can be used to empirically recover the probability ratio of females and males getting a given job position. As this ratio is allowed to vary with the rank of jobs in the wage distribution of positions, barriers in females' access to high-paid jobs can be detected and quantiffed. We estimate the gender relative probability of getting any given job position for full-time executives aged 40-45 in the private sector. This is done using an exhaustive French administrative dataset on wage bills. Our results show that the access to any job position is lower for females than for males. Also, females' access decreases with the rank of job positions in the wage distribution, which is consistent with females being faced with more barriers to high-paid jobs than to low-paid jobs. At the bottom of the wage distribution, the probability of females getting a job is 12% lower than the probability of males. The difference in probability is far larger at the top of the wage distribution and climbs to 50%.
    Date: 2009
  5. By: Majah-Leah Ravago (Department of Economics, University of Hawaii at Manoa; East-West Center); James Roumasset (Department of Economics, University of Hawaii at Manoa; University of Hawaii Economic Research Organization); (School of Economics, University of the Philippines)
    Abstract: Sustainability science emerged from the felt need to employ appropriate science and technology in the pursuit of sustainable development. Despite its inertia and avowed purpose of being practical and feasible, however, sustainability science has yet to embrace the policy sciences. In pursuit of this objective, we first trace the history of thought of sustainable development, including its definition and operationalization. Sustainable development encompasses sustainable growth and dynamically efficient development patterns. Two promising approaches to sustainable growth are contrasted. Negative sustainability counsels policy makers to offset any decrease in natural capital with at least the same value of net investment in produced capital. This sustainability criterion neither prescribes how and how much to conserve natural capital nor how much to build up human and productive capital. To fill the void, we offer positive sustainability, which maximizes intertemporal welfare while incorporating interlinkages within the total environomy, dynamic efficiency, and intertemporal equity. In addition, sustainable development must include the lessons from traditional development studies, including how optimal patterns of production, consumption, and trade change with standards of living. However, like Tolstoy’s unhappy families, there are many pathways to unsustainable development. We describe two broad causes of unsustainable growth – rent-seeking and preservationism. We also illustrate patterns of unsustainable development by drawing on lessons from the Philippines. While specialization is the engine of growth, fragmentation is the anchor. We show how policy and governance driven by rent-seeking promote economic stagnation. Low economic growth in turn exacerbates population pressure and environmental degradation – the vicious circle of unsustainable development. We give particular attention to how a resource curse can exacerbate policy distortions and rent-seeking and how the same phenomenon can be promulgated by foreign aid, foreign direct investments, remittances and tourism. For sustainable development not to be at odds with policy science, positive sustainability must be combined with projects and policies that promote dynamic comparative advantage and poverty reduction. We emphasize the facilitative role of government and what it can do to transform the vicious circle into a virtuous circle.
    Keywords: Sustainable development and patterns, positive sustainability, specialization, the Philippines
    JEL: Q01 Q33 Q56
    Date: 2009–09–09
  6. By: Calvert, Emma (Economic and Social Research Institute (ESRI)); Russell, Helen (Economic and Social Research Institute (ESRI)); O'Connell, Philip J. (Economic and Social Research Institute (ESRI)); McGinnity, Frances (Economic and Social Research Institute (ESRI))
    Date: 2009–09
  7. By: Indra Tudawe
    Abstract: The present study attempts to capture chronic poverty in Sri Lanka by examining general information on poverty and drawing conclusions on those who are likely to be among the chronic poor. Certain population groups that are likely to experience poverty over many years (or all their lives) are examined in this review. These include the internally displaced persons from the conflict, disabled, elderly, street children, employed children, female headed households and youth. Further, the poor are examined within the ‘livelihood’ framework in terms of their command over human, physical, natural, financial, social and political capital. [CPRC Working Paper No 9]
    Keywords: chronic, ETHNICITY, infrastructure, human, street children, female headed households, youth, livelihood, Sri Lanka, poverty, chronic poor, population, disabled, elderly, physical, natural, financial, social, political,
    Date: 2009
  8. By: Manuel Couret Branco (Universidade de Evora, Departamento de Economia, CEFAGE-UE); Pedro Damião Henriques (Universidade de Evora, Departamento de Economia, CEFAGE-UE)
    Abstract: In poor as much as in rich countries there is a fear that environmentally sustainable development might be contradictory to development in general and equitable development in particular. There could be indeed a contradiction between environmental and social sustainability, too much care for the environment eventually leading to forgetting about the people. The purpose of this paper is to explore institutional principles and tools that allow the conciliation between environmental and social sustainability. In this respect we will present human rights based political economy as an institutional tool of this sort. We will show how a human-rights based political economy could at the same time respect ecological sustainability and social equity. One of the reasons for that consists in the fact that within a human-rights based political economy, welfare is not the result of economic growth, as within traditional political economy, but of justice. The main objectives of development will be attained, therefore, not through growth but through redistribution of resources or of access to resources. In this paper more specific aspects will be presented by examining the human right to work and the human right to water. Regarding the human right to work the main aspect which will be stressed is that within a human rights frame full employment becomes disconnected from both growth and labour market deregulation. It will be shown that traditional policies not only do not solve unemployment but are also not environmentally and socially sustainable. The only policy that is not contradictory with either human rights and de-growth is work sharing by decreasing the length of the work day. When properly enforced this policy has, indeed, historically shown to be the only one that has created jobs. Regarding the right to water, the point is that democratic and human rights oriented exploitation and distribution policies of water are both more sustainable and more equitable than those that intend to transform water into a private good as any other and, thus, promote commodification and privatisation of resources. This way of controlling water exploitation and distribution not only may relieve pressure from the resource but also alleviate deprivation of poorer families, conciliating, therefore, environmental and social sustainability.
