nep-hap New Economics Papers
on Economics of Happiness
Issue of 2009‒10‒03
nine papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Children, happiness and taxation By Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
  2. The Sources of Happiness: Evidence from the Investment Game By Leonardo Becchetti; Giacomo degli Antoni
  3. Measuring child labor: Comparisons between hours data and subjective measures By Dillon, Andrew
  4. Measuring subjective wellbeing in Bangaladesh, Ethiopia, Peru and Thailand using a personal life goal satisfaction approach By Copestake, James; Camfield, L
  5. Schoolchildren's wellbeing and life prospects: Justifying the universal tax on childhood By Thin, Neil
  6. Analyzing Wellbeing: A Framework for Development Practice By White, Sarah C
  7. The Capability Approach and the Politics of a Social Conception of Wellbeing By Deneulin, Severine; McGregor, James A
  8. Income, happiness, and the disutility of labor By Knabe, Andreas; Rätzel, Steffen
  9. Dissatisfied with life, but having a good day: time-use and well-being of the unemployed By Knabe, Andreas; Rätzel, Steffen; Schöb, Ronnie; Weimann, Joachim

  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: Empirical analyses on the determinants of life satisfaction often include the impact of the number of children variable among available controls without fully discriminating between the two (socio- relational and pecuniary) components. In our empirical analysis on the German Socioeconomic Panel we show that, when introducing household income without correction for the number of members, the pecuniary effect prevails and the sign is negative while, when we equivalise income with the most commonly adopted equivalence scales, the non pecuniary (socio-relational) effect emerges and the impact of the variable is positive and significant above a minimal scale elasticity threshold. We further reject slope homogeneity and show that the positive relational effect is stronger for males, below median income households and East Germans. We interpret these subsample split results as driven by heterogeneous opportunity costs. Our empirical results give rise to a paradox: why people have children if the aggregate effect on life satisfaction is negative? We provide in the paper some interpretations consistent with our findings. Some of them are based on motivational complexity. This implies that demographic policies and the paradox are strictly connected. Effectiveness of tax/subsidies impacting on fertility crucially depends on whether the children paradox may be solved within the self-interested rationality paradigm.
    Keywords: equivalised income, scale elasticities, life satisfaction
    JEL: A13 D61 D10 J17
    Date: 2009–09
  2. By: Leonardo Becchetti (University of Rome Tor Vergata); Giacomo degli Antoni (University of Milan - Bicocca)
    Abstract: The present paper draws on data collected in an investment game plus a questionnaire to investigate whether happiness is affected by circumstances and/or outcomes of the game and to evaluate which motivations or preference structures (self-interested preferences, inequity aversion, altruism, warm glow, social-welfare preferences, trust or reciprocity) may explain such effect. Our result shows that the amount sent has significant and positive effect on trustors’ self-declared happiness. We interpret this finding by arguing that the happiness effect can be explained by the enactment of the “generating” (social welfare enhancing) power of the trustor’s decision. Characteristics of the investment game are such that the trustor has a value creating while the trustee only a redistributive power. This difference may explain why only trustors and not trustees are significantly and positively affected by their giving decision.
    Keywords: Happiness, Investment Game, Social-welfare Preferences
    JEL: C91 D63 A13
    Date: 2009–09
  3. By: Dillon, Andrew
    Abstract: "This paper examines a subjective measure of child labor as an alternative to hours data for eliciting the distribution of children's time between work, school, and leisure. The subjective child labor questions that were developed have two primary advantages. First, the subjective measures avoid proxy respondent bias in child labor reports made by parents in a standard hours module. Second, the subjective child labor module scales responses to elicit the relative distribution of the shares of children's time without relying on hours data which are prone to severe outlier problems. Adult, proxy respondents are found to produce uniformly lower reports of children's time allocated to work and school than the child's own subjective responses. Conditional labor supply functions are also estimated to examine the marginal effects of child, parent, household and school characteristics between the two types of data. Children's subjective responses are found to increase the magnitude of the marginal effects for child's age, parental education, and school availability with limited differences between household composition and asset variables." from authors' abstract
    Keywords: Child labor, Questionnaire design, Development strategies, Childcare and work, Gender,
    Date: 2009
  4. By: Copestake, James; Camfield, L
    Abstract: The paper sets out an approach to assessing people's wellbeing that focuses on their perceived attainment of life goals. Section 1 explains the motivation for seeking new ways of measuring subjective wellbeing in developing countries. Section 2 briefly reviews relevant literature and process of designing the data collection instrument (referred to as the WeDQoL). Sections 3 and 4 present illustrative empirical findings from its use in Bangladesh, Ethiopia, Peru and Thailand. Section 5 concludes that much scope remains for developing new tools, like the WeDQoL, usefully to inform public policy in developing countries.
