nep-hap New Economics Papers
on Economics of Happiness
Issue of 2010‒08‒14
fifteen papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. The Challenges of Incorporating Empowerment into the HDI: Some Lessons from Happiness Economics and Quality of Life Research By Carol Graham
  2. Success and Failure in Human Development, 1970-2007 By Gustav Ranis; Frances Stewart
  3. A Review of Conceptual and Measurement Innovations in National and Regional Human Development Reports, 1998-2009 By Amie Gaye; Shreyasi Jha
  4. Human Development in Eastern Europe and the CIS Since 1990 By Elizabeth Brainerd
  5. Acute Multidimensional Poverty: A New Index for Developing Countries By Sabina Alkire; Maria Emma Santos
  6. Advances in sub national measurement of the Human Development Index: The case of Mexico By Rodolfo de la Torre; Hector Moreno
  7. Improving the Measurement of Human Development By Carmen Herrero; Ricardo Martínez; Antonio Villar
  8. Hope in Hard Times: Women’s Empowerment and Human Development By Manisha Desai
  9. Influence of regional, national and sub-national HDRs By Paola Pagliani
  10. The Impact of Child Care Subsidies on Child Well-Being: Evidence from Geographic Variation in the Distance to Social Service Agencies By Herbst, Chris M.; Tekin, Erdal
  11. Going Beyond Average Joe's Happiness: Using Quantile Regressions to Analyze the Full Subjective Well-Being Distribution By Martin Binder; Alex Coad
  12. FDI and Human Capital Development By P. Srinivas Subbarao
  13. The Spatial Dimension of Human Development Index in Indonesia By Rullan Rinaldi; Eva Nurwita
  14. I feel good! Gender differences and reporting heterogeneity in self-assessed health By Pfarr, Christian; Schneider, Brit S.; Schneider, Udo; Ulrich, Volker
  15. The Impact of Child Care Subsidies on Child Well-Being: Evidence from Geographic Variation in the Distance to Social Service Agencies By Chris M. Herbst; Erdal Tekin

  1. By: Carol Graham (Brookings Institution and University of Maryland)
    Abstract: The introduction of the HDI sparked a major debate about the adequacy of income as a measure of development. Perhaps as a result, scholars have developed a number of novel measures of well being. Prominent among these is the use of happiness surveys to study well being in its various dimensions, ranging from well being within persons, to the determinants of well being across individuals, to the effects of contextual factors, such as the environment, political regime, and macroeconomic conditions. Sen’s capabilities approach to poverty, which underlies the HDI, highlights the lack of capacity of the poor to make choices or to take certain actions. Happiness surveys are a means to assess the well being of individuals who are constrained in their capacity to make choices or reveal preferences. This paper reviews what we know about measuring quality of life, based on extensive work with happiness surveys in Latin America, and how that accumulated knowledge can inform the debate the HDI originally sparked. It also discusses how the surveys can contribute to our understanding and measurement of empowerment. It discusses the promises – and potential pitfalls – of directly applying the findings to policy, challenges which are germane to measuring and comparing empowerment across countries.
    Keywords: empowerment, poverty, happiness, policy
    JEL: D63 I32 J17 J18 Z0
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-13&r=hap
  2. By: Gustav Ranis (Yale University); Frances Stewart (Centre for Research on Inequality, Human Security and Ethnicity, University of Oxford)
    Abstract: The paper reviews experience in advancing Human Development since 1970 by investigating behaviour among countries that made the largest improvements in HD, and those that made the least improvement. The three developing countries with the fastest growth in the HDI over the period are selected from initial low-HDI, middle HDI- and high HDI country groupings, and their experience compared on a range of indicators. Certain characteristics were common to all success cases: good or moderate educational enrolment ratios; good or moderate female/male enrolment ratios; and good or moderate Human Poverty Indices. The other three major inputs into success appear to be growth, social expenditure and income distribution, and the successful countries showed different combinations of performance on these. Weak performers all experienced poor or moderate economic growth. Two classes of weak performance were: low income countries with weak growth, poor distribution and high poverty; and transition countries where economic, institutional and demographic disruptions led to poor progress. We also look beyond the HDI as an indicator of HD, explore such other features as political freedoms, security and environmental sustainability, and find little correlation between achievements on these indicators (both in levels and changes) with success and failure with respect to the HDI. Finally we provide short country vignettes of some of the success and failure cases, exploring some historical and institutional features associated with their performance.
