New Economics Papers
on Economics of Happiness
Issue of 2011‒11‒21
six papers chosen by

  1. Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe By Andrés Rodríguez-Pose; Kristina Maslauskaite
  2. How Happiness Impacts Choice By Mogilner, Cassie; Aaker, Jennifer; Kamvar, Sepandar
  3. The usefulness of a Happy Income Index By Prinz, Aloys; Bünger, Björn
  4. "I'm afraid I have bad news for you . . ." Estimating the impact of different health impairments on subjective well-being By Martin Binder; Alex Coad
  5. Happy for How Long? How Social Capital and GDP relate to Happiness over Time By Stefano Bartolini; Francesco Sarracino
  6. Does High Involvement Management Improve Worker Wellbeing? By Alex Bryson; Petri Böckerman; Pekka Ilmakunnas

  1. By: Andrés Rodríguez-Pose (IMDEA Social Sciences Institute); Kristina Maslauskaite (College of Europe, Bruges, Belgium)
    Abstract: In the last decade, Central and Eastern European (CEE) countries have witnessed a rapid economic convergence vis-à-vis Western Europe. However, this rapid growth has not been matched by a similarly rapid increase in life satisfaction, which has remained low in the European context. This paper sets out to address this conundrum, by looking at the individual and macro-level determinants of individual life satisfaction in ten CEE countries. The results highlight that while Central and Eastern Europeans share the same individual determinants of happiness as people in the West (despite some significant cross-country variation), macroeconomic and institutional differences are the key factors behind the lack of convergence in life satisfaction. On the macroeconomic side, GDP growth is still a source of increasing well-being, but the happiness bonus associated with it is becoming smaller. The different levels of individual happiness in CEE are therefore mostly determined by institutional factors such as corruption, government spending and decentralisation, making policies aimed at enhancing institutional quality capable of bringing about substantial improvements in the overall life satisfaction of the people in the region.
    Keywords: Happiness; Convergence; Easterlin paradox; Institutions; Corruption; Decentralisation; Central and Eastern Europe
    Date: 2011–11–10
  2. By: Mogilner, Cassie (University of PA); Aaker, Jennifer (Stanford University); Kamvar, Sepandar (MIT)
    Abstract: Consumers want to be happy, and marketers are increasingly trying to appeal to consumers' pursuit of happiness. However, the results of six studies reveal that what happiness means varies, and consumers' choices reflect those differences. In some cases happiness is defined as feeling excited, and in other cases happiness is defined as feeling calm. The type of happiness pursued is determined by one's temporal focus, such that individuals tend to choose more exciting options when focused on the future, and more calming options when focused on the present moment. These results suggest that the definition of happiness, and consumers' resulting choices, are dynamic and malleable.
    Date: 2011–10
  3. By: Prinz, Aloys; Bünger, Björn
    Abstract: In this paper, Happy Income is introduced as an indicator of physical and socio-psychic wellbeing. It is constructed on the assumption that socio-economic well-being is based on objective circumstances, such as personal income as well as on a subjective evaluation of life. In combining these factors, Happy Income is a cardinal measure of overall well-being in a given country. Therefore, Happy Income is not subject to the limitations of purely ordinally scaled indicators, i.e. it is not restricted by an upper bound, which may be one explanation of the Easterlin paradox. The Happy Income concept is employed to measure social well-being in various different European countries. The results are compared to these countries' score on Ruut Veenhoven's Happy Life Years. It is argued that Happy Income is a valuable complement to other indicators of well-being at an aggregated level. --
    Keywords: Happiness research,Happy Income,Happy Life Years,Subjective Well-being
    JEL: I10 I31
    Date: 2011
  4. By: Martin Binder; Alex Coad
    Abstract: Bad health can severely disrupt a person's life. We apply matching estimators to examine how changes in subjective health status as well as different (objective) conditions of bad health affect subjective well-being. The strongest effect is in the category alcohol and drug abuse, followed by anxiety, depression and other mental illnesses, stroke, diabetes and cancer. We also take into account differences in "Big Five" personality traits. Adaptation to health impairments depends strongly on the health impairment examined. There is also a puzzling asymmetry: strong adverse reactions to deteriorations in health are observed alongside weak increases in well-being after health improvements.
    Keywords: Length 33 pages
    Date: 2011–10–24
  5. By: Stefano Bartolini; Francesco Sarracino
    Abstract: What does predict the evolution over time of subjective well-being? We answer this question correlating cross country time series of subjective well-being with the time series of social capital and/or GDP. First, we adopt a bivariate methodology similar to the one used used by Stevenson and Wolfers (2008), Sacks et al. (2010), Easterlin and Angelescu (2009), Easterlin et al. (2010). We find that in the long (at least 15 years) and medium run (6 years) social capital is a powerful predictor of the evolution of subjective well-being. In the short-term (2 years) this relationship weakens. Indeed, short run changes in social capital predict a much smaller portion of the changes in subjective well-being, compared to longer periods. GDP follows a reverse path: in the short run it is more positively correlated to the changes in well-being than in the medium-term, while in the long run the correlation vanishes. Secondly, we run trivariate regressions of time series of subjective well-being on time series of both social capital and GDP, which confirm the results from bivariate analysis.
    Keywords: Easterlin paradox; GDP; economic growth; subjective well-being; happiness; life satisfaction; social capital; time-series; short run; medium run; long run; WVS; EVS; ESS; time-series.
    JEL: D60 I31 O10
    Date: 2011–10
  6. By: Alex Bryson; Petri Böckerman; Pekka Ilmakunnas
    Abstract: Employees exposed to high involvement management (HIM) practices have higher subjective wellbeing, fewer accidents but more short absence spells than "like" employees not exposed to HIM. These results are robust to extensive work, wage and sickness absence history controls. We present a model which highlights the possibility of higher short-term absence in the presence of HIM because it is more demanding than standard production and because multi-skilled HIM workers cover for one another's short absences thus reducing the cost of replacement labour faced by the employer. We find direct empirical support for the assumptions in the model. Consistent with the model, because long-term absences entail replacement labour costs for HIM and non-HIM employers alike, long-term absences are independent of exposure to HIM.
    Keywords: Health, subjective wellbeing, sickness absence, job satisfaction, pain, high involvement management, high performance work system, performance-related pay, training, team working, information sharing
    JEL: I10 J28 J81 M52 M53 M54
    Date: 2011–11

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