nep-hap New Economics Papers
on Economics of Happiness
Issue of 2013‒10‒18
eleven papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Does income deprivation affect people’s mental well-being? By Maite Blázquez Cuesta; Santiago Budría
  2. The impact of migration on children left behind in Moldova By Gassmann, Franziska; Siegel, Melissa; Vanore, Michaella; Waidler, Jennifer
  3. Scitovsky, behavioural economics, and beyond By Pugno, Maurizio
  4. The Emotional Timeline of Unemployment: Anticipation, Reaction, and Adaption By Christian von Scheve; Frederike Esche; Jürgen Schupp
  6. The Gender Earnings Gap: Measurement and Analysis By Esfandiar Maasoumi; Le Wang
  7. Measuring the Monetary Value of Social Relations: a Hedonic Approach By Emilio Colombo; Luca Stanca
  8. Methodological Developments in Human Development Literature By Nayak, Purusottam
  9. Day-of-the-Week Effects in Subjective Well-Being : Does Selectivity Matter? By Semih Tumen; Tugba Zeydanli
  10. Social Relationships in Later Life: The Role of Childhood Circumstances By Sarah Gibney; Mark E. McGovern; Erika Sabbath
  11. Nuclear Accidents and Policy: Notes on Public Perception By Felix Richter; Malte Steenbeck; Markus Wilhelm

  1. By: Maite Blázquez Cuesta (Universidad Autónoma de Madrid); Santiago Budría (CEEAPLA, IZA and Banco de ESpaña)
    Abstract: This paper uses panel data from the 2002-2010 waves of the German Socio-Economic Panel dataset (SOEP) to assess the impact of income deprivation upon individual mental well-being. Unobserved heterogeneity is controlled for by means of a random effects model extended to include a Mundlak term and explicit controls for the respondents’ personality traits. The paper shows that, for a given household income, a less favourable relative position in the income distribution is associated with lower mental well-being. This effect is not statistically significant among women, though. Among men, a one standard deviation increase in income deprivation is found to be as harmful as a reduction in permanent household income of almost 30%. Interestingly, this impact is found to differ among individuals endowed with different sets of non-cognitive skills. We suggest that policies, practices and initiatives aimed at improving well-being among European citizens require a better understanding of individuals’ sensitiveness to others’ income.
    Keywords: mental health, random effects model, deprivation, personality traits
    JEL: C23 D63 I10 I14
    Date: 2013–10
  2. By: Gassmann, Franziska (UNU-MERIT/MGSoG); Siegel, Melissa (UNU-MERIT/MGSoG); Vanore, Michaella (UNU-MERIT/MGSoG); Waidler, Jennifer (UNU-MERIT/MGSoG)
    Abstract: This paper empirically evaluates the well-being of children "left behind" by migrant household members in Moldova. Using data derived from a nationally-representative, large-scale household survey conducted between September 2011 and February 2012 among 3,255 households (1,801 of which contained children aged 0-17) across Moldova, different dimensions of child well-being are empirically evaluated. Well-being of children in Moldova is divided into eight different dimensions, each of which is comprised of several indicators. Each indicator is examined individually and then aggregated into an index. Well-being outcomes are then compared by age group, primary caregiver, migration status of the household (current migrant, return migrant, or no migration experience), and by who has migrated within the household. It was found that migration in and of itself is not associated with negative outcomes on children's well-being in any of the dimensions analysed, nor does it matter who in the household has migrated. Children living in return migrant households, however, attain higher rates of well-being in specific dimensions like emotional health and material well-being. The age of the child and the material living standards experienced by the household are much stronger predictors of well-being than household migration status in a number of different dimensions. The results suggest that migration does not play a significant role in shaping child well-being outcomes, contrary to the scenarios described in much past research. This paper is the first (to the authors' knowledge) to link migration and multidimensional child poverty.
