New Economics Papers
on Economics of Happiness
Issue of 2009‒12‒11
eleven papers chosen by

  1. A note on the relationship between television viewing and individual happiness By Mitesh Kataria; Tobias Regner
  2. Well-being across America By Oswald, Andrew J.; Wu, Stephen
  3. Happiness, Ideology and Crime in Argentine Cities By Rafael di Tella; Ernesto Schargrodsky
  4. You Can’t Be Happier than Your Wife: Happiness Gaps and Divorce By Guven, Cahit; Senik, Claudia; Stichnoth, Holger
  5. Population and Health Policies By Schultz, Paul
  6. Economics, Area Studies and Human Development By Ranis, Gustav
  7. The relationship between health and growth:when Lucas meets Nelson-Phelps By Philippe Aghion; Peter Howitt; Fabrice Murtin
  8. Employment and Inequality of Outcomes in Brazil By Menezes, Naercio Filho; Scorzafave, Luiz
  9. Human Capital and Regional Wage Gaps. By Enrique López-Bazo; Elisabet Motellón
  10. Social Security Literacy and Retirement Well-Being By Hugo Benítez-Silva; Berna Demiralp; Zhen Liu
  11. Inequality, Human Capital and Development: Making the Theory Face the Facts By Papageorgiou, Chris; Razak, Nor Azam Abdul