    Keywords: Human Development, growth, income distribution
    JEL: O11 O2 O20 O15
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-10&r=hap
  3. By: Amie Gaye (Human Development Report Office. United Nations Development Programme); Shreyasi Jha (Human Development Report Office. United Nations Development Programme)
    Abstract: This paper presents the results from an analysis of sub-national, national and regional human development reports nominated for the Human Development Awards between 1998 and 2009 to highlight conceptual and measurement innovations in human development. Through a careful selection process, nearly 70 reports were identified for this study of which this paper describes innovations in 38 reports along five categories: (a) creating a new measure of human development; (b) using new data source; (c) creating a disaggregated measure of human development; (d) using a new methodology; and (e) adapting the existing measure of human development by adding/modifying an existing dimension. The objective of this paper is to analyze the innovations in the national and regional reports from the perspective of their statistical soundness as well as feasibility of their application at the global level in preparation for the twentieth anniversary issue of the Global HDR in 2010. The study concludes that a majority of the conceptual and measurement innovations in the national and regional reports are highly context driven and therefore, may not be feasible at the global level. Data requirements also limit feasibility of conceptual innovations at the global level. However, there are several interesting and novel ideas that can potentially be replicated at the global level with slight modifications.
    Keywords: Human development, innovations, measurement, disaggregation
    JEL: I32 Y80
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-21&r=hap
  4. By: Elizabeth Brainerd (Brandeis University)
    Abstract: This paper examines changes in human development in Eastern Europe and the Commonwealth of Independent States (CIS) since 1990. Three main areas of human development in the region are discussed in detail: (i) changes in wage and income inequality; (ii) trends in mortality and life expectancy; and (iii) changes in political participation and empowerment. While all countries experienced declines in income, rising unemployment and increased inequality in the 1990s, by 2008 most countries had reached or surpassed their pre-transition levels of income per capita, and unemployment and inequality had declined or at least stabilized. Life expectancy declined sharply in the former Soviet Union in the 1990s and remains at low levels. In contrast, life expectancy across Eastern Europe has risen dramatically. Political trends have also diverged across the region, with most East European countries and the Baltics now considered to be reasonably well-functioning democracies, while a number of CIS countries have lost most of the gains in democratization achieved in the 1990s and turned toward authoritarianism.
    Keywords: wage inequality, mortality, gender, empowerment, transitional economies
    JEL: J10 J31 P36
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-16&r=hap
  5. By: Sabina Alkire (Oxford Poverty & Human Development Initiative (OPHI), Queen Elizabeth House (QEH), Department of International Development, Oxford University); Maria Emma Santos (Oxford Poverty and Human Development Initiative, UK and Consejo Nacional de Investigaciones Científicas y Técnicas, Universidad Nacional del Sur, Argentina)
    Abstract: This paper presents a new Multidimensional Poverty Index (MPI) for 104 developing countries. It is the first time multidimensional poverty is estimated using micro datasets (household surveys) for such a large number of countries which cover about 78 percent of the world´s population. The MPI has the mathematical structure of one of the Alkire and Foster poverty multidimensional measures and it is composed of ten indicators corresponding to same three dimensions as the Human Development Index: Education, Health and Standard of Living. Our results indicate that 1,700 million people in the world live in acute poverty, a figure that is between the $1.25/day and $2/day poverty rates. Yet it is no $1.5/day measure. The MPI captures direct failures in functionings that Amartya Sen argues should form the focal space for describing and reducing poverty. It constitutes a tool with an extraordinary potential to target the poorest, track the Millennium Development Goals, and design policies that directly address the interlocking deprivations poor people experience. This paper presents the methodology and components in the MPI, describes main results, and shares basic robustness tests.
    Keywords: Poverty Measurement, Multidimensional Poverty, Capability Approach, Multidimensional Welfare, Human Development, HDI, HPI
    JEL: I3 I32 D63 O1 O15
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-11&r=hap
  6. By: Rodolfo de la Torre (Human Development Research Office (HDRO), PNUD Mexico and Centro de Investigación y Docencia Económicas (CIDE)); Hector Moreno (Human Development Research Office (HDRO), PNUD Mexico)
    Abstract: This paper surveys the main informational, conceptual and theoretical adjustments made to the HDI in the Mexican Human Development Reports and presents a way in which the calculation of the HDI could be carried out to the individual level. First, informational changes include redistributing government oil revenues from oil producing regions to the rest of the country in order to obtain a better picture of available resources and imputing per capita average household income to all municipalities combining census and income surveys. Also, state information is used to set counterfactuals about the first effects of internal migration on development, and municipal data is applied to decompose inequality indices to identify the sources and regions contributing to overall human development inequality. Second, conceptual adjustments consider introducing two additional dimensions to the HDI: being free from local crime and the absence of violence against women. Third, a key theoretical contribution from the Mexican National Reports to the HDI literature is the proposal of an inequality sensitive development index based on the concept of generalized means. Finally, the proposed disaggregation of the HDI at the household and individual level allows analyzing development levels for subgroups of population either by age, ethnic condition, sex and income or HDI deciles across time.
