New Economics Papers
on Economics of Happiness
Issue of 2014‒05‒17
eight papers chosen by

  1. Is Soft Paternalism Ethically Legitimate? - The Relevance of Psychological Processes for the Assessment of Nudge-Based Policies By Mira Fischer; Sebastian Lotz
  2. Online and offline social participation and social poverty traps. Can social networks save human relations? By A. Antoci; F. Sabatini; M. Sodini
  3. "Autonomy-enhancing Paternalism" By Martin Binder; Leonhard K. Lades
  4. Economic Well-being and Anti-Semitic, Xenophobic, and Racist Attitudes in Germany By Naci H. Mocan; Christian Raschke
  5. Human well-being and in-work benefits: a randomized controlled trial By Dr Richard Dorsett
  6. Employment status and perceived health condition: longitudinal data from Italy By Minelli, Liliana; Pigini, Claudia; Chiavarini, Manuela; Bartolucci, Francesco
  7. The economics of happiness and anger in North Africa By Chamlou, Nadereh
  8. Women's empowerment and socio-economic outcomes : impacts of the Andhra Pradesh rural poverty reduction program By Prennushi, G.; Gupta, A.

  1. By: Mira Fischer (University of Cologne); Sebastian Lotz (Stanford University)
    Abstract: In this article we develop a taxonomy of behavioral policy measures proposed by Thaler and Sunstein (2008). Based on this taxonomy, we discuss the ethical legitimacy of these measures. First, we explain two common reservations against nudges (choice architecture) rooted in utilitarian and Kantian ethics. In addition to wellbeing, we identify freedom of action and freedom of will (autonomy) as relevant ethical criteria. Then, using practical examples, we develop a taxonomy that classifies nudges according to the psychological mechanisms they use and separately discuss the legitimacy of several types of behavioral policy measures. We hope to thereby make a valuable contribution to the debate on the ethical legitimacy of behavioral policy making.
    Date: 2014–05–09
  2. By: A. Antoci; F. Sabatini; M. Sodini
    Abstract: In this study, we develop an evolutionary game model to analyse how human relations evolve in a context characterised by declining face-to-face interactions and growing online social participation. Our results suggest that online networks may constitute a coping response allowing individuals to “defend” their social life from increasing busyness and a reduction in the time available for leisure. Internet-mediated interaction can play a positive role in preventing the disruption of ties and the weakening of community life documented by empirical studies. In this scenario, the digital divide is likely to become an increasingly relevant factor of social exclusion, which may exacerbate inequalities in well-being and capabilities.
    Keywords: well-being, social participation, social capital, online networks, digital divide
    JEL: Z13 O33 D85 C73
    Date: 2014
  3. By: Martin Binder; Leonhard K. Lades
    Abstract: Behavioral economics has shown that individuals sometimes make decisions that are not in their best interests. This insight has prompted calls for behaviorally informed policy interventions popularized under the notion of "libertarian paternalism." This type of "soft" paternalism aims at helping individuals without reducing their freedom of choice. We highlight three problems of libertarian paternalism: the difficulty of detecting what is in the best interest of an individual, the focus on freedom of choice at the expense of a focus on autonomy, and the neglect of the dynamic effects of libertarian-paternalistic policy interventions. We present a form of soft pa-ternalism called "autonomy-enhancing paternalism" that seeks to constructively remedy these problems. Autonomy-enhancing paternalism suggests using insights from subjective well-being research in order to determine what makes individuals better off. It imposes an additional con-straint on the set of permissible interventions highlighting the importance of autonomy in the sense of the capability to make critically reflected (i.e., autonomous) decisions. Finally, it acknowledges that behavioral interventions can change the strength of individual decision-making anomalies over time as well as influence individual preference learning. We illustrate the differences between libertarian paternalism and autonomy-enhancing paternalism in a sim-ple formal model in the context of optimal sin nudges.
    Keywords: Libertarian Paternalism; Behavioral Economics; Subjective Well-Being; Autonomy; Preference Learning; Welfare Economics
    JEL: B52 D18 D63 I18
    Date: 2014–05
  4. By: Naci H. Mocan; Christian Raschke
    Abstract: The fear and hatred of others who are different has economic consequences because such feelings are likely to translate into discrimination in labor, credit, housing, and other markets. The implications range from earnings inequality to intergenerational mobility. Using German data from various years between 1996 and 2010, we analyze the determinants of racist and xenophobic feelings towards foreigners in general, and against specific groups such as Italians and Turks. We also analyze racist and anti-Semitic feelings towards German citizens who differ in ethnicity (Aussiedler from Eastern Europe) or in religion (German Jews). Individuals’ perceived (or actual) economic well-being is negatively related to the strength of these feelings. Education, and having contact with foreigners mitigate racist, anti-Semitic and xenophobic feelings. People who live in states which had provided above-median support of the Nazi party in the 1928 elections have stronger anti-Semitic feelings today. The results are not gender-driven. They are not an artifact of economic conditions triggering feelings about job priority for German males, and they are not fully driven by fears about foreigners taking away jobs. The results of the paper are consistent with the model of Glaeser (2005) on hate, and with that of Akerlof and Kranton (2000, 2005) on identity in the utility function.
