nep-hap New Economics Papers
on Economics of Happiness
Issue of 2010‒05‒29
six papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Time Packages and Their Effect on Life Satisfaction By Marina Della Giusta; Zella King
  2. Anything to Keep You Happy? By Marina Della Giusta; Sarah Jewell; Uma Kambhampati
  3. Marital Status is Misunderstood in Happiness Models By Bruce Chapman; Cahit Guven
  4. Does providing childcare to unemployed affect unemployment duration? By Vikman, Ulrika
  5. Sports Participation and Happiness: Evidence from U.S. Micro Data By Huang, Haifang; Humphreys, Brad
  6. Social Relationships and Trust By Christine Binzel; Dietmar Fehr

  1. By: Marina Della Giusta (School of Economics, University of Reading); Zella King (School of Management, University of Reading)
    Abstract: The expected response of individuals to policy changes usually requires that they use their resources in a different way, according to the changed relative opportunity cost of undertaking each that the policy effects. However, it has often been noted that the allocation of time to different activities does not respond smoothly, and rather appears to be influenced by a range of non economic factors that lead to opportunity costs and trade-offs being different for different individuals, depending not just on the constraints they face, but also on the activities they are already ‘specialised’ at. In this paper we use the British Household Panel Survey to examine how time packages - the allocation of weekly hours to a combination of paid and unpaid work and leisure - affect life satisfaction, and the marginal returns from additional hours spent in paid work, overtime, caring and housework. We observe that for men in general, the marginal benefits of an additional hour of paid work, or extra work (in the form of overtime or a second job) are positive, while an additional hour of caring has a negative effect on life satisfaction. For men who are leisure rich, however, the marginal benefits of an additional hour of housework are positive. Leisure rich men appear to gain satisfaction from doing housework, in a way that other men do not. The same applies to women. Women are in general less satisfied by taking on overtime or second jobs, presumably preferring to use that discretionary time at home in leisure pursuits or with children. For women doing full-time paid work, the marginal effect of an additional hour of extra work (overtime or a second job) is negative; for women already stretched by full-time paid work, extra hours are an unwelcome burden. We discuss the role that different kinds of constraints, including gender attitudes, play in determining our results and the implications for policy design.
    Keywords: happiness, time use
    JEL: D13 I31
    Date: 2010–05–08
  2. By: Marina Della Giusta (School of Economics, University of Reading); Sarah Jewell (School of Economics, University of Reading); Uma Kambhampati (School of Economics, University of Reading)
    Abstract: Whilst there is an abundant supply of theoretical and empirical contributions in cooperative bargaining models on the transfer of material resources within couples and the labour supply patterns of individuals in couples, this literature has so far not been interested in measuring empirically the utilities of partners. Conversely the literature on hedonic wellbeing has recently moved on to assess couple’s happiness and the extent to which individuals in couples influence each other’s happiness without making reference to the problem of allocation of resources. The latter is however important to both the individual and couple happiness, and in the limit determine whether couples stay together. Here we address the role of the allocation of resources, particularly in the form of time use time and the effect it has on the joint and individual utilities in the couple.
    Keywords: happiness, utility transfers, time use, care
    JEL: D13 I31
    Date: 2010–05–06
  3. By: Bruce Chapman (Australian National University); Cahit Guven (Deakin University)
    Abstract: One of the most common findings in contemporary empirical social science is that being married is associated with higher measured levels of happiness, or life satisfaction. The result seems to be consistent across both countries and time, and is apparently robust to statistical method, including with respect to econometric specification and fixed effects modelling. Our contribution is to propose that quality of a marriage is likely to be a very important factor in our understanding of the role of marital status, and to conjecture that for some married people being in an alternative state would be conducive to a higher level of happiness. We test this simple idea with conventional OLS modelling using life satisfaction data from three countries, the US, the UK and Germany, and the findings are very clear. We find that the coefficient on the marriage dummy is significant and important with the usual modelling but once marriage quality is controlled for, the effects of being married are extremely different between those in good compared to those in poor marriages. In all three data sets people in self-assessed poor marriages are fairly miserable, and much less happy than unmarried people, and people in self-assessed good marriages are even more happy than the literature reports. We also find that the results differ importantly between women and men, with members of the former sex showing a greater range of responses to marriage quality than do men. A final set of results is that, when marriage quality is controlled for, the apparent marriage effects on other outcome variables, such as self reported health and trust, change significantly.
    Keywords: marriage, happiness, health, marriage quality
    JEL: D14 D63 I31
    Date: 2010–05–14
  4. By: Vikman, Ulrika (Department of Economics, Uppsala University)
    Abstract: This paper examines if the probability of leaving unemployment changes for unemployed parents with young children when childcare is available. To investigate this, I use the heterogeneity among Swedish municipalities before the implementation of a 2001 Swedish childcare reform making it mandatory for municipalities to offer child¬care to unemployed parents for at least 15 hours per week. In the study difference-in-differences and difference-in-difference-in-differences methods are used. The results indicate a positive effect on the probability of leaving unemployment for mothers when childcare is available, but no effect is found for fathers. For mothers, some heterogeneous effects are also found, with a greater effect on the probability of leaving unemployment for work when childcare is available for mothers with only compulsory schooling or university education and mothers with two children.
    Keywords: Unemployment duration; childcare
    JEL: J13 J64
    Date: 2010–05–06
  5. By: Huang, Haifang (University of Alberta, Department of Economics); Humphreys, Brad (University of Alberta, Department of Economics)
    Abstract: We investigate the relationship between participation in physical activity and self reported happiness in the United States. IV estimates based on data from the Behavioral Risk Factor Surveillance System and County Business Patterns indicate that individuals living in a county with greater access to sports facilities are more likely to participate in physical activity and also report higher life satisfaction. The contribution of participation in physical activity to increased happiness is three times the size of the loss in happiness associated with being unemployed. Both men and women gain happiness from participation, and men appear to benefit more.
    Keywords: happiness; physical activity; instrumental variables
    JEL: C39 D60 I18 L83
    Date: 2010–04–01
  6. By: Christine Binzel; Dietmar Fehr
    Abstract: While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms.
    Keywords: trust, hidden action, social distance, solidarity, reciprocity, economic development
    JEL: C72 C93 D82 O12
    Date: 2010–05

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