    Keywords: Human Development Index, individual HDI, household HDI, inequality, migration, local crime, absence of violence against women, generalized means
    JEL: C81 I3 D63
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-23&r=hap
  7. By: Carmen Herrero (University of Alicante and Ivie); Ricardo Martínez (University of Málaga); Antonio Villar (Pablo de Olavide University and Ivie)
    Abstract: We propose a new Human Development Index that involves a number of changes with respect to the present one, even though it keeps the basic structure of the index (namely, preserving “health”, “education” and “material wellbeing” as the three basic dimensions of human development). The first change refers to the substitution of the arithmetic mean by the geometric mean, as a way of aggregating the different dimensions in a more sensible way. The second one leads to the introduction of distributive considerations in the evaluation of material wellbeing. The last change consists of the introduction of new variables to approach health and education, looking for a higher sensitivity of the index with respect to the differences between countries. These new variables are specially indicated for the analysis of human development in highly developed countries. Besides the conceptual discussion, that includes a characterization of the chosen aggregation formula, we present a comparative analysis of this new index and the standard one, focusing on the OECD countries.
    Keywords: Human Development, multiplicative indices, distributive concerns, highly developed countries, HDI
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-12&r=hap
  8. By: Manisha Desai (University of Connecticut)
    Abstract: This paper addresses the conceptual and methodological issues related to women’s empowerment, the trends in women’s empowerment over the last 20 years in key areas such as education, health, economic and political participation, and finally the best practices of state and non-state actors in empowering women. Following a brief critique of human development, it begins with a discussion of the growing conceptual consensus around empowerment, i.e., empowerment being control over resources, women’s agency, a process and outcomes, to the methodological issues involved in its measurement, specifically focusing on the Gender Empowerment Measure and arguing that minimally the measure needs to move away from its urban, elite, and formal employment bias. The trends in women’s empowerment over the past 20 years show that while there have been gains in primary and secondary education, in political representation at the national level, and in waged labor, and a decline in fertility and maternal mortality, violence against women and HIV/AIDS continue to be endemic and these trends vary across regions and within countries urban and rural poor, ethnic minorities, and older and disabled women fare worse on all indicators with the current economic crisis reversing many gains. Furthermore, a decrease in measures of gender gap do not translate into gender equality and positive trends are often accompanied by negative trends resulting from unintended consequences of development. Finally, it highlights some government best practices such as quotas, cash transfer programs, gender budgeting, and community based micro enterprises, some movement practices, i.e., local women run community based programs to combat violence and HIV/AIDS and transnational exchanges, unions campaigns such as Decent Work for Women and corporate practices such as gender equality seals and corporate social responsibility.
    Keywords: gender, women’s empowerment, human development
    JEL: Y8
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-14&r=hap
  9. By: Paola Pagliani (Human Development Report Office. United Nations Development Programme)
    Abstract: This review highlights some achievements by regional, national and sub-national Human development Reports (HDRs) in influencing policy debate. Examining a sample of regional, national and sub-national HDRs released over the past 18 years, one concludes that several HDRs influenced the application of the human development concept and measurement to policy analysis at the national level. For the purpose of this exercise, few typologies of HDR influence have been identified, such as the national application of the human development paradigm; the contribution to the human development debate on specific themes; the development of national capacity for policy formulation and assessment; the revision of national policies and budget allocations according to human development priorities; extensive media attention generated by some reports; and the introduction of human development materials in national education curricula in developing countries. The paper dedicates a section to each category, providing examples from HDRs to illustrate the type of influence.
    Keywords: National Human Development Reports, Influence, Policy, Capacity Development
    JEL: Y3 B59 H50
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-19&r=hap
  10. By: Herbst, Chris M. (Arizona State University); Tekin, Erdal (Georgia State University)
    Abstract: In recent years, child care subsidies have become an integral part of federal and state efforts to move economically disadvantaged parents from welfare to work. Although previous empirical studies consistently show that these employment-related subsidies raise work levels among this group, little is known about the impact of subsidy receipt on child well-being. In this paper, we identify the causal effect of child care subsidies on child development by exploiting geographic variation in the distance that families must travel from home in order to reach the nearest social service agency that administers the subsidy application process. Using data from the Kindergarten cohort of the Early Childhood Longitudinal Study, our instrumental variables estimates suggest that children receiving subsidized care in the year before kindergarten score lower on tests of cognitive ability and reveal more behavior problems throughout kindergarten. However, these negative effects largely disappear by the time children reach the end of third grade. Our results point to an unintended consequence of a child care subsidy regime that conditions eligibility on parental employment and deemphasizes child care quality.
