New Economics Papers
on Economics of Happiness
Issue of 2011‒04‒09
five papers chosen by

  1. Relative standing and subjective well-being in South Africa: The role of perceptions, expectations and income mobility By Dorrit Posel; Daniela Casale
  2. "Beauty Is the Promise of Happiness"? By Hamermesh, Daniel S.; Abrevaya, Jason
  3. Health and Well-Being in the Crisis By Askitas, Nikos; Zimmermann, Klaus F.
  4. Individual Welfare and Subjective Well-Being : Commentary Inspired by Sacks, Stevenson and Wolfers By Hammond, Peter J.; Liberini, Federica; Proto, Eugenio
  5. Happiness and Tax Morale: an Empirical Analysis By Diego Lubian; Luca Zarri

  1. By: Dorrit Posel; Daniela Casale
    Abstract: Most studies that explore the impact of relative standing on subjective well-being use objective measures of the individual’s relative position, such as the mean income of the reference group or the individual’s ranking in the relevant income distribution. In this paper, using a new household survey from South Africa, we are able to derive subjective measures of relative standing, as information is collected on individuals’ perceptions of where they rank in the income distribution. We find considerable differences between objective and subjective measures of an individual’s relative ranking. Furthermore, our results suggest that an individual’s perceived relative status has a significantly larger effect on subjective well-being than objective measures of relative status based on reported income. We also examine the effects on subjective well-being of how individuals perceive their relative position in the income distribution to have changed since childhood, and what they expect their relative position to be in the future. We find that future upward mobility has a smaller effect than upward mobility compared to one’s past, suggesting that life satisfaction is influenced more by what has been achieved than by anticipated achievements.
    Keywords: subjective well-being, relative standing, perceptions, expectations, income mobility, South Africa
    JEL: I31 D31
    Date: 2011
  2. By: Hamermesh, Daniel S. (University of Texas at Austin); Abrevaya, Jason (University of Texas at Austin)
    Abstract: We measure the impact of individuals' looks on their life satisfaction or happiness. Using five data sets from the U.S., Canada, the U.K., and Germany, we construct beauty measures in different ways that allow putting a lower bound on the true effects of beauty on happiness. Personal beauty raises happiness, with a one standard-deviation change in beauty generating about 0.10 standard deviations of additional satisfaction/happiness among men, 0.12 among women. Accounting for a wide variety of covariates, including those that might be affected by differences in beauty, and particularly effects in the labor and marriage markets, the impact among men is more than halved, among women slightly less than halved. The majority of the effect of beauty on happiness may work through its effects on economic outcomes.
    Keywords: life satisfaction, measurement error, looks
    JEL: I30 J10 C20
    Date: 2011–03
  3. By: Askitas, Nikos (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The internet has become an important data source for the Social Sciences because these data are available without lags, can be regarded as involuntary surveys and hence have no observer effect, can be geo-labeled, are available for countries across the globe and can be viewed in continuous time scales from the micro to the macro level. The paper uses internet search data to document how the great economic crisis has affected people’s well-being and health studying the US, Germany and a cross section of the G8 countries. We investigate two types of searches which capture self-diagnosis and treatment respectively: those that contain the words ’symptoms’ and ’side effects’. Significant spikes for both types of searches in all three areas (US, Germany and the G8) are found, which are coincident with the crisis and its contagion timeline. An array of due diligence checks are performed and a number of alternative hypotheses are excluded to confirm that the search spikes imply an increase in malaise.
    Keywords: well-being, symptoms, side effects, Gallup, economic crisis, financial crisis, ill-being
    JEL: C81 E32 I1 L86
    Date: 2011–03
  4. By: Hammond, Peter J. (University of Warwick); Liberini, Federica (University of Warwick); Proto, Eugenio (University of Warwick)
    Abstract: Sacks, Stevenson and Wolfers (2010) question earlier results like Easterlin's showing that long-run economic growth often fails to improve individuals'average reports of their own subjective well-being (SWB). We use World Values Survey data to establish that the proportion of individuals reporting happiness level h, and whose income falls below any xed threshold, always diminishes as h increases. The implied positive association between income and reported happiness suggests that it is possible in principle to construct multi-dimensional summary statistics based on reported SWB that could be used to evaluate economic policy
    Date: 2011
  5. By: Diego Lubian (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: This paper presents empirical evidence that \tax morale" - taxpayers' intrinsic motivation to pay taxes - constitutes a new determinant of happiness, even after controlling for several demographic and socioeconomic factors. Using data on Italian households for 2004, we assess the strength of tax morale by relying on single items as well as composite multi-item indices. Our main result that scal honesty generates a higher hedonic payo than cheating is in line with Harbaugh et al. (2007)'s neuroeconomic nding. Further, it sheds light on the well-known \puzzle of compliance", that is the fact that many individuals pay taxes even when expected penalty and audit probability are extremely low: tax compliance is less puzzling once we show that not only it is materially costly, but also provides sizeable non-pecuniary benets that make it rewarding in itself.
    Keywords: Happiness, Tax Morale, Tax Compliance
    Date: 2011–03

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