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on Economics of Happiness |
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Issue of 2012‒01‒03
five papers chosen by |
| By: | Felix R. FitzRoy; Michael A. Nolan; Max F. Steinhardt; David Ulph |
| Abstract: | In a simple 2-period model of relative income under uncertainty, higher comparison income for the younger cohort can signal higher or lower expected lifetime relative income, and hence either increase or decrease well-being. With data from the German Socio-Economic Panel and the British Household Panel Survey, we first confirm the standard negative effects of comparison income on life satisfaction with all age groups, and many controls. However when we split the West German sample by age we find a positive significant effect of comparison income in the under 45s, and the usual negative effect only in the over 45 group. With the same split in UK and East German data, comparison income loses significance, which is consistent with the model prediction for the younger group. Our results provide first evidence that the standard aggregation with only a quadratic control for age can obscure major differences in the effects of relative income. |
| Keywords: | Subjective life-satisfaction, comparison income, reference groups, age, welfare |
| JEL: | D10 I31 J10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp415&r=hap |
| By: | Stefano Bartolini; Ennio Bilancini; Francesco Sarracino |
| Abstract: | Using longitudinal data from the German Socio-Economic Panel, we estimate the variation of subjective well-being experienced by Germans over the last two decades testing the role of some of the major correlates of people¿s well-being. Our results suggest that the variation of Germans¿ well-being between 1996 and 2007 is well predicted by changes over time of income, demographics and social capital. The increase in social capital predicts the largest positive change in subjective well-being. Income growth, also predicts a substantial change in subjective well-being, but it is compensated for about three fourths by the joint negative predictions due to income comparison and income adaptation. Finally, we find that aging of the population predicts the largest negative change in subjective well-being. This result appears to hinge on the large loss of satisfaction experienced by individuals in old age. |
| Keywords: | Subjective well-being, life satisfaction, social capital, sociability, relational goods, relative income, social comparisons, income adaptation, SOEP |
| JEL: | I3 O1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp414&r=hap |
| By: | Sarah Fleche; Conal Smith; Piritta Sorsa |
| Abstract: | The paper explores issues with assessing wellbeing in OECD countries based on self-reported life satisfaction surveys in a pooled regression over time and countries, at the country level and the OECD average. The results, which are in line with previous studies of subjective wellbeing, show that, apart from income, the state of health, not being unemployed, and social relationships are particularly important for wellbeing with only some differences across countries. The results also show that cultural differences are not major drivers of differences in life satisfaction. Correlations between the rankings of measures of life satisfaction and other indicators of wellbeing such as the Human Development Index and Better Life Index are also relatively high. Measures of subjective wellbeing can play an important part in informing policy makers of progress with wellbeing in general, or what seems to matter for wellbeing—health, being employed and social contacts-- beyond income.<P>Examen des déterminants subjectifs du bien-être dans les pays de l'OCDE : une caractérisation basée sur le World Values Survey<BR>The paper explores issues with assessing wellbeing in OECD countries based on self-reported life satisfaction surveys in a pooled regression over time and countries, at the country level and the OECD average. The results, which are in line with previous studies of subjective wellbeing, show that, apart from income, the state of health, not being unemployed, and social relationships are particularly important for wellbeing with only some differences across countries. The results also show that cultural differences are not major drivers of differences in life satisfaction. Correlations between the rankings of measures of life satisfaction and other indicators of wellbeing such as the Human Development Index and Better Life Index are also relatively high. Measures of subjective wellbeing can play an important part in informing policy makers of progress with wellbeing in general, or what seems to matter for wellbeing—health, being employed and social contacts-- beyond income. |
| Keywords: | health, welfare, well-being, comparative studies, santé, bien-être, etudes comparatives |
| JEL: | A13 I3 P52 |
| Date: | 2011–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:921-en&r=hap |
| By: | Maurizio Pugno (University of Cassino) |
| Abstract: | The recent debate on happiness in economics has revived interest in Scitovsky’s 1976 book The Joyless Economy, which aims at explaining the income-happiness paradox, i.e. "why [American] unprecedented and fast-growing prosperity had left its beneficiaries unsatisfied." A dynamic economic model will distil Scitovsky’s proposal, which has not yet been integrated into conventional economics. It will show that people’s dissatisfaction may be due to their excess of demand for ‘comfort’, which requires consumption goods, and to their lack in pursuing ‘creative activities’, which instead essentially require leisure and a skill, called ‘leisure skill’, that people have failed to develop. Since comfort includes comparing consumption with that of others, Scitovsky also strengthened the conventional solution of the paradox. |
| Keywords: | Scitovsky, income-happiness paradox, comfort, creative activities, leisure skill |
| JEL: | A12 D60 J24 Z10 |
| Date: | 2011–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:css:wpaper:2011-07&r=hap |
| By: | Maurizio Pugno (University of Cassino); Paolo Verme (University of Torino) |
| Abstract: | The paper investigates the relation between social capital and life satisfaction focusing on the distinction between bonding and bridging as introduced by Putnam (2000). Using the latest version of the combined World and European Values Surveys, we first address the question of measurement of social capital by means of a multi-step factor analysis. Through this procedure, we find that proxies typically used for social capital tend to polarize around two dimensions interpreted as bonding and bridging. These two dimensions are in fact associated with a single latent variable with opposite signs suggesting that they describe two sides of the same latent variable rather than two independent latent variables. We call this latent variable the locus of socializing and use it to explore the relation between social capital and life satisfaction across world citizens and across groups of similar countries. The results indicate that people with extreme bonding or bridging behavior are less happy than people with more balanced attitudes. Unlike the literature on social capital and economic growth that finds bridging attitudes more desirable than bonding attitudes, we find that bonding attitudes are at least as important as bridging attitudes for life satisfaction. This suggests that the social capital dimensions important for economic growth may not necessarily coincide with the social capital dimensions important for life satisfaction. |
| Keywords: | Life Satisfaction, Social Capital, Bonding, Bridging |
| JEL: | A13 D6 I3 Z1 |
| Date: | 2011–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:css:wpaper:2011-08&r=hap |