New Economics Papers
on Economics of Happiness
Issue of 2011‒06‒11
five papers chosen by

  1. Composition of families and subjective economic well-being: An application to Italian context By Maria Francesca Cracolici; Francesca Giambona; Miranda Cuffaro
  2. Are Americans Really Less Happy With Their Incomes? By Kapteyn, A.; Smith, J.P.; Soest, A.H.O. van
  3. Well-being Disparities Within the Paris Region. A Capabilist Spatialized Outlook By Lise Bourdeau-Lepage; Elisabeth Tovar
  4. Money and Happiness: Evidence from the Industry Wage Structure By Pischke, Jörn-Steffen
  5. Regional Economic Disparity: Real wages and happiness (Japanese) By MORIKAWA Masayuki

  1. By: Maria Francesca Cracolici (University of Palermo); Francesca Giambona (University of Palermo); Miranda Cuffaro (University of Palermo)
    Abstract: Using Italian data on Income and Living Conditions for the year 2005, the paper explores empirically whether the determinants of subjective economic well-being (SEW) differ (or not) in four representative typologies of households. By means of a Partial Proportional Ordered Logit Model the subjective economic well-being – proxied by the capacity of households to make ends meet – has been explored. Results highlight the variables acting on SEW, common to each typology, are related both to economic status (specifically, the capacity to pay taxes and to afford housing, clothes and holiday expenditures) and to socio-demographic status (specifically, the work-status and the highest level of education). A more in depth analysis, by level of education, shows the economic precariousness of some specific typologies, namely families with one person, with two or more children, and those whose respondent has a very low level of education.
    Keywords: Economic Well-being, Subjective Approach, Ordered Logit Model
    Date: 2011
  2. By: Kapteyn, A.; Smith, J.P.; Soest, A.H.O. van (Tilburg University, Center for Economic Research)
    Abstract: Recent economic research on international comparisons of subjective well-being suffers from several important biases due to the potential incomparability of response scales within and across countries. In this paper we concentrate on self-reported satisfaction with income in two countries: The Netherlands and the U.S. The comparability problem is addressed by using anchoring vignettes. We find that in the raw data, Americans appear decidedly less satisfied with their income than the Dutch. It turns out however that after response scale adjustment based on vignettes the distribution of satisfaction in the two countries is essentially identical. In addition, we find that the within-country cross-sectional effect of income on satisfaction- a key parameter in the recent debate in the economic literature- is significantly under-estimated especially in the US- when differences in response scales are not taken into account.
    Keywords: happiness;life satisfaction;vignettes;reporting bias.
    JEL: I30 J30
    Date: 2011
  3. By: Lise Bourdeau-Lepage; Elisabeth Tovar
    Abstract: Urban riots, such as in France in 2005, have drawn attention on the spatial determinants of social discontent. We provide evidence on the pervasive collective perception of a dramatic increase of the well-being disparities within the Paris Region during the decade preceding the 2005 riots. We ground our well-being indicator on a spatialized version of Sen's normative capabilist approach, which allows to explicitly take into account the impact of one's localization on one's realizations, opportunities and freedom. Then, using multidimensional poverty indicators and ESDA, we show a global improvement of the Paris region municipalities' Capabilist Spatialized well-being (CaS) between 1999 and 2006 as well as a catching-up phenomenon between advantaged and disadvantaged municipalities. Nevertheless, we also find a growing cluster of very disadvantaged municipalities, some of which have witnessed a decrease of their CaS level. This evidence may explain the belief of a growing socio-spatial fracture within the Paris region.
    Keywords: capabilist well-being, socio-spatial disparities, Paris region
    Date: 2011
  4. By: Pischke, Jörn-Steffen
    Abstract: There is a well-established positive correlation between life-satisfaction measures and income in individual level cross-sectional data. This paper attempts to provide some evidence on whether this correlation reflects causality running from money to happiness. I use industry wage differentials as instruments for income. This is based on the idea that at least part of these differentials are due to rents, and part of the pattern of industry affiliations of individuals is random. To probe the validity of these assumptions, I compare estimates for life satisfaction with those for job satisfaction, present fixed effects estimates, and present estimates for married women using their husbands' industry as the instrument. All these specifications paint a fairly uniform picture across three different data sets. IV estimates are similar to the OLS estimates suggesting that most of the association of income and well-being is causal.
    Keywords: life satisfaction; well-being
    JEL: D1 J31
    Date: 2011–06
  5. By: MORIKAWA Masayuki
    Abstract: This paper presents some empirical facts on regional economic disparity in Japan from an equity perspective. The main findings are as follows: 1) interprefectural differences explain less than 10% of wage disparity amongst individuals, with the majority of disparity being attributable to variances within prefectures; 2) according to the Oaxaca-Blinder decomposition analysis, from 70% to 80% of the disparities of nominal wages between Kanto and Tohoku or Kanto and Kyushu is explained by observable worker characteristics, workplace characteristics, and price level differences. Among the positive relationship between city population and wages, about half is explained by the observable worker and workplace characteristics, and from one third to one half of the remaining half is attributable to price differences; 3) prefecture minimum wages adjusted by the cost of living index indicate that the real minimum wage is the lowest in Tokyo; 4) Although household income is an important determinant of individual happiness, the effect of income on the differences in regional happiness is almost nonexistent. These findings suggest that, from the viewpoint of equity in well-being of people, distributional policy should focus on individuals or households.
    Date: 2010–07

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