New Economics Papers
on Economics of Happiness
Issue of 2010‒06‒04
eight papers chosen by

  1. Machen Kinder doch glücklich? By Stephan Humpert
  2. Choices Which Change Life Satisfaction: Revising SWB Theory to Account for Change By Bruce Headey; Ruud Muffels; Gert G. Wagner
  3. A Measure of Rationality and Welfare By Jose Apesteguia; Miguel Angel Ballester
  4. Microeconomic Approaches to Development: Schooling, Learning, and Growth By Rosenzweig, Mark R.
  5. The Meaning(s) of Happiness By Kamvar, Sep; Mogilner, Cassie; Aaker, Jennifer
  6. When Is Happiness about How Much You Earn? The Effect of Hourly Payment on the Money-Happiness Connection By DeVoe, Sanford E.; Pfeffer, Jeffrey
  7. Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects By Justina AV Fischer
  8. Sind Selbständige zeit- und einkommensarm? Eine Mikroanalyse der Dynamik interdependenter multidimensionaler Armut mit dem Sozio-ökonomischen Panel und den deutschen Zeitbudgeterhebungen By Joachim Merz; Tim Rathjen

  1. By: Stephan Humpert
    Abstract: In der ökonomischen Zufriedenheitsforschung wird ein negativer Effekt von Kindern auf die elterliche Zufriedenheit ermittelt. Dazu werden oftmals Probitmodelle geschätzt. In diesem Papier wird nun ein fixed effects Modell benutzt. Mittels Daten des Sozioökonomischen Panels (SOEP) werden Personen betrachtet, die im Zeitablauf zu Eltern werden. Es ergibt sich ein signifikant positiver Effekt von Kinder im Haushalt. Weiterhin werden Interaktionsterme gebildet, um Effekte individueller Arbeitslosigkeit einzufangen. Bei arbeitslosen Väter sinkt deutschlandweit die Zufriedenheit. Arbeitslose Mütter erleben in den alten Bundesländern einen positiven Zufriedenheitseffekt, in den neuen einen Negativen. Dies wird als Folge von regional unterschiedlichen weiblichen Erwerbsmustern in Deutschland interpretiert.
    JEL: I31 J13 J64
    Date: 2010
  2. By: Bruce Headey; Ruud Muffels; Gert G. Wagner
    Abstract: Using data from the long-running German Socio-Economic Panel (SOEP) 1984-2008, this paper analyses the effects of individual preferences and choices on subjective well-being (SWB). It is shown that preferences and choices relating to life goals/values, partner’s personality, hours of work, social participation and healthy lifestyle all have substantial effects on life satisfaction. The results have negative implications for the still dominant theory of SWB, set-point theory. This theory holds that adult SWB does not change in the medium or long term, although temporary fluctuations occur due to specific life events. Set-point theory has come under increasing criticism in recent years, primarily due to unmistakable evidence in SOEP that, during the last 25 years, up to a third of the population has recorded substantial and apparently permanent changes in life satisfaction. It is becoming clear that the main challenge now for SWB researchers is to develop a new theory which can account for medium and long term change, and not merely stability in SWB. Set-point theory is limited precisely because it is purely a theory of stability. The paper is based on a specially constructed SOEP file in which data are divided into five 5-year periods in order to facilitate analysis of medium term change.
    Keywords: SWB, set-point theory, life goals, individual choice, panel regression analysis, SOEP
    JEL: I31 J1 Z13
    Date: 2010
  3. By: Jose Apesteguia; Miguel Angel Ballester
    Abstract: There is ample evidence to show that choice behavior often deviates from the classical principle of maximization. This evidence raises at least two important questions: (i) how severe the deviation is and (ii) which method is the best for extracting relevant information from the choices of the individual for the purposes of welfare analysis. In this paper we address these two questions by proposing a set of foundational conditions on which to build a proper measure of the rationality of individuals, and enable individual welfare analysis of potentially inconsistent subjects, all based on standard revealed preference data. In our first result, we show that there is a unique measure of rationality that satisfies all of the proposed axioms: the weighted-loss indices. In the second part of the paper, we study some relevant properties of weighted-loss indices.
    Keywords: Rationality; Individual Welfare; Revealed Preference.
    JEL: D01 D60
    Date: 2010–05
  4. By: Rosenzweig, Mark R. (Yale University)