    Keywords: development, subsidy, child care
    JEL: I18 I2 J13
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5102&r=hap
  11. By: Martin Binder; Alex Coad
    Abstract: Standard regression techniques are only able to give an incomplete picture of the relationship between subjective well-being and its determinants since the very idea of conventional estimators such as OLS is the averaging out over the whole distribution: studies based on such regression techniques thus are implicitly only interested in Average Joe's happiness. Using cross-sectional data from the British Household Panel Survey (BHPS) for the year 2006, we apply quantile regressions to analyze effects of a set of explanatory variables on different quantiles of the happiness distribution and compare these results with an ordinary least squares regression. We also analyze some reversed relationships, where happiness enters the regression equation as an explanatory variable (e.g., the effects of happiness on individual's financial success). Among our results we observe a decreasing importance of income, health status and social factors with increasing quantiles of happiness. Another finding is that education has a positive association with happiness at the lower quantiles but a negative association at the upper quantiles.
    Keywords: quantile regressions, subjective well-being, happiness, life satisfaction, mental well-being, BHPS Length 32 pages
    JEL: C31 I20 I31
    Date: 2010–07
    URL: http://d.repec.org/n?u=RePEc:esi:evopap:2010-10&r=hap
  12. By: P. Srinivas Subbarao
    Abstract: This paper explains importance of human capital skilling, the relation between the FDI and Human Capital development besides the experiences of these two in different regions of the world i.e., Asian and Latin American experiences. [W.P. No.2008-02-01]
    Keywords: FDI, human capital skilling, Human Capital development, Asian, Latin American
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:2737&r=hap
  13. By: Rullan Rinaldi (Department of Economics, Padjadjaran University); Eva Nurwita (Department of Economics, Padjadjaran University)
    Abstract: As the new paradigm of economic development pioneered by UNDP and Mahbub Ul-Haq undertaken, development processes no longer viewed as monodimensional process of economic growth indicated by GDP growth solely. Human Development Index on the other side offer an indicator that takes into account other aspecta as proxies of life quality such as life expectancy and literacy rate wrapped as a composite index. Several previous researches has try to explain the determinant of HDI, but as HDI was start to calculated at sub national level, the complexity of the task to explain the determinants was escalating due the fact that sub national data has geographical information attached in it. This paper tries to explain the spatial pattern on HDI achievement at sub national level in Indonesia, and estimate the determinants of HDI using spatial econometrics method. The use of the tools based on the necessity to put into account spatial dependence as special form of cross-sectional serial correlation, which is a common situation in observations that has geographical information.
    Keywords: Human Development Index, Spatial Econometrics, Sub National Data
    JEL: O15 R58 R11
    Date: 2010–06
    URL: http://d.repec.org/n?u=RePEc:unp:wpaper:201001&r=hap
  14. By: Pfarr, Christian; Schneider, Brit S.; Schneider, Udo; Ulrich, Volker
    Abstract: For empirical analysis and policy-oriented recommendation, the precise measurement of individual health or well-being is essential. The problem with variables based on questionnaires such as self-assessed health is that the answer may depend on individual reporting behaviour. Moreover, if individual‟s health perception varies with certain attitudes of the respondent reporting heterogenei-ty may lead to index or cut-point shifts of the health distribution, causing estimation problems. We analyse the reporting behaviour of individuals on their self-assessed health status, a five-point categorical variable. We explore observed heterogeneity in categorical variables and include unob-served individual heterogeneity using German panel data. Estimation results show different im-pacts of socioeconomic and health related variables on the five subscales of self-assessed health. Moreover, the answering behaviour varies between female and male respondents, pointing to gen-der specific perception and assessment of diseases. Reporting behaviour on self-assessed health questions in surveys is problematic due to a possible heterogeneity. Hence, in case of reporting heterogeneity, using self-assessed measures in empirical studies may be misleading or at least ambiguous.
    Keywords: reporting heterogeneity; generalized ordered probit; self-assessed health
    JEL: I12 C21
    Date: 2010–08–03
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:24231&r=hap
  15. By: Chris M. Herbst; Erdal Tekin
    Abstract: In recent years, child care subsidies have become an integral part of federal and state efforts to move economically disadvantaged parents from welfare to work. Although previous empirical studies consistently show that these employment-related subsidies raise work levels among this group, little is known about the impact of subsidy receipt on child well-being. In this paper, we identify the causal effect of child care subsidies on child development by exploiting geographic variation in the distance that families must travel from home in order to reach the nearest social service agency that administers the subsidy application process. Using data from the Kindergarten cohort of the Early Childhood Longitudinal Study, our instrumental variables estimates suggest that children receiving subsidized care in the year before kindergarten score lower on tests of cognitive ability and reveal more behavior problems throughout kindergarten. However, these negative effects largely disappear by the time children reach the end of third grade. Our results point to an unintended consequence of a child care subsidy regime that conditions eligibility on parental employment and deemphasizes child care quality.
    JEL: I18 I2 J13
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:16250&r=hap

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