2012-04-23 papers

on Economics of Happiness

Issue of 2012‒04‒23
two papers chosen by

Personality, well-being and the marginal utility of income: What can we learn from random coefficient models? By Schurer, Stefanie; Yong, Jongsay
Snakes and Ladders, Buffers and Passports: Rethinking Poverty, Vulnerability and Wellbeing By Andy Sumner; Rich Mallett

Personality, well-being and the marginal utility of income: What can we learn from random coefficient models?

By:	Schurer, Stefanie; Yong, Jongsay
Abstract:	Fixed effects models are the gold standard in empirical well-being research, however, their applicability is limited to controlling for intercept heterogeneity and identifying effects of time-varying variables. This paper investigates the usefulness of random coefficient models in controlling for heterogeneity in well-being and the marginal utility of income, and explores whether these forms of heterogeneity depend on the Big-Five personality traits. Using unique Australian longitudinal data that have personality measures available in two time periods we show that a Mundlak-adjusted random coefficient model yields almost identical results as the fixed effects model, making it a powerful modelling alternative when interest lies in multiple forms of heterogeneity. Big-Five personality explains 10 percent of the variation in intercept heterogeneity and 6-7 percent of the variation in the marginal utility of income. For women, we suggest that the marginal utility of income is significantly linked to personality, implying important gender-differences in the expected effectiveness of financial incentives to influence behaviour.
Keywords:	Subjective well-being, Marginal utility of income, Heterogeneity, Personality, Random coefficient models,
Date:	2012–02–24
URL:	http://d.repec.org/n?u=RePEc:vuw:vuwecf:2040&r=hap

Snakes and Ladders, Buffers and Passports: Rethinking Poverty, Vulnerability and Wellbeing

By:	Andy Sumner (Institute of Development Studies, Sussex); Rich Mallett (Sussex)
Abstract:	Much research to date has tended to view vulnerability by discipline or sector, yet individuals and households experience multiple, interacting and sometimes compound vulnerabilities. Cross-disciplinary thinking is emerging as multi-dimensional vulnerability is likely to become an increasingly important concept if the outlook over the next 15 to 25 years is one of multiple, interacting and compound stressors and crises, a result of the ?perfect-storm? or ?long-crisis? thesis of the interaction of demographics, climate change and food and energy prices. A realigned analytical lens is thus useful to bring together the various intellectual strands involved in multi-dimensional vulnerability analysis. In light of the above, this paper reviews the literature on vulnerability and asks what a ?three-dimensional human wellbeing? approach?a complement to more traditional ways of understanding poverty?might contribute to the analysis of vulnerability. (?)
Keywords:	Snakes and Ladders, Buffers and Passports: Rethinking Poverty, Vulnerability and Wellbeing
Date:	2011–08
URL:	http://d.repec.org/n?u=RePEc:ipc:wpaper:83&r=hap

General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.

NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.