    Date: 2009
  9. By: Wenshu Gao; Russell Smyth
    Abstract: We use two datasets for urban China to examine whether an increase in reference group income lowers or increases job satisfaction. The former is consistent with a status effect ??? an increase in the income of others lowers my satisfaction because I feel jealous. The latter is consistent with a signal effect ??? an increase in the income of others might make me jealous, but it also provides an information signal about my future prospects. When we use a single item indicator of job satisfaction we find no support for a status or signal effect; however, when we use a psychometrically valid instrument to measure job satisfaction, we find some support for the existence of a status effect. We consider the components of job satisfaction through which the status effect operates. We find that the status effect operates through satisfaction with co-workers, operating procedures, pay and supervision.
    Keywords: Job satisfaction, Relative income, Urban China.
    JEL: I31 J28
    Date: 2009–07–01
  10. By: Russell Smyth; Ingrid Nielsen; Qingguo Zhai
    Abstract: Existing research applying the Personal Wellbeing Index (PWI) in China is restricted to urban and rural samples. There are no studies for Chinese off-farm migrants. The specific aims of this study are (a) ascertain whether Chinese off-farm are satisfied with their lives; (b) investigate the equivalence of the PWI in terms of its psychometric properties; and (c) examine whether the responses to the PWI from participants falls within the narrow range predicted by the 'Theory of Subjective Wellbeing Homeostasis???. The PWI demonstrated good psychometric performance in terms of its reliability, validity and sensibility and was consistent with previous studies for Western and non-Western samples. The data revealed a moderate level of subjective well-being (PWI score = 62.6). While Chinese off-farm migrants lead hard lives, the PWI was within the normative range predicted for Chinese societies by the 'Theory of Subjective Wellbeing Homeostasis'. A likely explanation for this finding rests with the circular nature of migration in China. When China's offfarm migrants find it too difficult to cope in the cities, most have the fallback position that they can return to their homes in the countryside. This option provides an external buffer to minimize the inherent challenges of life which would otherwise impinge on the life satisfaction of China's off-farm migrants.
    Keywords: China, Personal Wellbeing Index, Subjective Wellbeing
    Date: 2009–02–02
  11. By: Ingrid Nielsen; Olga Paritski; Russell Smyth
    Abstract: This study investigates subjective well-being among a sample of Beijing taxi drivers in the lead up to the 2008 Beijing Olympic Games using the Personal Wellbeing Index (PWI). The specific aims of this study are (a) ascertain whether Beijing taxi drivers are satisfied with their lives; (b) investigate the psychometric properties of the PWI in this unique population; and (c) examine whether the responses to the PWI from participants falls within the narrow range predicted by the ???Theory of Subjective Wellbeing Homeostasis???. The PWI demonstrated good psychometric properties and was consistent with previous studies for Western and non-Western samples. The data revealed a moderate level of subjective well-being (PWI score = 61.1). While Beijing taxi drivers work long hours for low wages, the PWI was nonetheless within the normative range predicted for Chinese societies by the ???Theory of Subjective Wellbeing Homeostasis???. The results suggest that the homeostatic mechanism is fairly resilient, even when the individual leads a hard life based on objective indicators. For Beijing taxi drivers, it may be that personal relationships and feeling part of the community acts as an important buffer for the homeostatic system.
