New Economics Papers
on Economics of Happiness
Issue of 2011‒02‒19
ten papers chosen by

  1. Will GDP growth increase happiness in developing countries? By Andrew E. Clark; Claudia Senik
  2. Mortality, family and lifestyles By Grégory Ponthière
  3. Attracted but Unsatisfied: The Effects of Arousing Contents on Television Consumption Choices By Luca Stanca; Marco Gui; Marcello Gallucci
  4. Subjective Well-Being: Easterlin Paradox, the (decreasing) Return(s)? From log to square, new evidence from wealthier data By Thomas Roca
  5. Low-Income Mothers’ Material Hardship and Children’s Socioemotional WellBeing By Afshin Zilanawala; Natasha V. Pilkauskas
  6. Inequality and Poverty under Latin America’s New Left Regimes By Darryl McLeod; Nora Lustig
  7. Inequality and Growth: The Role of Beliefs and Culture By Strieborny Martin
  8. Salud y felicidad en Uruguay By Mariana Gerstenblüth; Todd Jewell; Máximo Rossi
  9. Job satisfaction and the individual educational level, re-assessing their relationship By Marisa Bucheli; Natalia Melgar; Máximo Rossi; Tom W. Smith
  10. Childhood, Schooling and Income Inequality By Cavapozzi, Danilo; Garrouste, Christelle; Paccagnella, Omar

  1. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, IZA - Institute for the Study of Labor - IZA); Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, Université Paris-Sorbonne - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche)
    Abstract: This paper asks what low-income countries can expect from growth in terms of happiness. It interprets the set of available international evidence pertaining to the relationship between income growth and subjective well-being. Conforming to the Easterlin paradox, higher income always correlates with higher happiness, except in one case: whether national income growth yields higher well-being is still hotly debated; essentially, the question is whether the correlation coefficient is “too small to matter”. The explanations for the small correlation between income growth and subjective well-being over time appeal to the nature of growth itself (e.g. negative side-effects such as pollution), and to the psychological importance of relative concerns and adaptation. The available evidence contains two important lessons: income comparisons do seem to affect subjective well-being even in very poor countries; however, adaptation may be more of a rich country phenomenon. Our stand is that the idea that growth will increase happiness in low-income countries cannot be rejected on the basis of the available evidence. First, cross-country time-series analyses are based on aggregate measures, which are less reliable than individual ones. Second, development is a qualitative process that involves take-offs and thresholds. Such regime changes are eye-visible through the lens of subjective satisfaction measures. The case of Transition countries is particularly impressive in this respect: average life satisfaction scores closely mirror changes in GDP for about the first ten years of the transition process, until the regime becomes more stable. If subjective measures of well-being were made available in low-income countries, they would certainly help measuring and monitoring the different stages and dimensions of the development process.
    Keywords: income ; subjective well-being ; comparisons ; adaptation ; development
    Date: 2010–11
  2. By: Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: While there is a large empirical literature on the intergenerational transmission of health and survival outcomes in relation to lifestyles, little theoretical work exists on the long-run prevalence of (un)healthy lifestyles induced by mortality patterns. To examine that issue, this paper develops an overlapping generations model where a healthy lifestyle and an unhealthy lifestyle are transmitted vertically or obliquely across generations. It is shown that there must exist a locally stable heterogeneous equilibrium involving a majority of healthy agents, as a result of the larger parental gains from socialization efforts under a higher life expectancy. Wealso examine the robustness of our results to the introduction of parental altruistic concerns for children's health and of asymmetric socialization costs.
    Keywords: altruism ; family ; lifestyle ; longevity ; socialization
    Date: 2010–09
  3. By: Luca Stanca; Marco Gui; Marcello Gallucci
    Abstract: This paper investigates experimentally the effects of arousing contents on viewing choices and satisfaction in television consumption. We test the hypothesis that the portrayal of arousing content combines high attraction and low satisfaction and is thus responsible for sub- optimal choices. In our experiment, subjects can choose among three programs during a viewing session. In the experimental condition, one of the three programs portrays a violent verbal conflict, whereas in the control condition the same program portrays a calm debate. A post-experimental questionnaire is used to assess subjects' satisfaction with the programs and the overall viewing experience. The results support the hypothesis: the presence of arousing content causes sub- jects to watch more of a given program, although they experience lower content-specific and overall satisfaction. Arousing contents also significantly increase the discrepancy between actual and desired viewing.
