New Economics Papers
on Economics of Happiness
Issue of 2013‒04‒13
four papers chosen by

  1. The New Stylized Facts About Income and Subjective Well-Being By Sacks, Daniel W.; Stevenson, Betsey; Wolfers, Justin
  2. World Human Development: 1870-2007 By Prados de la Escosura, Leandro
  3. Sociability is like skiing: multiple equilibria in education, sociability and life satisfaction By Becchetti, Leonardo; Solferino , Nazaria; Tessitore, M. Elisabetta
  4. Sociability, Altruism and Subjective Well-Being By Leonardo Becchetti; Luisa Corrado; Pierluigi Conzo

  1. By: Sacks, Daniel W.; Stevenson, Betsey; Wolfers, Justin
    Abstract: In recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related.
    Keywords: adaptation; Easterlin paradox; economic growth; life satisfaction; quality of life; subjective well-being
    JEL: D6 I3 J1 O1
    Date: 2013–01
  2. By: Prados de la Escosura, Leandro
    Abstract: How has wellbeing evolved over time and across regions? How does the West compare to the Rest? What explains their differences? These questions are addressed using an historical index of human development. A sustained improvement in wellbeing has taken place since 1870. The absolute gap between OECD and the Rest widened over time, but an incomplete catching up –largely explained by education- has occurred since 1913 but fading away after 1970, when the Rest fell behind the OECD in terms of longevity. As the health transition was achieved in the Rest, the contribution of life expectancy to human development improvement declined. Meanwhile, in the OECD, as longevity increased, healthy years expanded. A large variance in human development is noticeable in the Rest since 1970, with East Asia, Latin America and North Africa catching up to the OECD, while Central and Eastern Europe and Sub-Saharan Africa falling behind.
    Keywords: Education; HDI; Human Development; Life Expectancy; Wellbeing
    JEL: I00 N30 O15 O50
    Date: 2013–01
  3. By: Becchetti, Leonardo (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Solferino , Nazaria (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Tessitore, M. Elisabetta (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: Empirical evidence documents that other regarding activities (voluntary/charity work, helping friends/neighbours) done with other regarding motivations contribute positively and signi cantly to subjective wellbeing. The question is why only a re- stricted group of people performs these activities with such motivations if doing so adds up to satisfaction in life. We develop a model in which individual's utility grows in the consumption of a stimulus" goods which may however be enjoyed only with a su cient level of investment in civic capital. The stimulus good (a contingent good produced by the interaction of an action with a motivation) is represented by the perfor- mance of other regarding activities with other regarding motivations and civic capital may be accumulated through education. The model has multiple equilibria since more patient individuals accumulate along their lives enough civic capital which allows them to enjoy such goods. Less patient individuals do not accumulate enough civic capital and therefore cannot enjoy performing these activities even if they observe others doing so. We test our theoretical predictions by comparing a group of Europeans aged above 50 who performs other regarding activities with other regarding motivations with a group of the same age which does not perform such activities. Parametric and non parametric tests document that the rst group has signi cantly more schooling years coupled with higher cognitive and eudaimonic life satisfaction. Our results are robust to several checks among which health shocks, variations in local social norms and con- sistent with the procedural utility hypothesis arguing that not only outcome but also all other circumstances of action matter for subjective wellbeing.
    Keywords: sociability; education; life satisfaction
    JEL: A13 D13 D64
    Date: 2013–03–27
  4. By: Leonardo Becchetti (University of Rome "Tor Vergata"); Luisa Corrado (University of Rome "Tor Vergata"); Pierluigi Conzo (University of Turin)
    Abstract: We provide non experimental evidence of the relevance of sociability on subjective wellbeing by investigating the determinants of life satisfaction on a large sample of Europeans aged above 50. We document that voluntary work, religious attendance, helping friends/neighbours and participation to community-related organizations affect positively and significantly life satisfaction. We illustrate the different impact that some sociability variables have on eudaimonic versus cognitive measures of subjective wellbeing. Our empirical findings discriminate among other regarding and self-regarding preferences as rationales explaining such behaviour. We document that different combinations between actions and motivations have different impact on life satisfaction thereby providing support for the relevance of these specific “contingent goods” and to the literature of procedural utility. Our findings are confirmed in robustness checks including refinements of the dependent variable, instrumental variables and sensitivity analysis on departures from the exogeneity assumption.
    Keywords: sociability, altruism, other-regarding activities, other regarding motivations, life satisfaction, subjective well-being.
    JEL: A13 D13 D64
    Date: 2013–03–29

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