New Economics Papers
on Economics of Happiness
Issue of 2010‒08‒06
four papers chosen by

  2. Human Capital Investments in Children: A Comparative Analysis of the Role of Parent-Child Shared Time in Selected Countries By Österbacka, Eva; Merz, Joachim; Zick, Cathleen D.
  3. Personality, Well-being and Heterogeneous Valuations of Income and Work By Stefanie Schurer; Jongsay Yong
  4. On weighting the components of the Human Development Index: A statistical justification By Georges Nguefack-Tsague; Stephan Klasen; Walter Zucchini

  1. By: Vincenzo Carrieri (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: The importance of social comparison in shaping individual utility has been widely documented by subjective well-being literature. So far, income has been the main dimension considered in social comparison. This paper aims to investigate whether subjective well-being is influenced by inter-personal comparison with respect to health. Thus, we study the effects of the health of others and relative health hypothesis on two measures of subjective well-being: happiness and subjective health. Using data from the Italian Health Conditions survey, we show that a high incidence of chronic conditions and disability among reference groups negatively affects both happiness and subjective health. Such effects are stronger among people in the same conditions. These results, robust to different econometric specifications and estimation techniques, suggest the presence of some sympathy in individual preferences with respect to health and reveal that other people?s health status serves as a benchmark to assess one?s own health conditions.
    Keywords: health conditions, social comparison, subjective well-being
    JEL: C21 D64 I31
    Date: 2010–07
  2. By: Österbacka, Eva (Abo Akademi University); Merz, Joachim (Leuphana University Lüneburg); Zick, Cathleen D. (University of Utah)
    Abstract: Parents invest in their children's human capital in several ways. We investigate the extent to which the levels and composition of parent-child time varies across countries with different welfare regimes: Finland, Germany and the United States. We test the hypothesis of parent-child time as a form of human capital investment in children using a propensity score treatment effects approach that accounts for the possible endogenous nature of time use and human capital investment. Result: There is considerable evidence of welfare regime effects on parent-child shared time. Our results provide mixed support for the hypothesis that non-care related parent-child time is human capital enriching. The strongest support is found in the case of leisure time and eating time.
    Keywords: parent-child time, comparative research, welfare regimes, Finland, Germany, USA, treatment effects, propensity score matching
    JEL: D1 J24 J22 H43
    Date: 2010–07
  3. By: Stefanie Schurer (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Jongsay Yong (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: Using Australian longitudinal data and a random coefficient approach, this paper investigates whether personality traits explain the heterogeneity in these valuations. We find that differences in subjective well-being are driven by Emotional Stability. Women's valuations of income depend on their score of Openness to Experience and men significantly differ in their valuations of work across the spectrum of Emotional Stability and Conscientiousness. Our study directly tests predictions of Self-Determination Theory and contributes to the debate on the assumption of homogeneous agents in economic theory.
    Keywords: random coefficient model, personality traits, heterogeneity, subjective wellbeing, income and work, preferences
    JEL: I31 D00 C23
    Date: 2010–07
  4. By: Georges Nguefack-Tsague (University of Yaoundé I, Cameroon); Stephan Klasen (Georg-August-University Göttingen); Walter Zucchini (Georg-August-University Göttingen)
    Abstract: The Human Development Index (HDI) published in the Human Development Report (HDR) of the United Nations Development Program is calculated as a simple average of the Life Expectancy Index (LEI), the Education Index (EI) and the Gross Domestic Product Index (GDPI). This paper provides statistical support for the use of this seemingly arbitrary equal weighting of the three components by treating human development as a latent concept imperfectly captured by its three component indices. We show that a principal component analysis (PCA) based on the correlation matrix of the components leads to practically the same weights. Specifically we show that, for the period 1975 to 2005, the first principal component accounts for between 78% and 90% of the total variability in the data, and that its coefficients are positive and nearly equal. By normalizing the coefficients, the simple average weighting (1/3, 1/3, 1/3) scheme is obtained. The ranks of countries obtained using the PCA weightings are very similar to those based on the HDI. An advantage of the simple equal weighting is that one can define a simple index to measure the balance of a country\'s development, given its HDI which we show below.
    Keywords: Human Development Index; Human Development Report; United Nations Development Program; principal component analysis; correlation matrix
    JEL: I31 C43 O1
    Date: 2010–07–15

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