    Keywords: Rational Choice, Audience, Television, Satisfaction, Arousing content, Laboratory Experiments.
    JEL: D63 C78 C91
    Date: 2011–02
  4. By: Thomas Roca (GED, Université Montesquieu Bordeaux IV)
    Abstract: The quest for happiness is neither new for human beings, nor for economists. With the systematization of household surveys, Subjective Well-Being studies have flourished. Discussions now focus on the slope of the virtually unchallenged curvilinear functional form between income and life satisfaction. Indeed, if growth positive returns are not -yet- contested for societies that have difficulties satisfying their population?s basic needs, the correlation between income and Subjective Well-Being in wealthier countries has no consensus; from flat to steep, researchers dither? Benefitting from larger datasets, recent papers have attempted to debunk the Easterlin paradox. They show that self-reported well-being is steadily and positively correlated with income and growth, even in developed countries. However, using the most up-to-date global surveys, calculations cast doubt upon the belief in an eternal sunshine relation between income and ?happiness?. Indeed, we observe that the curvilinear relation between income and happiness could be challenged by the quadratic one. Thus, it now appears difficult to reject the possibility of decreasing returns, to the extent that it might be possible to consider, not only a weak, but a negative correlation between income and happiness for wealthier countries. Nevertheless, this perspective is likely dependent on the sample size. Moreover, we claim no direct causality for the uncovered negative slope. Further investigations would be necessary to prove, inform - or disprove - these new findings. La recherche du bonheur n?est pas une quête nouvelle pour les humains, ni pour les économistes ! Avec la systématisation des enquêtes ménages, les études sur le bien-être subjectif se sont multipliées. Si le caractère curvilinéaire de l?association entre revenu et bien-être subjectif n?est pas, jusqu?ici, remise en question, les débats se sont récemment concentrés sur la pente de celle-ci. En effet, bien que l?impact positif de la croissance sur le bien-être dans les pays en développement ne soit pas contesté, pour les pays industrialisés, la corrélation entre bien-être subjectif et revenu est loin de faire l?objet d?un consensus. Récemment, en utilisant des bases de données de plus en plus larges, certaines recherches ont remis en cause le paradoxe d?Easterlin. D?après ces travaux, il serait désormais clair que le bien-être subjectif soit durablement et positivement corrélé avec le revenu et la croissance, même pour les pays industrialisés. Néanmoins, nos observations réalisées grâce aux plus complètes bases de données actuellement disponibles, montrent que la relation idyllique entre revenu et bien-être subjectif peut être remise en question. La forme curvilinéaire pourrait en effet, cacher une forme quadratique. Il deviendrait alors difficile de rejeter l?existence de gains marginaux décroissants. Néanmoins, il serait imprudent d?établir un lien de causalité pour la partie décroissante de la pente ainsi mise à jour. De nouvelles recherches et des données plus longues seront nécessaires pour alimenter, ou réfuter, nos observations. (Full text in english)
    JEL: D60 O1 I0 C81 C3
    Date: 2011–02
  5. By: Afshin Zilanawala (Columbia University); Natasha V. Pilkauskas (Columbia University)
    Abstract: Research suggests that children from low-income families are more likely to exhibit behavioral problems than children from wealthier families and these adverse behaviors have long-term detrimental effects on academic outcomes, health and earnings. In this paper, we examine the relationship between material hardship, an economic indicator that describes concrete adversities, and child behavior. Specifically, we use data from the Fragile Families and Child Wellbeing Study to examine the following questions; (a) Is material hardship associated with child socioemotional behavior, (b) Are particular hardships associated with socioemotional outcomes, and (c) Are there stronger effects for more recent or long lasting hardships? We find that children in households experiencing material hardship score significantly higher on aggressive, withdrawn, and anxious/depressed behaviors. Additionally, we find that a mother‘s inability to pay bills, having utilities cut off, and having unmet medical needs have particular adverse affects on child behavior.
