nep-hap New Economics Papers
on Economics of Happiness
Issue of 2014‒01‒24
seven papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. A High-Stakes Shift: Turning the Tide From GDP to New Prosperity Indicators By Isabelle CASSIERS; Géraldine THIRY
  2. Adaptation to Poverty in Long-Run Panel Data By Andrew E. Clark; Conchita D'ambrosio; Simone Ghislandi
  3. Home Sweet Home? Macroeconomic Conditions in Home Countries and the Well-Being of Migrants By Akay, Alpaslan; Bargain, Olivier; Zimmermann, Klaus F.
  4. Explaining Well-Being over the Life Cycle: A Look at Life Transitions during Young Adulthood By Switek, Malgorzata
  5. Is Soccer Good for You? The Motivational Impact of Big Sporting Events on the Unemployed By Doerrenberg, Philipp; Siegloch, Sebastian
  6. Home Sweet Home: The Determinants of Residential Satisfaction and its Relation with Well-being By Carlotta Balestra; Joyce Sultan
  7. The economics of happiness and psychology of wealth By Czapinski, Janusz

  1. By: Isabelle CASSIERS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Institut d'analyse du changement dans l'histoire et les sociétés contemporaines (IACCHOS), and FNRS); Géraldine THIRY (Collège d’études mondiales, Fondation Maison des Science de l’Homme, Paris)
    Abstract: For more than half a century, Gross Domestic Product (GDP) has been viewed as the dominant indicator of economic and social progress. Its visibility and increasingly widespread use have contributed to the incorrect identification of economic growth (that is, increased GDP) with improved well-being for all. GDP’s supremacy as an indicator is being challenged, however: around the world, its limits are being questioned and solutions proposed for overcoming them. Given the broadly accepted idea that indicators affect reality, changing them is a high-stakes issue. Potentially, re-fashioning progress indicators may change our representations of the world, redefine our ends, and reinvent the means by which we pursue them. Such a change is part of a complex transformation currently taking place in our economic, social, political ideological systems. The four sections of this paper put forward the argument that the debate over new progress indicators is symptomatic of an historical turning point, and for this reason deserves careful attention. The first section reviews the specific context in which national accounting was established as an economic policy tool rooted in post-war social compromises. The second section discusses the three major justifications for the search for alternative indicators: social goals which economic growth captures inaccurately or not at all; the gap between economic growth and subjective assessments of "life satisfaction"; and, finally, the complex and urgent issue of the environment. The third section presents a concise overview of existing indicators that claim to supplement or replace GDP, dividing them among the three categories of justification described above and demonstrating the inextricable link between methodological and normative questions. From this follows the fourth and final section, which addresses the core questions raised by GDP and the problem of replacing it, and examines the hypothesis that our societies are at an historical turning point in which new compromises are emerging, in ways not yet entirely discernable to social actors.
    Keywords: Beyond GDP, indicators, Sociology of quantification, New Public Management, Redefining prosperity
    JEL: I31 E01 O44 P46
    Date: 2014–01–16
  2. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Conchita D'ambrosio (Université du Luxembourg - Université du Luxembourg); Simone Ghislandi (Università commerciale Luigi Bocconi - Università commerciale Luigi Bocconi)
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 45,800 individuals living in Germany from 1992 to 2011 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any causes of poverty entry which are unambiguously associated with adaptation to poverty.
    Keywords: Income ; Poverty ; Subjective well-being ; SOEP
    Date: 2014–01
  3. By: Akay, Alpaslan (University of Gothenburg); Bargain, Olivier (University of Aix-Marseille II); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: This paper examines whether the subjective well-being of migrants is responsive to fluctuations in macroeconomic conditions in their country of origin. Using the German Socio-Economic Panel for the years 1984 to 2009 and macroeconomic variables for 24 countries of origin, we exploit country-year variation for identification of the effect and panel data to control for migrants' observed and unobserved characteristics. We find strong (mild) evidence that migrants' well-being responds negatively (positively) to an increase in the GDP (unemployment rate) of their home country. That is, we originally demonstrate that migrants regard home countries as natural comparators and, thereby, suggest an original assessment of the migration's relative deprivation motive. We also show that migrants are positively affected by the performances of the German regions in which they live (a 'signal effect'). We demonstrate that both effects decline with years-since-migration and with the degree of assimilation in Germany, which is consistent with a switch of migrants' reference point from home countries to migration destinations. Results are robust to the inclusion of country-time trends, to control for remittances sent to relatives in home countries and to a correction for selection into return migration. We derive important implications for labor market and migration policies.
