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on Economics of Happiness |
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Issue of 2013‒08‒05
four papers chosen by |
| By: | Hannes Schwandt |
| Abstract: | A large literature in behavioral and social sciences has found that human wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find people to err systematically in predicting their life satisfaction over the life cycle. They expect -- incorrectly -- increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to -4.5% at age 68, they are stable over time and observed across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing. |
| Keywords: | Life satisfaction, expectations, aging |
| JEL: | A12 I30 D84 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1229&r=hap |
| By: | Michalis Drouvelis; Nattavudh Powdthavee |
| Abstract: | What determines people's moral judgments of selfish behaviors? Here we study whether people's normative views in trust and gift exchange games, which underlie many situations of economic and social significance, are themselves functions of positive emotions. We used experimental survey methods to investigate people's moral judgments empirically, and explored whether we could influence subsequent judgments by deliberately making some individuals happier. We found that moral judgments of selfish behaviors in the economic context depend strongly on other people's behaviors, but their relationships are significantly moderated by an increase in happiness for the person making the judgment. |
| Keywords: | Happiness, moral judgments, trust games, gift exchange games |
| JEL: | C91 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1231&r=hap |
| By: | Daniel Fujiwara |
| Abstract: | Subjective wellbeing data is becoming increasingly popular in economics research. The wellbeing valuation approach uses wellbeing data instead of data gleaned from preferences to attach monetary values to non-market goods. This method could be an important alternative to preference-based valuation methods such as contingent valuation, but there are a number of significant technical deficiencies with the current methodology. It is argued that the current method derives biased estimates of the value of non-market goods. The paper presents Three-Stage Wellbeing Valuation, a new approach to valuation using subjective wellbeing data that solves for the main technical problems and as a result derives estimates of welfare change and value that are consistent with welfare economic theory. As an example, I derive robust values associated with unemployment using the new approach and compare these to biased values derived from the standard wellbeing valuation method. Values derived from Three-Stage Wellbeing Valuation can be used in cost-benefit analysis. |
| Keywords: | subjective wellbeing, non-market valuation, cost-benefit analysis, unemployment, causal inference |
| JEL: | C39 D6 D61 I31 J68 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1233&r=hap |
| By: | Zhiming Cheng; Russell Smyth; Haining Wang |
| Abstract: | This study explores the relationship between home ownership and subjective wellbeing in urban China using a nationally representative dataset. Compared with the limited extant literature on this topic for China, we use a more recent dataset, allow for a greater range of ownership forms, consider the source through which ownership was acquired and not only consider whether homeowners have a home loan, but also consider the source of the loan and its effect on subjective wellbeing. We find that not only home ownership, but the property rights one acquires and the source of those property rights matters for subjective wellbeing. Moreover, not only whether one has a home loan, but the type of home loan one has matters for subjective wellbeing. We also identify important differences in the homeownership-subjective wellbeing relationship across genders, generations and between those with a rural and urban household registration. |
| Keywords: | Subjective wellbeing, housing, China |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2013-39&r=hap |