nep-hap New Economics Papers
on Economics of Happiness
Issue of 2014‒05‒24
nine papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Contribution of the Conservation Estate to New Zealanders’ Prosperity and Wellbeing: Three Case Studies By Espiner, Stephen; Stewart, Emma; Dalziel, Paul; Saunders, Caroline
  2. Prices and Work in The New Economy By Neva Goodwin
  3. Unpacking the determinants of life satisfaction: A survey experiment By Corazzini, Luca; Bertoni, Marco; Angelini, Viola
  4. Expected happiness from childbearing and its realization By Arnstein Aassve; Anna Barbuscia; Letizia Mencarini
  5. Population growth and human capital: a welfarist approach By Thomas Renstrom; Luca Spataro
  6. The Distance between Perception and Reality in the Social Domains of Life By Eduardo Lora
  7. Financial Concerns and Overall Life Satisfaction: A Joint Modelling Approach By Daniel Gray
  8. La Economía de la Felicidad en América Latina By Joaquín Días
  9. The impact of parents migration on the well-being of children left behind: Initial evidence from Romania By Botezat, Alina; Pfeiffer, Friedhelm

  1. By: Espiner, Stephen; Stewart, Emma; Dalziel, Paul; Saunders, Caroline
    Abstract: New Zealand’s total land area is approximately 26.8 million hectares, of which 8.5 million hectares are administered by the Department of Conservation (DOC). DOC recognises that it needs to partner with others to achieve its outcome statement. The purpose of this paper is to present three case studies where DOC is partnering with community groups so that the local community can gain environmental, social and economic benefits in line with the Department’s outcome statement. The authors had previous knowledge of the three case studies and received a small amount of funding from DOC to allow some follow-up interviews with key stakeholders in each of the case studies. The paper is presented in four main parts. Part 1 describes the research questions asked in the stakeholder interviews and explains their purpose. Parts 2, 3 and 4 present the three case studies: The Oparara Valley Project Trust; The Otago Central Rail Trail; and the Kiwi Ranger programme. The paper finishes with a summary of the major common themes revealed through these case studies.
    Keywords: Community/Rural/Urban Development, Environmental Economics and Policy,
    Date: 2014
  2. By: Neva Goodwin
    Abstract: The impetus for this paper is the urgent need is to figure out how a non-growing – even a shrinking – economy may be able to provide human well-being while beginning to restore the health of natural world. Twentieth century economic theory is not well able to conceptualize this problem, especially since it sees growth as necessary for jobs, jobs necessary for income, and income necessary for well-being. To unwind this chain will require some radical changes in economic theory. The theory must focus on the final goal of human well-being, in the present and the future, prior to the intermediate goals of growth, financial wealth, or the maximization of consumption. Equally critical, and difficult, is to find ways for economic theory to take account of human values, and identify the places where they are more salient than market values, or prices. This conceptualization must be done in a context where we have even more reason than usual to doubt our ability to predict the future. This is because the competing forces of technological progress, on the one hand, and the cumulative human impacts on the natural world, on the other, present us with some dramatically diverging possibilities for the future of work. In one possible scenario, technological advances make more and more jobs obsolete: the productive resources of the economy continue to be able to turn out a high level of material goods and services, but fewer and fewer people are needed to keep these processes going. The resulting “technological unemployment” could create massive poverty – unless societies can devise ways of sharing the wealth. The other possible future path is one in which, while the economy retains (with the normal slow decay) the store of capital goods (including technological and other knowledge, as well as information and transportation systems) that have been amassed in the last few hundred years, the system encounters serious constraints from the depletion and/or degradation of the natural resource inputs of energy, water, biota, minerals, and other materials. In this case the relative value of material (including energy) inputs is likely to rise relative to the value of human labor – a trend that would be the opposite of what has obtained quite steadily since the onset of the Industrial Revolution. A likely result of this reversal would be a general reduction in labor income, as well as an overall reduction in economic activity, as measured by GDP.
    Date: 2014–03
  3. By: Corazzini, Luca; Bertoni, Marco; Angelini, Viola (Groningen University)
    Abstract: We present results of a survey experiment aimed at assessing context effects on subjects' reported life satisfaction, exerted by raising awareness of fundamental life domains - income, family, job, friends, sentimental relationships and health - through questionnaire manipulations. While simply presenting subjects with the list of the domains before evaluating overall life satisfaction has no effect on the distribution of life satisfaction, asking subjects to report their satisfaction with each life domain strongly affects overall evaluations. In particular, we detect a robust unpacking effect, whereby reporting satisfaction with life domains signifcantly increases the subsequent overall life satisfaction evaluations. In addition, raising awareness of life domains significantly increases precision (as it reduces the dispersion of responses) and accuracy (by increasing the association between life satisfaction and life domain evaluations) of self-reported levels of life satisfaction.
    Date: 2014
  4. By: Arnstein Aassve; Anna Barbuscia; Letizia Mencarini
    Abstract: Using longitudinal data from the Generations and Gender Surveys (for Bulgaria, France, and Italy), we study the determinants of predicted happiness associated with childbearing and then its role for explaining realized childbearing. Expected happiness, as declared by individuals, is indeed a powerful predictor of their fertility behavior. Those who expect to be happier from childbearing indeed have a much higher probability of having a child within the following three years. But the results also show strong gender and country differences in the level of expected happiness and its effect on fertility behavior. For example, in Italy we see that individuals tend to have a high expected happiness from childbearing, yet realized fertility is low. What separates this study from recent papers considering happiness and fertility is that in the GGS the question about happiness is specific with respect to childbearing. Previous studies tend to focus on overall happiness, which has the drawback of, first, having relatively low variation in responses, and second, it refers to the general level of happiness, which incorporates a whole range of factors, not just children.
