nep-hap New Economics Papers
on Economics of Happiness
Issue of 2011‒12‒13
eight papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Hedging one’s happiness – Should a sports fan bet on the opponent? By Bart Stemmet
  2. Multidimensional Well-Being at the Top: Evidence for Germany By Peichl, Andreas; Pestel, Nico
  3. Does Migration Make You Happy? A Longitudinal Study of Internal Migration and Subjective Well-Being By Nowok, Beata; van Ham, Maarten; Findlay, Allan M; Gayle, Vernon
  4. Vignette Equivalence and Response Consistency: The Case of Job Satisfaction By Ferrer-i-Carbonell, Ada; van Praag, Bernard M. S.; Theodossiou, Ioannis
  5. The French Unhappiness Puzzle: The Cultural Dimension of Happiness By Senik, Claudia
  6. The Quest for Well-being in Growth Industries 2: The Survey By Tallberg, Teemu; Hearn, Jeff; Niemistö, Charlotta; Gripenberg, Pernilla; Jyrkinen, Marjut; McKie, Linda
  7. Inequality and well-being in transition economies: A non-experimental test of inequality aversion By Alexandru Cojocaru
  8. Ecosystem effects on well-being: More than just "benefits"? Looking at ecosystem services through the capability approach By Polishchuk, Yuliana; Rauschmayer, Felix

  1. By: Bart Stemmet (Department of Economics, University of Stellenbosch)
    Abstract: This paper sets out to show that a risk-averse sport fanatic could hedge his happiness by betting on the opposition. The literature surrounding happiness, risk- and loss aversion is explored and a model is developed to explain the happiness a fan derives from a match. It is shown that expectation as to what the result may be plays a vital role in the emotions awakened. An upset victory is much sweeter than one where one’s team is the outright favourite. Expectations determine the odds offered by bookies. Here lies the beauty of this strategy. Suffering an unexpected loss is more painful than an anticipated beating. That being said, the payout from betting on the underdog opposition (which subsequently won) would be larger the more unexpected the result was. To bet on the opposition to hedge one’s happiness appears to be a plausible strategy for an economically risk-averse sports fan – especially if one supports the odds-on favourite.
    Keywords: Happiness, Sports betting, Risk aversion, Loss aversion
    JEL: D81 D84
    Date: 2011
  2. By: Peichl, Andreas (IZA); Pestel, Nico (IZA)
    Abstract: This paper employs a multidimensional approach for the measurement of well-being at the top of the distribution using German SOEP micro data. Besides income as traditional indicator for material well-being, we include health as a proxy for nonmaterial quality of life as well as self-reported satisfaction with life as dimensions. We find that one third of the German population is well-off in at least one dimension but only one percent in all three dimensions simultaneously. While the distribution of income has become more concentrated at the top, the concentration at the top of the multidimensional well-being distribution has decreased over time. Moreover, health as well as life satisfaction contribute quite substantially to multidimensional wellbeing at the top which has important policy implications.
    Keywords: multidimensional measurement, well-being, Germany
    JEL: D31 D63 I31
    Date: 2011–11
  3. By: Nowok, Beata (University of St. Andrews); van Ham, Maarten (Delft University of Technology); Findlay, Allan M (University of St. Andrews); Gayle, Vernon (University of Stirling)
    Abstract: The majority of modelling studies on consequences of internal migration focus almost exclusively on the labour market outcomes and the material well-being of migrants. We investigate whether individuals who migrate within the UK become happier after the move than they were before it and whether the effect is permanent or transient. Using life satisfaction responses from 12 waves of the British Household Panel Survey (BHPS) and employing a fixed-effects model, we derive a temporal pattern of migrants' subjective well-being (SWB) around the time of the migration event. Our findings make an original contribution by revealing for the first time that, on average, migration is preceded by a period when individuals experience a significant decline in happiness. The boost that is received through migration appears to bring people back to their initial level of happiness. As opposed to labour market outcomes of migration, SWB outcomes do not differ significantly between men and women. Perhaps surprisingly, long-distance migrants are at least as happy as short-distance migrants despite the higher social costs that are involved.