    JEL: I30 J15 Z1
    Date: 2014–04
  5. By: Dr Richard Dorsett
    Abstract: Many politicians believe they can intervene in the economy to improve people’s lives.  But can they?  In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people.  We follow a sub-sample of 3,500 single parents for 5 ensuing years.  The results reveal a remarkable, and troubling, finding.  Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt.  Thus helping people apparently hurt them.  We discuss a behavioral framework consistent with our findings and reflect on implications for policy.
    Date: 2014–02
  6. By: Minelli, Liliana; Pigini, Claudia; Chiavarini, Manuela; Bartolucci, Francesco
    Abstract: The considerable increase of non-standard labor contracts, unemployment and inactivity rates raises the question of whether job insecurity and the lack of job opportunities affect physical and mental well-being differently from being employed with an open-ended contract. In this paper we offer evidence on the relationship between Self Reported Health Status (SRHS) and the employment status in Italy using the Survey on Household Income and Wealth; another aim is to investigate whether these potential inequalities have changed with the recent economic downturn (time period 2006-2010). We estimate an ordered logit model with SRHS as response variable based on a fixed-effects approach which has certain advantages with respect to the random-effects formulation and has not been applied before with SRHS data. The fixed-effects nature of the model also allows us to solve the problems of incidental parameters and non-random selection of individuals into different labor market categories. We find that temporary workers, unemployed and inactive individuals are worse off than permanent employees, especially males, young workers, and those living in the center and south of Italy. Health inequalities between unemployed/inactive and permanent workers widen over time for males and young workers, and arise in the north of the country as well.
    Keywords: self-reported health status, employment status, economic crisis, fixed-effects ordered logit model
    JEL: I10 J60 J70
    Date: 2014–03
  7. By: Chamlou, Nadereh
    Abstract: Economics has rediscovered happiness even though the discipline has always been about human wellbeing. A growing evidence suggests that happier people can be more productive and innovative, which leads to profitability and economic growth. Thus, there are
    Keywords: economics of happiness, Arab Spring, North Africa, Islamic economics, freedom, governance
    Date: 2014
  8. By: Prennushi, G.; Gupta, A.
    Abstract: The paper explores whether one of the largest programs in the world for women's empowerment and rural livelihoods, the Indira Kranti Patham in Andhra Pradesh, India, has had an impact on the economic and social wellbeing of households that participate in the program. The analysis usespanel data for 4,250 households from two rounds of a survey conducted in 2004 and 2008 in five districts. Propensity score matching was used to construct control groups and outcomes are compared with differences-in-differences. There are two major impacts. First, the Indira Kranti Patham program increased participants'access to loans, which allowed them to accumulate some assets (livestock and durables for the poorest and nonfarm assets for the poor), invest in education, and increase total expenditures (for the poorest and poor). Women who participated in the program had more freedom to go places and were less afraid to disagree with their husbands; the women participated more in village meetings and their children were slightly more likely to attend school. Consistent with the emphasis of the program on the poor, the impacts were stronger across the board for the poorest and poor participants and were more pronounced for long-term Scheduled Tribe participants. No significant differences are found between participants and nonparticipants in some maternal and child health indicators. Second, program participants were significantly more likely to benefit from various targeted government programs, most important the National Rural Employment Guarantee Scheme, but also midday meals in schools, hostels, and housing programs. This was an important way in which the program contributed to the improved wellbeing of program participants. The effects captured by the analysis accrue to program participants over and above those that may accrue to all households in program villages.
    Keywords: Rural Poverty Reduction,Housing&Human Habitats,Primary Education,Social Accountability,Regional Economic Development
    Date: 2014–04–01

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