    Date: 2014–03
  5. By: Thomas Renstrom (University of Durham (UK)); Luca Spataro (Dipartimento di Economia e Management, University of Pisa (Italy))
    Abstract: In this paper we investigate the relationship between economic and population growth in an endogenous growth model driven by human capital accumulation à la Lucas (1988). Since we allow for endogenous population growth, we adopt the population criterion Relative Critical Level Utilitarianism (an extension of Critical Level Utilitarianism, Blackorby et al. 1995) which allows axiomatically founded welfare orderings under variable population. Under this extension the Critical Level Utility is dependent on parents’ wellbeing. In this scenario we investigate the equilibrium relation between economic growth and population growth as functions of the underlying parameters and we provide the conditions for the economic take-off to occur.
    Keywords: population growth, endogenous growth, human capital, critical level utilitarianism
    JEL: D6 J11 O41
    Date: 2014–05
  6. By: Eduardo Lora
    Abstract: The distance between perception and reality with respect to the social domains of life is often striking. Using survey data collected on Latin American countries, this paper provides an overview of the main empirical findings on the gaps between perception and reality in four social domains--health, employment, the perception of security, and social ranking. The overview emphasizes the psychological biases that may explain the gaps. Biases associated with cultural values are very relevant with respect to health and job satisfaction. Cultural differences across countries are pronounced in perceptions of health, while cultural differences across socioeconomic groups are more apparent with respect to job satisfaction. Affect and availability heuristics are the dominant sources of bias in the case of perceptions of security. The formation of subjective social rankings appears to be less culturally dependent but more dependent on the socioeconomic development in the country. The gaps between objective and subjective indicators in the social domains of life are a rich source of data to help understand how perceptions are formed, identify important aspects of people's lives that do not appear in official indicators, inform public debate on social policy, and shed light on public attitudes on key social issues.
    Keywords: Social Development, IDB-WP-423
    Date: 2013–08
  7. By: Daniel Gray (Department of Economics, University of Sheffield)
    Abstract: This paper explores the relationship between the household's financial position and overall life satisfaction. The empirical analysis, based on a large nationally representative panel survey for Germany, aims to ascertain the impact of a household's subjective and monetary financial positions on overall life satisfaction. Within a fixed effects framework, the level of household assets and net wealth are positively related to overall life satisfaction, as is household income. Allowing for different types of debt to have differential impacts on overall life satisfaction reveals that unsecured debt, opposed to secured debt, has a detrimental impact on overall life satisfaction. In addition, the household's subjective financial position is found to be an important determinant of overall life satisfaction. The potential endogeneity of the subjective financial measures in the overall life satisfaction equation is accounted for using a recursive bivariate ordered probit model. The results suggest that the subjective financial position mediates the association between the household's monetary financial position and overall life satisfaction.
    Keywords: bivariate ordered probit; fixed effects ordered logit; household finances; overall life satisfaction
    JEL: D14 I31 J28
    Date: 2014–05
  8. By: Joaquín Días (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: The present paper examines the empirical literature on the Economics of Happiness with the aim both to comparatively evaluate the state of the art in Latin America, and to propose a research hypothesis able to contribute to the improvement of the understanding of the determinants of happiness in our continent. On the basis of both the empirical research made in developed countries, particularly the work of Stutzer (2004) about Switzerland, and the work of Graham and Pettinato (2002) about Peru, we elaborate an explaining hypothesis of the Easterlin Paradox for Latin America, one that tries to achieve the same level of complexity of Stutzer’s (2004) hypothesis, which combines in one and the same proposal the three theoretical explanations of the Easterlin Paradox proposed in the literature. Our hypothesis implies to include as a determinant of the happiness equation one component of relative income, which in turn includes, together with a social comparison mechanism, a subjective evaluation, as to the future prospect of personal income, of the risks and opportunities coming from the interplay between some personal characteristics (such as age, educational level, place of residence, relative income level, gender, etc.) and some characteristics of the economic context (such as the unemployment rate, the poverty rate, the Human Development Index, the Gini Index, etc.) Such a hypothesis entails to test a happiness equation which includes an element of social comparison of the Hirschman-type (Hirschman 1973), and some elements coming from de so called macroeconomics of happiness. The available evidence on the Economics of Happiness in Latin America supports the plausibility of the proposed hypothesis.
    Keywords: income, happiness
    JEL: D01 D31 D60 I31
    Date: 2013–12
  9. By: Botezat, Alina; Pfeiffer, Friedhelm
    Abstract: Many children grow up with parents working abroad. Economists are interested in the achievement and well-being of these home alone children to better understand the positive and negative aspects of migration in the sending countries. This paper examines the causal effects of parents' migration on their children left home in Romania, a country where increasingly more children are left behind in recent years. Using samples from a unique representative survey carried out in 2007 instrumental variable and bivariate probit estimates have been performed. Our initial evidence demonstrates that in Romania home alone children receive higher school grades, partly because they increase their time allocation for studying. However, they are more likely to be depressed and more often suffer from health problems especially in rural areas. --
    Keywords: parent migration,home alone children,well-being,Romania
    JEL: I12 I21 J13
    Date: 2014

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