    Keywords: China, Personal Wellbeing Index, Subjective Wellbeing
    Date: 2009–03–01
  12. By: Russell Smyth; Ingrid Nielsen; Qingguo Zhai; Tiemin Liu; Yin Liu; Chunyong Tang; Zhihong Wang; Zuxiang Wang; Juyong Zhang
    Abstract: We examine the relationship between atmospheric pollution, water pollution, traffic congestion, access to parkland and personal well-being using a survey administered across six Chinese cities in 2007. In contrast to existing studies of the determinants of well-being by economists, which have typically employed single item indicators to measure well-being, we use the Personal Well-Being Index (PWI). We also employ the Job Satisfaction Survey (JSS) to measure job satisfaction, which is one of the variables for which we control when examining the relationship between environmental surroundings and personal well-being. Previous research by psychologists has shown the PWI and JSS to have good psychometric properties in western and Chinese samples. A robust finding is that in cities with higher levels of atmospheric pollution and traffic congestion, respondents report lower levels of personal well-being ceteris paribus. Specifically, we find that a one standard deviation increase in suspended particles or sulphur dioxide emissions is roughly equivalent to a 12-13 per cent reduction in average monthly income in the six cities.
    Keywords: China, Environment, Pollution, Personal Well-Being.
    JEL: A13 D60
    Date: 2009–06–02
  13. By: Russell Smyth; Ingrid Nielsen; Qingguo Zhai
    Abstract: This paper reports the findings of a survey administering the Personal Well-Being Index in six Chinese cities (N=3390) to ascertain the personal well-being of China's urban population.The specific aims of the study were: (a) ascertain whether Chinese urban residents are satisfied with their lives; (b) validate the PWI using an urban sample that is representative of the urban population and larger in size than that which has been utilized in existing studies for Mainland China; (c) compare the results to existing studies for Hong Kong, Macau, rural China and single city studies which have administered the PWI in Guangdong and Shandong; (d) examine whether the responses to the PWI from participants falls within the narrow range predicted by the ???Theory of Subjective Wellbeing Homeostasis??? and provide further evidence on whether this framework is applicable to Chinese samples; and (e) examine which participant characteristics predict personal well-being, examine whether own income and/or relative income predicts personal well-being and compare these results with previous studies for China and other countries. The data indicated a moderate level of personal well-being (PWI score = 67.1). The PWI demonstrated good psychometric performance in terms of its reliability, validity and sensitivity, consistent with previous published studies. The PWI was within the normative range for non-Western countries and was within the narrow band predicted by the ???Theory of Subjective Wellbeing Homeostasis???. Similar variables were found to predict personal well-being to those found in previous studies for China and elsewhere.
    Keywords: China, Personal Wellbeing Index, Subjective Wellbeing
    Date: 2009–02–01
  14. By: Amit K Chattopadhyay; Graeme J Ackland; Sushanta K Mallick
    Abstract: We present a stochastic agent-based model for the distribution of personal incomes in a developing economy. We start with the assumption that incomes are determined both by individual labour and by stochastic effects of trading and investment. The income from personal effort alone is distributed about a mean, while the income from trade, which may be positive or negative, is proportional to the trader's income. These assumptions lead to a Langevin model with multiplicative noise, from which we derive a Fokker-Planck (FP) equation for the income probability density function (IPDF) and its variation in time. We find that high earners have a power-law income distribution while the low income groups have a Levy IPDF. Comparing our analysis with the Indian survey data (obtained from the world bank website) taken over many years we obtain a near-perfect data collapse onto our model's equilibrium IPDF. The theory quantifies the economic notion of ``given other things''. Using survey data to relate the IPDF to actual food consumption we define a poverty index, which is consistent with traditional indices, but independent of an arbitrarily chosen ``poverty line'' and therefore less susceptible to manipulation.
    Date: 2009–05
  15. By: Raquel Fernández
    Abstract: Why has the expansion of women's economic and political rights coincided with economic development? This paper investigates this question, focusing on a key economic right for women: property rights. The basic hypothesis is that the process of development (i.e., capital accumulation and declining fertility) exacerbated the tension in men's conflicting interests as husbands versus fathers, ultimately resolving them in favor of the latter. As husbands, men stood to gain from their privileged position in a patriarchal world whereas, as fathers, they were hurt by a system that afforded few rights to their daughters. The model predicts that declining fertility would hasten reform of women's property rights whereas legal systems that were initially more favorable to women would delay them. The theoretical relationship between capital and the relative attractiveness of reform is non-monotonic but growth inevitably leads to reform. I explore the empirical validity of the theoretical predictions by using cross-state variation in the US in the timing of married women obtaining property and earning rights between 1850 and 1920.
    JEL: J12 J16 N31 O15 O16
    Date: 2009–09

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