  1. By: Mitesh Kataria (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Tobias Regner (Max Planck Institute of Economics, Strategic Interaction Group, Jena)
    Abstract: In a recently published article, Bruni and Stanca (2008) suggest that television viewing has a negative impact on life satisfaction. In this note we argue that the empirical approach they use (an approach that omits the main effect of TV viewing in life satisfaction) is problematic. We estimate a microeconomic life satisfaction function and find mixed support for the claim that television viewing in general has a negative impact on individual happiness. Using a large cross-country comparison we find that there is a substantial heterogeneity across countries, which needs to be taken into account when concluding about television's effect on life satisfaction.
    Keywords: Relational goods, Subjective well-being, TV consumption, Happiness
    JEL: A12 D12 I31
    Date: 2009–12–02
  2. By: Oswald, Andrew J. (University of Warwick); Wu, Stephen (Hamilton College)
    Abstract: This paper uses new Behavioral Risk Factor Surveillance System data to provide the first estimates of well-being across the states of America. From this sample of 1.3 million US citizens, we analyze measures of life satisfaction and mental health. Adjusting for people's characteristics, states such as Louisiana and DC have high psychological well-being levels while California and West Virginia have low well-being; there is no correlation between states' well-being and their GDP per capita. Correcting for people's incomes, satisfaction with life is lowest in the rich states. We discuss implications for the arbitrage theory that regions provide equal utility and compensating differentials.
    Keywords: compensating differentials, BRFSS, happiness, geography, GHQ, Easterlin Paradox, mental health, depression, life course
    JEL: D1 I3
    Date: 2009–11
  3. By: Rafael di Tella; Ernesto Schargrodsky
    Abstract: This paper uses self-reported data on victimization, subjective well being and ideology for a panel of individuals living in six Argentine cities. While no relationship is found between happiness and victimization experiences, a correlation is documented, however, between victimization experience and changes in ideological positions. Specifically, individuals who are the victims of crime are subsequently more likely than non-victims to state that inequality is high in Argentina and that the appropriate measure to reduce crime is to become less punitive (demanding lower penalties for the same crime).
    Keywords: Happiness, crime, beliefs
    JEL: I31 K42 R29
    Date: 2009–11
  4. By: Guven, Cahit (Deakin University); Senik, Claudia (University Paris-Sorbonne, PSE); Stichnoth, Holger (ZEW Mannheim)
    Abstract: This paper asks whether the gap in subjective happiness between spouses matters per se, i.e. whether it predicts divorce. We use three panel databases to explore this question. Controlling for the level of life satisfaction of spouses, we find that a higher satisfaction gap, even in the first year of marriage, increases the likelihood of a future separation. We interpret this as the effect of comparisons of well-being between spouses, i.e. aversion to unequal sharing of well-being inside couples. To our knowledge, this effect has never been taken into account by existing economic models of the household. The relation between happiness gaps and divorce may be due to the fact that couples which are unable to transfer utility are more at risk than others. It may also be the case that assortative mating in terms of happiness baseline-level reduces the risk of separation. However, we show that assortative mating is not the end of the story. First, our results hold in fixed-effects estimates that take away the effect of the initial quality of the match between spouses: fixed-effects estimates suggest that a widening of the happiness gap over time raises the risk of separation. Second, we uncover an asymmetry in the effect of happiness gaps: couples are more likely to break-up when the difference in life satisfaction is unfavourable to the wife. The information available in the Australian survey reveals that divorces are indeed predominantly initiated by women, and importantly, by women who are unhappier than their husband. Hence, happiness gaps seem to matter to spouses, not only because they reflect a mismatch in terms of baseline happiness, but because they matter as such.
    Keywords: divorce, happiness, comparisons, panel, households, marriage
    JEL: J12 D13 D63 D64 H31 I31 Z13
    Date: 2009–11
  5. By: Schultz, Paul (Yale University)
    Abstract: The program evaluation literature for population and health policies is in flux, with many disciplines documenting biological and behavioral linkages from fetal development to late life mortality, chronic disease, and disability, though their implications for policy remain uncertain. Both macro and micro economics seek to understand and incorporate connections between economic development and the demographic transition. The focus here is on research methods, findings, and questions that economists can clarify regarding the causal relationships between economic development, health outcomes, and reproductive behavior, which operate in many directions, posing problems for identifying causal pathways. The connection between conditions under which people live and their expected lifespan and health status refers to "health production functions". The relationships between an individual's stock of health and productivity, well being, and duration of life encompasses the "returns to health human capital". The control of reproduction improves directly the well being of women, and the economic opportunities of her offspring. The choice of population policies may be country specific and conditional on institutional setting, even though many advances in biomedical and public health knowledge, including modern methods of birth control, are now widely available. Evaluation of a policy intervention in terms of cost-effectiveness is typically more than a question of technological efficiency, but also the motivation for adoption, and the behavioral responsiveness to the intervention of individuals, families, networks, and communities. Well-specified research strategies are required to address (1) the economic production of health capacities from conception to old age, (2) the wage returns to increasing health status attributable to policy interventions, (3) the conditions affecting fertility, family time allocation, and human capital investments, and (4) the consequences for women and their families of policies which change the timing as well as number of births.
    JEL: D13 I18 J13 O12
    Date: 2009–07
  6. By: Ranis, Gustav (Yale University)
    Abstract: This paper suggests that area studies and economics have a better chance to be married successfully if we shift our attention from the exclusive emphasis on economic growth towards improvements in human development, especially the much broadened version of that concept. Different areas are shown to differ substantially in terms of the choices they make among the various independent dimensions of well-being and the various indicators within each dimension. The particular characteristics of each area play an important role in determining the choices societies make and the extent to which they are constrained by their initial conditions.
    JEL: O10 O20 O50
    Date: 2009–07
  7. By: Philippe Aghion (Harvard University); Peter Howitt (Brown University); Fabrice Murtin (OECD)
    Date: 2009–11
  8. By: Menezes, Naercio Filho; Scorzafave, Luiz
    Date: 2009–10
  9. By: Enrique López-Bazo (Faculty of Economics, University of Barcelona); Elisabet Motellón (Faculty of Economics, University of Barcelona)
    Abstract: This paper uses micro-level data to analyse the effect of human capital on regional wage differentials. The results for the set of Spanish regions confirm that they differ in the endowment of human capital, but also that the return that individuals obtain from it varies sharply across regions. Regional heterogeneity in returns is especially intense in the case of education, particularly when considering its effect on the employability of individuals. These differences in endowment and, especially, in returns to human capital, account for a significant proportion of regional wage gaps.
    Keywords: Education, Experience, Regional disparities, Returns to human capital, Wage gap decomposition.
    Date: 2009–11
  10. By: Hugo Benítez-Silva (SUNY-Stony Brook); Berna Demiralp (Old Dominion University); Zhen Liu (University at Buffalo)
    Abstract: We build upon the growing literature on financial literacy, which studies the prevalence of lack of knowledge about various financial issues, and analyze how much people know about the Social Security rules using a small pilot survey conducted in 2007, and a follow-up and extended survey funded by MRRC conducted in December of 2008. We then assess the consequences of the apparent prevalence of lack of information by individuals about the rules governing the Social Security system using a realistic and empirically-based life-cycle model of retirement behavior under uncertainty. We investigate the individual’s retirement and savings decisions under incomplete information and unawareness, in which a portion of the population does not know some or all of the rules of the system. We compare the outcomes in these cases to the outcome under full information, computing the welfare gain resulting from the acquisition of information regarding the Social Security system. Our analysis can illuminate the need for policies that foster knowledge of the system, which can improve welfare, and can result in better policy outcomes.
    Date: 2009–09
  11. By: Papageorgiou, Chris; Razak, Nor Azam Abdul
    Abstract: Recent theoretical contributions assert that income inequality impacts negatively human capital accumulation, and consequently long-run growth. Galor and Zeira (1993) show that such a relationship works primarily through financial constraints, while de la Croix and Doepke (2003) demonstrate that the relationship could also work via differential fertility between poor and rich. In this paper, we first test the inequality-human capital-output hypothesis in a sample of 46 countries for the period 1970—2000. In the baseline estimation specification and various robustness checks, we obtain results that lend strong support to this relationship. Second, we examine which of the two mechanisms, finds more support in the data. and show evidence in favor of the differential fertility mechanism.
    Keywords: Income inequality; financial constraints; fertility differentials; human capital; economic growth
    JEL: O11 O15 O40
    Date: 2009–11–30

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