    Keywords: low-income families, behavioral problems, children, academic outcomes, health, earnings, long-term detrimental effects, child behavior
    JEL: I32 H51 D31 D63 H31
    Date: 2011–02
  6. By: Darryl McLeod (Fordham University, Department of Economics); Nora Lustig (Tulane University, Department of Economics)
    Abstract: During the last decade, inequality and poverty fell sharply in many Latin American countries; a period in which voters chose left-leaning leaders in ten countries including about half the region’s population. Are these two developments related? Using data for 18 Latin American countries and political regime classification of Arnson and Perales (2007), this paper presents some econometric evidence that the social democratic regimes in Brazil, Chile and to a lesser extent Uruguay were more successful at reducing inequality and poverty than the so-called left populist regimes of Argentina, Bolivia and Venezuela. Both groups implemented policies to redistribute income, but the social democratic regimes redistributive efforts were more effective. Argentina and Venezuela started the 1990-2008 sample window with lower levels of inequality, so to some extent recent reductions in inequality are a return to “normal” levels (as estimated by fixed effects). Inequality and poverty in Brazil and Chile, on the other hand, fell to historic lows during this period. Second, overall terms of trade shocks were more favorable for Argentina and Venezuela, so part of the drop in inequality in those countries can be attributed to typically transient commodity price booms.
    JEL: O15 P16 I32
    Date: 2010
  7. By: Strieborny Martin
    Abstract: In egalitarian countries people believe that luck rather than hard work determines success in life and expect their government to provide both economic growth and social equity. This leads to a stronger dynamic interplay between government interventions, inequality and growth within such countries. The presented results thus confirm the importance of cultural factors and economic beliefs in shaping the inequality-growth link. More fundamentally, the paper demonstrates that cultural background does not only influence the long-run economic outcomes, but can also affect the joint dynamics of real economic variables within countries over time.
    Keywords: culture; inequality; growth
    JEL: O15 O40 P16 Z1
    Date: 2010–11
  8. By: Mariana Gerstenblüth (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Todd Jewell (Department of Economics, University of North Texas); Máximo Rossi (Department of Economics, University of North Texas)
    Abstract: In this paper we study the relationship between individual happiness and self reported health status, using the Religion, Health and Young Emancipation ISSP survey for Uruguay in 2008. Probit estimates suggests that health status has the highest correlation with happiness. In order to control for the observed heterogeneity of this variable, we estimate using matching methods. Results show that reporting a good health rises the probability of being happy between 18 an 29 percentage points. Previous literature support this findings.
    Keywords: happiness, health, matching methods
    JEL: D60 I31 I12
    Date: 2010–09
  9. By: Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Natalia Melgar (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Tom W. Smith (NORC, University of Chicago)
    Abstract: We examine the factors that shape job satisfaction and in particular, the direct and indirect effects of the educational level. Our motivation is based on extending a large body of researches that is focused on private sector data by employing a larger and widely heterogeneous set of micro-data and by including non-linear effects and indirect effects of education. Our dataset includes 25 countries and it comes from the 2007 survey carried out by the International Social Survey Program. We estimate a probit model which includes country-effects in order to control for specific environmental factors. Findings indicate that job satisfaction is negatively related to being male, living in a big city, the number of worked hours per week, and not being self-employed. We also find that age registers a non-linear impact and we provide evidence that individual educational level shows a positive effect but with a decreasing growth rate and also an indirect effect through earned income.
    Keywords: job satisfaction, cross-country research
    JEL: J28 J81 I31 Z13
    Date: 2010–08
  10. By: Cavapozzi, Danilo; Garrouste, Christelle; Paccagnella, Omar
    Abstract: Parental or socioeconomic background plays an important role in determining employment outcomes during the individual whole life-cycle. The extent to which individuals move (up or down) the social ladder relative to one¿s parents is known as inter-generational social mobility. In a relatively immobile society individual outcomes, such as education, occupation or incomes, tend to be strongly related to those of their parents. On the one hand, in less mobile societies human skills may be wasted or mis-allocated. On the other hand, the motivations, the effort, the individual productivity may be affected by the lack of equal economic opportunities. These in turn may affect the overall efficiency and growth potential of a country. The influence of parental socio-economic status on the descendants¿ education, incomes and occupation has been widely investigated in the literature (Solon, 2002; Corak, 2004; OECD, 2010). Even though no single indicator can summarize a so puzzling picture, a general pattern that emerges is that a group of countries (namely, Mediterranean countries) shows a low inter-generational social mobility, while another group of countries (for instance, Nordic countries) tends to be relatively mobile. In this contribution we exploit the richness of SHARELIFE information on household economic resources and social background of respondents at the age of 10 to investigate the relationship between their educational attainments, their labour market outcomes and the social environment where they grew up.
    Keywords: Retrospective survey; Childhood indicators; Human capital accumulation; Income inequalities
    JEL: E24 J24
    Date: 2010–12

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