    Abstract: I illustrate the variety of approaches to development issues microeconomists employ, focusing on studies that illuminate and quantify the major mechanisms posited by growth theorists who highlight the role of education in fostering growth. I begin with a basic issue: what are the returns to schooling? I discuss microeconomic studies that estimate schooling returns using alternative approaches to estimating wage equations, which require assumptions that are unlikely to be met in low-income countries, looking at inferences based on how education interacts with policy and technological changes in the labor and marriage markets. I then review research addressing whether schooling facilitates learning, or merely imparts knowledge, and whether there is social learning that gives rise to educational externalities. I next examine studies quantifying the responsiveness of educational investments to changes in schooling returns and assess whether and where there exist important barriers to such investments when returns justify their increase.
    JEL: J24 O11 O15 O33
    Date: 2010–03
  5. By: Kamvar, Sep (Stanford University); Mogilner, Cassie (Stanford University); Aaker, Jennifer (Stanford University)
    Abstract: An examination of emotions reported on 12 million personal blogs along with the results of three experiments reveal that the meaning of happiness is not fixed; instead, it shifts as people age. Whereas younger people are more likely to associate happiness with excitement, older people are more likely to associate happiness with feeling peaceful. This change is driven by increased feelings of connectedness (to others and to the present moment) as one ages.
    Date: 2009–05
  6. By: DeVoe, Sanford E. (University of Toronto); Pfeffer, Jeffrey (Stanford University)
    Abstract: We argue that the strength of the relationship between income and happiness can be influenced by exposure to organizational practices, such as being paid by the hour, that promote an economic evaluation of time use. Using cross-sectional data from the US, two studies found that income was more strongly associated with happiness for individuals paid by the hour compared to their non-hourly counterparts. Using panel data from the United Kingdom, Study 3 replicated these results for a multi-item General Health Questionnaire measure of subjective well-being. Study 4 showed that experimentally manipulating the salience of someone's hourly wage rate caused non-hourly paid participants to evince a stronger connection between income and happiness, similar to those participants paid by the hour. Although there were highly consistent results across multiple studies employing multiple methods, overall the effect size was not large.
    Date: 2009–05
  7. By: Justina AV Fischer (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country panel framework that accounts for unobserved, time-invariant country heterogeneity. This study also shows that using supra-national region dummies (by geography or language) in a country-random effects model appears to be a sufficient substitution for omitted country fixed effects.
    Keywords: Happiness, life satisfaction, well-being, quality of life, institutions, democracy, rule of law, political constraints, policy implications, panel econometrics
    JEL: I31 H10 H40 C33
    Date: 2010–05–28
  8. By: Joachim Merz; Tim Rathjen (LEUPHANA University Lüneburg,Department of Economic, Behaviour and Law Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)))
    Abstract: It is common sense that the self-employed – as professions and entrepreneurs – are rich by money and, because of their independence and time sovereignty, are rich by time, too. However, time stress and the variety of small businesses sometimes tell another story. This study tries to shed empirically based light on the issue and its dynamics by asking not only about income poverty but also about time poverty within the framework of a new interdependent multidimensional poverty approach. Database is the German Socio-Economic Panel (GSOEP) for the evaluation of the substitution/trade-off of genuine leisure time and income as well as the German Time Use Surveys (GTUS) 1991/92 and 2001/02 for the actual poverty analyses. Main result: The self-employed are more often affected by single income poverty, single time poverty as well as interdependent multidimensional time and income poverty than all other poor employees (“working poor”) for both periods of observation. A remarkable percentage of not income poor but time poor employees in general, and the self-employed in particular, is not able to compensate their time deficit by income. Neglecting the self-employed in the poverty and well-being discussion would disregard an important group of the “working poor”.
    Keywords: Self-employed, liberal professions (Freie Berufe), entrepreneurs, interdependent multidimensional time and income poverty, time and income substitution, extended economic well-being, satisfaction/happiness, CES welfare function estimation, working poor, German Socio-Economic Panel, German Time Use Surveys 1991/92 and 2001/02
    JEL: D31 D13 J22
    Date: 2010–05

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