    Keywords: migrants, well-being, GDP, unemployment, relative concerns/deprivation
    JEL: C90 D63
    Date: 2013–12
  4. By: Switek, Malgorzata (University of Southern California)
    Abstract: Early adulthood is a time of important transitions that shape the future of young adults. How do these transitions affect well-being, and to what degree can they account for the life satisfaction path followed during young adulthood? To answer these questions, longitudinal data from the Swedish Young Adult Panel Study are used for three cohorts interviewed in 1999, 2003, and 2009. Four age intervals covering ages 22 through 40 are constructed. The well-being changes and the main transitions undergone during each age interval are examined. Life satisfaction at ages 22 to 40 follows a slight inverse U-shape peaking around age 30/32 and declining thereafter. The common transition pattern during this time is represented by young adults ages 22 through 30/32 going mainly through partnership (marriage or cohabitation) formation, the school-to-work transition, and the early years of parenting. After age 30 parenting continues as an important life transition, and is joined by an increase in partnership dissolution. This set of transitions alone is found to account for the inverse U-shape of overall life satisfaction. Partnership formation, the school-to-work transition, and parenting younger children are all associated with increasing life satisfaction, mainly through their positive relationship with the financial, and family domains of well-being. After age 30, the monetary burdens, and strains on relationship with partner associated with parenting older children start to set in, and life satisfaction begins to decline.
    Keywords: life satisfaction, young adults, partnership formation, partnership dissolution, parenting, school-to-work transition
    JEL: A12 D60 I31 J10
    Date: 2013–12
  5. By: Doerrenberg, Philipp (University of Cologne); Siegloch, Sebastian (IZA)
    Abstract: We examine the effect of salient international soccer tournaments on the motivation of unemployed individuals to search for employment using the German Socio Economic Panel 1984-2010. Exploiting the random scheduling of survey interviews, we find significant effects on motivational variables such as the intention to work or the reservation wage. Furthermore, the sporting events increase perceived health as well as worries about the general economic situation.
    Keywords: sporting events, soccer, unemployment, well-being
    JEL: D8 J2 J6
    Date: 2014–01
  6. By: Carlotta Balestra; Joyce Sultan
    Abstract: Housing is a core element of people’s material living standards. It is essential to meet basic needs, such as for shelter from weather conditions, and to offer a sense of personal security, privacy and personal space. Good housing conditions are also essential for people’s health and affect childhood development. Further, housing costs make up a large share of the household budget and constitute the main component of household wealth. Residential satisfaction is a broad concept, and is associated with multidimensional aspects including physical, social, and neighbourhood factors, as well as psychological and sociodemographic characteristics of the residents. By taking advantage of two household surveys (the EU-SILC ad hoc module on housing for European countries; and the Gallup World Poll for OECD countries and other major economies), this paper uses ordered probit analysis to explore the link between households’ residential satisfaction and a number of variables related to individuals, the households to which they belong, and the characteristics of the dwelling and neighbourhood where they live. The major findings of this analysis show a complex relationship between residential satisfaction and housing characteristics including neighbourhood’s features. Individual and household socio-demographic characteristics (e.g. age, gender, education) play a secondary role once dwelling and neighbourhood features are controlled for. Understanding the factors that lead to satisfaction with housing and residential environment is key for planning successful and effective housing policies. Le logement est un aspect essentiel des conditions de vie matérielles. Il doit à la fois répondre aux besoins fondamentaux, en offrant notamment un abri contre les intempéries, et donner aux individus un sentiment de sécurité et un espace d’intimité. Les conditions de logement jouent également un rôle capital dans la santé des individus et le développement des enfants. Par ailleurs, le coût du logement représente une part importante du budget des ménages et constitue leur principal patrimoine. La notion de satisfaction vis-à-vis du logement est un concept large, multidimensionnel, et incluant des facteurs physiques et sociaux ainsi que certaines caractéristiques psychologiques et sociodémographiques des résidents. Combinant deux enquêtes différentes sur les conditions de vie des ménages (le module EU-SILC sur le logement et l’enquête Gallup World Poll sur les pays de l’OCDE ainsi que sur les économies majeures), ce papier fait usage d’une analyse en probit ordonné afin d’explorer le lien entre la satisfaction des ménages vis-à-vis de leur logement et un ensemble de facteurs ayant attrait à la situation personnelle des individus ainsi que les caractéristiques de leur logement et de la zone de résidence. Cet article caractérise une relation complexe entre la satisfaction vis-à-vis du logement et ces caractéristiques ainsi que certains aspects du voisinage. Les caractéristiques sociodémographique du ménage (comme l’âge, le genre, le niveau d’éducation…) n’ont finalement qu’un rôle mineur dans l’explication de la satisfaction pour le logement. Une bonne compréhension des facteurs visant à un accroissement de la satisfaction vis-à-vis du logement est essentielle pour l’élaboration de politiques effectives sur le logement.
    Keywords: well-being, housing satisfaction, neighbourhood, surveys, household, bien-être, satisfaction à l’égard du logement, zone de résidence, ménage, enquête
    Date: 2013–12–23
  7. By: Czapinski, Janusz
    Abstract: The “Easterlin paradox” suggests that there is no link between the economic development of a society and the overall happiness of its members, yet wealthy societies and people are happier than those with low income. Using recent data from Social Diagnosis ( and several surveys on a broader array of countries, I verify a few hypotheses on the relationship between income and psychological well-being at micro and macro levels. The main factor which differentiates the pattern of relationship is the level of income. In poor societies and individuals, income affects well-being but in wealthy societies and individuals, the direction of the relationship is reversed: well-being determines income. Money buys happiness when income is too low to satisfy basic needs, and happiness brings money when income satisfies basic needs.
    Keywords: psychological well-being, happiness, income, economic development
    JEL: I31
    Date: 2013–12

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