    Keywords: Moldova, migration, poverty, child poverty, multi-dimensional poverty
    JEL: I32 F22 J61 O15
    Date: 2013
  3. By: Pugno, Maurizio
    Abstract: By revisiting Scitovsky's work on well-being, which introduces 'novelty' into the consumer's option set as a peculiar source of satisfaction, this paper finds a number of connections with the recent behavioural economics so as to open new lines on inquiry. First, similarly to behavioural economics, Scitovsky used psychology to interpret sub-optimal choices. However, his welfare benchmark is different from rational choice, as understood by the economists, because 'novelty' implies a very strong form of uncertainty, as well as learning. Second, Scitovsky contributed to further elaboration of the two-systems framework put forward by Kahneman's recent book, which attempts to base behavioural economics on new foundations. Third, Scitovsky anticipated and contributed to specific analytical issues that have been studied in behavioural economics, such as the role of people's skill in uncertainty, the unpredictability of taste changes, and harmful addiction. --
    Keywords: Scitovsky,behavioural economics,novelty,consumption skill,strong uncertainty,harmful addiction
    JEL: B31 D03 D11
    Date: 2013
  4. By: Christian von Scheve; Frederike Esche; Jürgen Schupp
    Abstract: Unemployment continues to be one of the major challenges in industrialized societies. Aside from its economic dimensions and societal repercussions, questions concerning the individual experience of unemployment have recently attracted increasing attention. Although many studies have documented the detrimental effects of unemployment for subjective well-being, they overwhelmingly focus on life satisfaction as the cognitive dimension of well-being. Little is known about the emotional antecedents and consequences of unemployment. We thus investigate the impact of unemployment on emotional well-being by analyzing the frequency with which specific emotions are experienced in anticipation of and reaction to job loss. Using longitudinal data of the German Socio-Economic Panel (SOEP) and fixed effects regressions, we find that becoming unemployed leads to more frequent experiences of unpleasant emotions only in the short run and that adaptation occurs more rapidly as compared to life satisfaction. Contrary to existing studies, we find decreases on emotional well-being but not in life satisfaction in anticipation of unemployment.
    Keywords: Unemployment, emotions, well-being, life satisfaction, SOEP
    JEL: A14 D63 J17
    Date: 2013
    Abstract: We propose a new technique for identication and estimation of aggregation functions in multidimensional evaluations and multiple indicator settings. These functions may represent \latent" objects. They occur in many dierent contexts, for instance in propensity scores, multivariate measures of well-being and the related analysis of inequality and poverty, and in equivalence scales. Technical advances allow nonparametric inference on the joint distribution of continuous and discrete indicators of well-being, such as income and health, conditional on joint values of other continuous and discrete attributes, such as edu- cation and geographical groupings. In a multiattribute setting, \quantiles" are \frontiers" that dene equivalent sets of covariate values. We identify these frontiers nonparametrically at rst. Then we suggest \parametrically equivalent" characterizations of these frontiers that reveal likely weights for, and substitutions between dierent attributes for dierent groups, and at dierent quantiles. These estimated parametric functionals are \ideal" ag- gregators in a certain sense which we make clear. They correspond directly to measures of aggregate well-being popularized in the earliest multidimensional inequality measures in Maasoumi (1986). This new approach resolves a classic problem of assigning weights to multiple indicators such as dimensions of well-being, as well as empirically incorporating the key component in multidimensional analysis, the relationship between the indicators. It introduces a new way for robust estimation of \quantile frontiers", allowing \complete" assessments, such as multidimensional poverty measurements. In our substantive applica- tion, we discover extensive heterogeneity in individual evaluation functions. This leads us to perform robust, weak uniform rankings as aorded by tests for multivariate stochas- tic dominance. A demonstration is provided based on the Indonesian data analyzed for multidimensional poverty in Maasoumi & Lugo (2008).
    Date: 2013–08
  6. By: Esfandiar Maasoumi; Le Wang
    Abstract: This paper presents a set of complementary tools for measurement and analysis of the gender gap that move beyond the simple moment-based comparison of the earnings distributions. In particular, we propose a new measure of the gender gap based on the the distance between two whole distributions, instead of their specific parts. We also introduce tests based on stochastic dominance to allow for robust welfare comparisons of the earnings distributions between men and women. Using the Current Population Survey data, we first construct a new series on the gender gap from 1976 to 2011 in the United States. We find that traditional moment-based measures severely underestimate the declining trend of the gender gap during this period. More important, these traditional measures do not necessarily reflect the cyclicality of the gender differentials in earnings distributions, and thus may even lead to a false conclusion about how labor market conditions are related to the gender gap at the aggregate level. Second, we find that stochastic dominance (or a clear ranking of the earnings distributions) is rare, and that instances in which we do find stochastic dominance appear to be disproportionately concentrated in the pre-welfare reform period and related to economic recessions. Finally, our counterfactual analysis show that in most cases neither changing earnings structure nor changing human capital characteristics would necessarily improve women’s well-being uniformly in the society.
