New Economics Papers
on Economics of Happiness
Issue of 2013‒04‒20
five papers chosen by

  1. Understanding Determinants of Happiness under Uncertainty By Peter Huxley; Tapas Mishra; Bazoumana Ouattara; Mamata Parhi
  2. On the Foundations of Well-Being Economics and Policy By Giuseppe Munda
  3. Income Comparison, Income Formation, and Subjective Well-Being: New Evidence on Envy versus Signaling By Heinz Welsch; Jan Kühling
  4. Children’s Subjective Well-being in Rich Countries By Jonathan Bradshaw; Bruno Martorano; Chris De Neubourg; Luisa Natali; UNICEF Innocenti Research Centre
  5. European capitals of culture and life satisfaction By Lasse Steiner; Bruno S. Frey; Simone Hotz

  1. By: Peter Huxley (Mental Health Research Team, Swansea University, UK); Tapas Mishra (Department of Economics, Swansea University, UK); Bazoumana Ouattara (Department of Economics, Swansea University, UK); Mamata Parhi (Department of Economics, Swansea University, UK)
    Date: 2013
  2. By: Giuseppe Munda (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona)
    Abstract: When one wishes to implement public policies, there is a previous need of comparing different actions and valuating and evaluating them to assess their social attractiveness. Recently the concept of well-being has been proposed as a multidimensional proxy for measuring societal prosperity and progress; a key research topic is then on how we can measure and evaluate this plurality of dimensions for policy decisions. This paper defends the thesis articulated in the following points: 1. Different metrics are linked to different objectives and values. To use only one measurement unit (on the grounds of the so-called commensurability principle) for incorporating a plurality of dimensions, objectives and values, implies reductionism necessarily. 2. Point 1) can be proven as a matter of formal logic by drawing on the work of Geach about moral philosophy. This theoretical demonstration is an original contribution of this article. Here the distinction between predicative and attributive adjectives is formalised and definitions are provided. Predicative adjectives are further distinguished into absolute and relative ones. The new concepts of set commensurability and rod commensurability are introduced too. 3. The existence of a plurality of social actors, with interest in the policy being assessed, causes that social decisions involve multiple types of values, of which economic efficiency is only one. Therefore it is misleading to make social decisions based only on that one value. 4. Weak comparability of values, which is grounded on incommensurability, is proved to be the main methodological foundation of policy evaluation in the framework of well-being economics. Incommensurability does not imply incomparability; on the contrary incommensurability is the only rational way to compare societal options under a plurality of policy objectives. 5. Weak comparability can be implemented by using multi-criteria evaluation, which is a formal framework for applied consequentialism under incommensurability. Social Multi-Criteria Evaluation, in particular, allows considering both technical and social incommensurabilities simultaneously.
    Keywords: Value Theory, Incommensurability, Public Policy, Sustainability, Cost-Benefit Analysis, Multiple Criteria Evaluation, Complexity Theory
    JEL: A13 C44 D46 E01 H43 Q58
    Date: 2013–04
  3. By: Heinz Welsch (University of Oldenburg, Department of Economics); Jan Kühling (University of Oldenburg, Department of Economics)
    Abstract: Drawing on the distinction between envy and signaling effects in income comparison, this paper uses 307,465 observations for subjective well-being and its covariates from Germany, 1990-2009, to study whether the nature of income comparison has changed in the process of economic development, and how such changes are related to changes in the nature of income formation. By conceptualizing a person’s comparison income as the income predicted by an earnings equation, we find that, while in 1990-1999 envy has been the dominant concern in West Germany and signaling the dominant factor in East Germany, income comparison was non-existing in 2000-2009. We also find that the earnings equation reflects people’s ability more accurately in the second than in the first period. Together, these findings suggest that comparing one’s income with people of the same ability is important only when ability is insufficiently reflected in own income.
    Keywords: income comparison; envy; signaling; subjective well-being; income formation
    JEL: D31 I31 J31 P36 Z13
    Date: 2013–04
  4. By: Jonathan Bradshaw; Bruno Martorano; Chris De Neubourg; Luisa Natali; UNICEF Innocenti Research Centre
    Abstract: Changes in subjective well-being during the last decade are analysed. The paper then explores the relationships between subjective well-being and objective domains: material, health, education, behaviour and housing and environment. The relationship between subjective well-being and structural indicators is explored further. The paper concludes that subjective well-being should be included in comparative studies of well-being but not necessarily as just another domain within a general deprivation count. Subjective well-being (or the lack thereof) is related to but not a part of (material) child deprivation.
    Keywords: child related policies; child well-being; comparative analysis; industrialized countries;
    JEL: A1
    Date: 2013
  5. By: Lasse Steiner; Bruno S. Frey; Simone Hotz
    Abstract: This paper analyzes whether hosting the most prestigious European cultural event, the European Capital of Culture, has an impact on regional economic development or the life satisfaction of the local population. Concerning the economic impact, we show that European Capitals are hosted in regions with above average GDP per capita, but do not causally affect the economic development in a significant way. Even a positive impact on GDP per capita would not imply a positive impact on individual utility or social welfare of the regional population. Surprisingly, using difference-in-difference estimations, a negative effect on the well-being of the regional population is found during the event. Since no effect is found before the event, reverse causality and positive anticipation can be ruled out. The negative effect during the event might result from dissatisfaction with the high levels of public expenditure, transport disruptions, general overcrowding or an increase in housing prices.
    Keywords: Life Satisfaction, mega-events, culture, european capital of culture
    JEL: H40 H54 R12 Z11
    Date: 2013–04

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