nep-hap New Economics Papers
on Economics of Happiness
Issue of 2012‒07‒29
six papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Does the market make us happy? The stock market and well-being By Aurora Murgea; Robert Reisz
  2. Life Satisfaction and Air Quality in Europe By Ferreira, Susana; Akay, Alpaslan; Brereton, Finbarr; Cuñado, Juncal; Martinsson, Peter; Moro, Mirko
  3. Inequalities in Access to Employment and the Impact on Wellbeing: A Criterion for Spatial Planning? By Liv Osland; Kenneth Gibb; Gwilym Pryce
  4. Discretion, Productivity and Work Satisfaction By Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M.
  5. Heterogeneity in the relationship between happiness and age: Evidence from the German Socio-Economic Panel By Gregori Baetschmann
  6. What does a well-being perspective add to our understanding of poverty? By Shams, Khadija

  1. By: Aurora Murgea (Department of Finance, Faculty of Economics and Business Administration, West University of Timisoara, Romania); Robert Reisz (Institut für Hochschulforschung an der Martin Luther Universität Halle Wittenberg, Germany; Department of Informatics, Faculty of Matematics and Informatics, West University of Timisoara, Romania)
    Abstract: The present paper studies the relationship between well-being and the stock market in the USA. We find that there is a relationship between well-being and the capital market. Empirical tests, using the Gallupp Healthways Well-being Index, Standard&Poor’s S&P 500 and the VIX volatility index show a strong and statistically significant impact of the stock market on well-being.
    Keywords: well-being, stock market, happiness, uncertainty
    JEL: D60 D53 G10 I31
    Date: 2012–07–09
  2. By: Ferreira, Susana (University of Georgia); Akay, Alpaslan (IZA); Brereton, Finbarr (University College Dublin); Cuñado, Juncal (University of Navarra); Martinsson, Peter (University of Gothenburg); Moro, Mirko (University of Stirling)
    Abstract: Concerns for environmental quality and its impact on people's welfare are fundamental arguments for the adoption of environmental legislation in most countries. In this paper, we analyse the relationship between air quality and subjective well-being in Europe. We use a unique dataset that merges three waves of the European Social Survey with a new dataset on environmental quality including SO2 concentrations and climate in Europe at the regional level. We find a robust negative impact of SO2 concentrations on self-reported life satisfaction.
    Keywords: air quality, SO2 concentrations, subjective well-being, life satisfaction, Europe, European Social Survey, GIS
    JEL: I31 Q51 Q53 Q54
    Date: 2012–07
  3. By: Liv Osland; Kenneth Gibb; Gwilym Pryce
    Abstract: This paper attempts to address three questions: (1) How unequal is access to employment and the wellbeing associated with it? (2) What is the money value consumers place on access to employment? and (3) How does the inequality of access to employment correspond to the geographical pattern of variation in social deprivation? On the basis that house prices, once adjusted for property type and size, reflect variation quality of life across space, econometric estimates of the impact of employment access on house prices can be used to simulate the impact on inequality of wellbeing. With this rationale in mind, we use the Osland and Pryce (2009) house price model to derive an appropriate measure of Access Welfare – the wellbeing associated with locating at a given distance to employment – and to put a money value on that welfare. The model also allows us to incorporate the negative externalities associated with living in close proximity to centres of employment, and the complexities that arise from the existence of multiple employment centres of varying size. We use Gini and Atkinson coefficients and kernel density estimation to analyse the inequalities observed.
    Date: 2011–09
  4. By: Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M.
    Abstract: In Bartling, Fehr and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the impact of discretion on workers’ welfare, confirming that workers earn rents.
    Keywords: high-performance work systems; wages; discretion; gift exchange; job satisfaction
    JEL: M5 J3
    Date: 2012–06
  5. By: Gregori Baetschmann
    Abstract: This paper studies the evolution of life satisfaction over the life course in Germany. It clarifies the causal interpretation of the econometric model by discussing the choice of control variables and the underidentification between age, cohort and time effects. The empirical part analyzes the distribution of life satisfaction over the life course at the aggregated, subgroup and individual level. To the findings: On average, life satisfaction is mildly decreasing up to age fifty-five followed by a hump shape with a maximum at seventy. The analysis at the lower levels suggests that people differ in their life satisfaction trends, whereas the hump shape after age fifty-five is robust. No important differences between men and women are found. In contrast, education groups differ in their trends: highly educated people become happier over the life cycle, where life satisfaction decreases for less educated people.
    Keywords: Aging, life satisfaction, well-being, happiness methodology
    JEL: C23 I31 D91
    Date: 2011–11
  6. By: Shams, Khadija
    Abstract: Drawing on unique survey data for rural Pakistan, we investigate the impact of socio-demographic factors on life satisfaction with particular emphasis on subjective well-being measurement to evaluate poverty and its different components. The data elicits information on overall well-being in terms of households’ satisfaction with the current socio-economic status as well as financial well-being regarding satisfaction with the current income or expenditure. We estimate a happiness model to explore to what extent a well-being perspective adds to our understanding of poverty. We find that the well-being approach closely depicts the idea of capability poverty in terms of the level education and health which both matter significantly. Our results moreover suggest that the proposed financial well-being approach is more promising in capturing both income and capability poverty on subjective grounds. This paper’s main contributions are as follows. First, we link the emerging field of happiness economics with development studies. We believe that this paper fills an important gap in the literature and may well inspire a new holistic look at poverty, beyond the conventional dimension of the lack of income. Second, we intend to challenge the view that poverty is best understood from a more macro-level without properly accounting for individuals’ own valuation of their well-being. Since poverty is often linked with human development, or the lack of it, this paper takes a special look at poverty and suggests that income poverty is only part of the picture.
    Keywords: Well-being measurement; poverty evaluation; life satisfaction; socioeconomic indicators; rural Pakistan
    JEL: O15 R20 I32 O12
    Date: 2012–01

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