    Keywords: migration, happiness, subjective well-being, longitudinal data, UK
    JEL: J61 R23
    Date: 2011–11
  4. By: Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC)); van Praag, Bernard M. S. (University of Amsterdam); Theodossiou, Ioannis (University of Aberdeen)
    Abstract: We compare reported job satisfaction with vignette evaluations of hypothetical jobs by using a British, Greek and Dutch data set, containing 95 randomly assigned vignettes. In order to test comparability of international data sets recently the method of anchoring vignettes has been introduced by King et al. (2004). This intuitively and attractive idea requires the properties of vignette equivalence and response consistency. In our data set both job satisfaction and vignettes are numerically evaluated on a 0-10-scale. This fact allows us to interpret the evaluations as cardinal satisfaction values and to estimate satisfaction functions for vignettes and for the own job situation. We find that both functions differ significantly: vignette evaluations appear to depend on the own job situation and other individual characteristics. Hence, without correction for those differences in background characteristics, vignette evaluations are not comparable between individuals. Similar conclusions are reached for response consistency.
    Keywords: vignettes, vignette equivalence, response consistency, job satisfaction, subjective well-being
    JEL: J28 D6 J24 C25
    Date: 2011–11
  5. By: Senik, Claudia (Paris School of Economics)
    Abstract: This article sheds light on the important differences in self-declared happiness across countries of equivalent affluence. It hinges on the different happiness statements of natives and immigrants in a set of European countries to disentangle the influence of objective circumstances versus psychological and cultural factors. The latter turns out to be of non-negligible importance in explaining international heterogeneity in happiness. In some countries, such as France, they are responsible for 80% of the country's unobserved idiosyncratic source of (un-)happiness.
    Keywords: happiness, subjective well-being, international comparisons, France, immigration, European Social Survey
    JEL: I31 H52 O15 O52 Z10
    Date: 2011–11
  6. By: Tallberg, Teemu (Department of Management and Organisation); Hearn, Jeff (Department of Management and Organisation); Niemistö, Charlotta (Department of Management and Organisation); Gripenberg, Pernilla (Department of Management and Organisation); Jyrkinen, Marjut (Department of Management and Organisation); McKie, Linda (Department of Management and Organisation)
    Abstract: This working paper reports the ongoing research conducted in the research project, The Quest for Well-being in Growth Industries: A Collaborative Study in Finland and Scotland, under the auspices of Academy of Finland research programme, The Future of Work and Well-being.<p> The research project examines the contradictory pressures for policies and practices towards both the inhibition and the enhancement of work-related well-being that are likely in growth industries.<p> The overall aim is to evaluate the development, implementation and use of work-related well-being policies in four selected growth industries. These – electronics, care, finance and accounting, and tourism – have been selected on the basis of EU and national forecasts, and demographic and socio-economic trends in standard and non-standard employment.<p> In this paper we aim to review the survey that constitutes the second main phase of this research.
    Keywords: care; companies; employing organisations; growth sectors; human resources management; HRM; organisations; organisation carescapes; survey; well-being; work
    Date: 2011–08–26
  7. By: Alexandru Cojocaru (University of Maryland)
    Abstract: This paper examines the link between inequality and individual well-being using household survey data from 27 Transition Economies, where income inequality increased considerably since 1989. A test of inequality aversion in individual preferences that draws on the Fehr and Schmidt (QJE, 1999) specification of inequality aversion is proposed, and the difficulties of implementing it in a non-experimental setting are discussed. Estimates based on this model confirm aversion to inequality both in the overall sample and in the regional sub-samples. The Gini index, on the other hand, is unable to capture this negative effect of inequality on well-being. Notably, inequality aversion is not intrinsic. Rather, it appears to be tied to a concern with the fairness of the institutions underlying the distribution of fortunes in society. The evidence is suggestive of inequality of opportunity driving attitudes toward overall inequality. Perceiving inequality to be unfair is also associated with calls for strong government involvement in redistributive policies.
    Keywords: inequality aversion, relative deprivation, subjective well-being, transition economies.
    JEL: D63 I32 P20
    Date: 2011
  8. By: Polishchuk, Yuliana; Rauschmayer, Felix
    Abstract: Conceptual discussions on the impacts of ecosystem services (ESS) on human well-being have largely been boiled down to limits and applications of their monetisation. Therefore, in practice, the use of the ESS concept has been to a large extent boiled down to payment-for-ecosystem-services schemes. In this paper we argue that the human well-being dimension of the ESS concept has to be revisited since it is more diverse than the widely cited notion of benefits (MA, 2005). To tackle this issue, we examine the ESS concept through the lens of the capability approach, which offers a pluralistic framework for well-being as an alternative to mainstream utilitarian or monetary perspectives. We argue that ESS can effectively be viewed as contributing - in different ways - to people's multidimensional capability sets, i.e. their freedoms to lead a life they have reason to value. Such a view allows us to go beyond currently prevailing utilitarianism in analysing effects of ecosystems on human well-being, thus contributing with a new perspective to the current discourse on the use of the ESS concept. --
    Date: 2011

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