|
on Economics of Happiness |
|
Issue of 2014‒03‒08
four papers chosen by |
| By: | Martina Grunow (University of Augsburg, Department of Economics) |
| Abstract: | Several contributions to the literature have shown that the perception of the individual employment status depends on the surrounding unemployment rate. We argue that expectations are a possible link between unemployment rates and the individual employment status regarding changes in mental well-being. Theoretical foundation comes from models for reference-dependent preferences with endogenous reference points. We provide a simple theoretical model to motivate and structure the empirical analysis. Using data from the German Socio-Economic Panel, we estimate a pairwise interacted model for employment status and expectations over two time periods. Life satisfaction is used as a proxy for mental well-being. To identify a causal effect of unemployment, expectations and their interactions on mental well-being, the analysis relies on fixed effects and exogenous entries into unemployment due to plant closures. We confirm the standard result that unemployment has a negative effect on mental well-being. Furthermore, the results deliver empirical evidence for reference-dependent effects of unemployment on mental well-being. We find that becoming unemployed unexpectedly is more severe as if the unemployment was expected. Therefore, this paper contributes to the understanding of how mental well-being is affected by unemployment and delivers empirical support for the theoretical models of reference-dependent preference wit endogenous reference points determined by expectations. |
| Keywords: | Subjective Well-Being, Unemployment, Reference-Dependence, Reference Points |
| JEL: | C23 D03 D84 I10 I18 J01 J60 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0323&r=hap |
| By: | John Knight; Ramani Gunatilak |
| Abstract: | The empirical literature on the economics of happiness has grown rapidly, and much has been learned about the determinants of subjective well-being. Less attention has been paid to its normative implications. Taking China as a case study, this paper first summarises empirical results on the determinants of subjective well-being and then considers whether that evidence can be used for social evaluation. Different criteria for social evaluation give very different answers: on the one hand, real income per capita and the human development index have risen rapidly in recent years but, on the other hand, subjective well-being appears not to have risen at all. Ultimately a value judgement is required: arguments are presented for and against including subjective well-being, either alone or with other criteria, in the social welfare function. |
| Keywords: | Capabilities; China; Happiness; Human development; Social evaluation; Subjective well-being |
| JEL: | D03 D63 O15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-09&r=hap |
| By: | Gundi Knies; Alita Nandi; Lucinda Platt |
| Abstract: | Using a rich, nationally representative data set with a large sample of minorities and matched small area characteristics, we explore differences in life satisfaction for ethnic groups living in UK. We test the hypothesis that minorities will be less satisfied, which will in part be explained by less favourable individual and area contexts, but that living in areas with a larger proportion of own ethnic group promotes well-being. We find that satisfaction is lower among minorities, ceteris paribus, but area concentration is associated with higher life satisfaction for certain groups. We discuss the implications of our findings. |
| Keywords: | life satisfaction; happiness; ethnic group; neighbourhood; subjective wellbeing; UKHLS |
| JEL: | I31 J15 O15 R23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55669&r=hap |
| By: | Hou, Feng |
| Abstract: | An emerging area of subjective well-being (SWB) research is centered on the differences in the levels of SWB both across countries and among geographic regions within a country. The consideration of geographic differences would extend our knowledge about the determinants of SWB from "internal" factors of personality traits and individuals' socio-demographic characteristics to "external factors" embedded in individuals' environments. An issue with important theoretical and policy implications is whether the income of others in the same geographic area is associated with individuals' SWB. The association could be positive if people benefit from the improved resources, amenities, and social capital in high-income areas. The association could also be negative if people tend to emulate the lifestyles of their more affluent neighbours. Related empirical studies so far have not come to a consensus on this question. The present study attempts to contribute to this issue in two significant ways. First, this study examines whether the effect of the average income in a geographic area (locality income) on SWB is sensitive to the scale of geographic units. With a very large sample of survey respondents nested within three hierarchical levels of geographic areas, this study provides reliable estimates of the association of SWB with average incomes in immediate neighbourhoods (defined as "census dissemination areas"), local communities ("census tracts"), and municipalities ("census subdivisions"). Second, this study examines how the choice of control variables influences the estimated effect of locality income. By considering the effects of individual demographic and socioeconomic characteristics, self-evaluated general health, and area-level attributes in a sequential manner, it is possible to discuss the likely mechanisms through which locality income is related to individuals' SWB. |
| Keywords: | Health, Income, pensions, spending and wealth, Mental health and well-being, Household, family and personal income |
| Date: | 2014–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2014357e&r=hap |