    Date: 2009–02
  5. By: Thin, Neil
    Abstract: A comprehensive and child-focused 'wellbeing' approach to schooling is compared here with other approaches that emphasise poverty reduction, human rights, or capabilities, and which fall short of recognising the full range of wellbeing effects of school. Schooling is expected to optimise prospects for good lives and good societies, not just minimise ill-being and social injustice and fulfil the right to education. A capability approach takes wellbeing much more seriously, yet still falls short of recognizing the role of schools in facilitating directly the happiness of pupils. It is imperative that affordable and simple methods are developed to assess and analyse links between schooling and children's wellbeing and life prospects. Expanding on the WeD approach, a fourfold analytical framework is recommended here for exploring this theme by looking at resources, motivations, achievements, and meaning, plus minimizing avoidable harm.
    Date: 2009–02
  6. By: White, Sarah C
    Abstract: This paper is a peice of advoacy for the use of wellbeing analysis in social and development policy and practice, drawing on the work of the Wellbeing in Developing Countries Research Group (WeD) at the University of Bath, UK. The paper offers a simple definition of wellbing, and then explores the three basic dimensions that this comprises. It notes some potential hazards in taking wellbeing as focus, and concludes by considering what difference a focus on wellbeing could make to social and development practice.
    Keywords: Wellbeing; Framework; International Development
    JEL: H1
    Date: 2009–02
  7. By: Deneulin, Severine; McGregor, James A
    Abstract: The paper discusses the potential and pitfalls of Sen's capability approach. It discusses areas where the capability approach has made a significant contribution to the social sciences. However, the paper argues that the approach fails to thke into account the social construction of meaning. It is these social meanings which gives us a basis from which we know what we value and judge how satisfied we feel about what we are able to achieve. From this viewpoint a person's state of wellbeing (or illbeing) is socially and psychologically co-constituted in specific social and cultural contexts. This entrails that the reality of trade-offs between competing conceptions of wellbeing has to be confronted, and that therefore such social conception of wellbeing is also profoundly political.
    Keywords: capability approach; social wellbeing; reasoning; conflict
    JEL: H1
    Date: 2009–02
  8. By: Knabe, Andreas; Rätzel, Steffen
    Abstract: We reexamine the claim that the effect of income on subjective well-being suffers from a systematic downward bias if one ignores that higher income is typically associated with more work effort. We analyze this claim using German panel data, controlling for individual unobserved heterogeneity, and specifying the impact of working hours in a non-monotonic form. Our results suggest that the impact of working hours on happiness is rather small and exhibits an inverse U-shape. We do not find evidence that leaving working hours out of the analysis leads to an underestimation of the income effect.
    Keywords: Happiness,life satisfaction,income,disutility of labor
    JEL: D60 I31
    Date: 2009
  9. By: Knabe, Andreas; Rätzel, Steffen; Schöb, Ronnie; Weimann, Joachim
    Abstract: We apply the Day Reconstruction Method to compare unemployed and employed people with respect to their subjective assessment of emotional affects, differences in the composition and duration of activities during the course of a day, and their self-reported life satisfaction. Employed persons are more satisfied with their life than the unemployed and report more positive feelings when engaged in similar activities. Weighting these activities with their duration shows, however, that average experienced utility does not differ between the two groups. Although the unemployed feel sadder when engaged in similar activities, they can compensate this by using the time the employed are at work in more enjoyable ways. Our finding that unemployment affects life satisfaction and experienced utility differently may be explained by the fact that people do not adjust their aspirations when becoming unemployed but face hedonic adaptation to changing life circumstances, triggered by the opportunity to use the time in a way that yields higher levels of satisfaction than working.
    Keywords: Unemployment,happiness,life satisfaction,Day Reconstruction Method,experienced utility
    JEL: I31 J60 J22
    Date: 2009

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