    Date: 2013–08
  7. By: Emilio Colombo; Luca Stanca
    Abstract: This paper presents an application of the hedonic approach to measure the monetary price of social relations. We use individual-level data for housing and labor markets in 103 Italian cities to estimate the price of relational amenities and construct monetary indexes of quality of relational life. We focus on time spent with friends, active participation in associations and frequency of going out for leisure activities, while controlling for standard amenities such as weather, environment, services, and socio-demographic characteristics. We find that individuals are willing to pay a positive and significant monetary price to live in cities where people spend more time with their friends. A one standard deviation increase in the share of those who meet their friends most frequently is worth an extra \euro 1,150 per year in terms of higher housing costs and foregone wages.
    Keywords: social relations, social capital, hedonic prices, quality of life, well-being
    JEL: A13 C4 D6 I31 R2 Z13
    Date: 2013–10
  8. By: Nayak, Purusottam
    Abstract: The present paper is a review of methodological advancements in human development literature starting from 1990 till date. While highlighting the contribution of UNDP to the concept of human development and construction of HDI it mentions that the introduced concept and method of measurement is a huge qualitative improvement over the earlier concept of growth and per capita GDP measurement. Although the human development report started with a poor methodology, thanks to the galaxy of scholars for their untiring efforts and invaluable contributions in the successive years that enabled UNDP in refining its methodology to a large extent. There is no denying fact that there is no end to refinements, the purpose for which Mahbub ul Haq struggled in his entire life has been served.
    Keywords: Human Development, Human Development Index, Methodological change
    JEL: O1
    Date: 2013–10–13
  9. By: Semih Tumen; Tugba Zeydanli
    Abstract: Individuals tend to self-report higher well-being levels on certain days of the week than they do on the remaining days, controlling for observables. Using the 2008 release of the British Household Panel Survey, we test whether this empirical observation suffers from selection bias. In other words, we examine if subjective well-being is correlated with unobserved characteristics that lead the individuals to take the interview on specific days of the week. We focus on two distinct well-being measures : job satisfaction and happiness. We provide convincing evidence for both of these measures that the interviews are not randomly distributed across the days of the week. In other words, individuals with certain unobserved characteristics tend to take the interviews selectively. We conclude that a considerable part of the day-of-the-week patterns can be explained by a standard \non-random sorting on unobservables" argument rather than \mood uctuations". This means that the day-of-the-week estimates reported in the literature are likely to be biased and should be treated cautiously.
    Keywords: Day-of-the-week effects; subjective well-being; self-selection; treatment effects; BHPS
    JEL: C25 D60 J28
    Date: 2013
  10. By: Sarah Gibney (University College Dublin); Mark E. McGovern (Harvard Center for Population and Development Studies); Erika Sabbath (Harvard Center for Population and Development Studies)
    Abstract: Social relationships predict health and emotional wellbeing across the life course. However, it is not known whether gradients in social engagement, social network size or quality in later life mirror socio-economic and health gradients in childhood. This study investigates the long-term impact of childhood circumstances on social relationships. Data are from the Survey of Health, Aging and Retirement in Europe; a panel survey of people aged 50+. Current social network attributes (size, satisfaction and emotional closeness) and retrospective life history data on childhood health, cognition, SES, and parental characteristics are utilized. Regression analysis indicates that childhood circumstances predict social network attributes in later life. Emotional closeness partly mediates the relationship between childhood circumstances and social network satisfaction. A strong but differential association between aspects of childhood circumstance and social network attributes was evident. Therefore we critique the index measurement approach which conflates diverse pathways linking childhood and late-life outcomes.
    Keywords: Social relationships, Ageing, Europe, Childhood conditions, Life course
    JEL: J14 I10 Z13
    Date: 2013–10–10
  11. By: Felix Richter; Malte Steenbeck; Markus Wilhelm
    Abstract: Major nuclear accidents as recently in Fukushima set nuclear power plant security at the top of the public agenda. Using data of the German Socio-Economic Panel we analyze the effects of the Fukushima accident and a subsequent government decision on nuclear power phase-out on several measures of subjective perception in Germany. In the light of current political debates about the strategic orientation of this energy turnaround, such an analysis is of particular interest since non-pecuniary gains in measures of subjective perception might provide further aspects to be taken into consideration when evaluating the economic costs of the policy. We find that the Fukushima accident increases the probability to report greater worries about the environment. Furthermore, we find evidence for a decrease in the probability to be very worried about the security of nuclear power plants as well as for an increase in reported levels of subjective well-being following the government's resolution on nuclear phase-out. Finally we find that the probabilities of reporting very high concerns are related to the distance between the respondents' place of residence and the nearest nuclear power station.
    Keywords: Fukushima, nuclear accident, nuclear energy, nuclear phase-out, environment, subjective perception
    JEL: I3 N7 Q4 R1
    Date: 2013

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