nep-hap New Economics Papers
on Economics of Happiness
Issue of 2014‒08‒09
ten papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. National Happiness and Genetic Distance: A Cautious Exploration By Proto, Eugenio; Oswald, Andrew J.
  2. Performance Appraisals and Job Satisfaction By Patrick Kampkötter
  3. Trajectories of Life Satisfaction: Positive Feedback Loops May Explain Why Life Satisfaction Changes in Multi-Year Waves rather than Oscillating around a Set-Point By Bruce Headey; Ruud Muffels
  4. Beschäftigungsstruktur und Zufriedenheit von Zeitarbeitnehmern in Deutschland By Christian Grund; Johannes Martin; Axel Minten
  5. Shelter from the Storm: Upgrading Housing Infrastructure in Latin American Slums By Sebastian Galiani; Paul Gertler; Ryan Cooper; Sebastian Martinez; Adam Ross; Raimundo Undurraga
  6. Towards a More Inclusive and Precautionary Indicator of Global Sustainability By John C. V. Pezzey; Paul J. Burke
  7. Who Benefits from Big Government? A Life Satisfaction Approach By Bodo Knoll; Hans Pitlik
  8. The dark side of Chinese growth: Explaining decreasing well-being in times of economic boom. By Bartolini, Stefano; Sarracino, Francesco
  9. An Investigation into Happiness, Dynamics and Adaptation By Piper, Alan T.
  10. Assessing the level of happiness across countries: A robust frontier approach By Cordero, Jose M.; Salinas-Jiménez, Javier; Salinas-Jiménez, Mª Mar

  1. By: Proto, Eugenio (The University of Warwick); Oswald, Andrew J. (The University of Warwick)
    Abstract: This paper examines a famous puzzle in social science. Why do some nations report such high happiness? Denmark, for instance, regularly tops the league table of rich nations’ well-being; Great Britain and the US enter further down; France and Italy do relatively poorly. Yet the explanation for this ranking one that holds even after adjustment for GDP and socio-economic and cultural variables remains unknown. We explore a new avenue. Using data on 131 countries, we cautiously document a range of evidence consistent with the hypothesis that certain nations may have a genetic advantage in well-being.
    Keywords: Happiness
    Date: 2014
  2. By: Patrick Kampkötter
    Abstract: Formal performance appraisals (PA) are one of the most important human resource management practices in companies. In this paper, we focus on the reaction of employees to these performance assessments. In particular, we investigate the effect between the incidence of being formally evaluated by a supervisor and job and income satisfaction. Building on a representative, longitudinal sample of more than 12,000 individuals from the German Socio-Economic Panel Study (SOEP), we apply fixed effects regressions and find a significantly positive effect of PA on job satisfaction, which is driven by appraisals that are linked to monetary outcomes. Furthermore, the moderating effects of personality traits (Big Five, locus of control) on the relationship between PA and job satisfaction are explored. We find a negative interaction term between PA without any monetary consequences and both employees scoring high on openness to experience and internal locus of control. This suggests that for these employees appraisals, which induce performance monitoring without any monetary consequences, have a detrimental effect on job satisfaction rates.
    Keywords: Performance Appraisal; Job Satisfaction; Income Satisfaction; Big Five; Locus of Control; SOEP
    Date: 2014
  3. By: Bruce Headey; Ruud Muffels
    Abstract: Long term panel data enable researchers to construct Life Satisfaction (LS) trajectories for individuals over time. In this paper we analyse the trajectories of respondents in the German Socio-Economic Panel who recorded their LS for 20 consecutive years in 1991-2010. Previous research has shown that at least a quarter of these respondents recorded substantial long term changes in LS (Headey, Muffels and Wagner, 2010, 2012). In this paper, bar charts of LS trajectories, and subsequent statistical analysis, show that respondents tend to spend multiple consecutive years either above and/or below their own 20-year mean level of LS. These results are contrary to set-point theory which views LS as stable, exceptfor short term fluctuations due to major life events. In the later part of the paper we attempt to explain multi-year/medium term changes in LS. We estimate structural equation models with two-way causation between LS and variables usually treated as causes of LS, including health, frequency of physical exercise, frequency of social activities/social participation, and satisfaction with work and leisure. The results are interpreted as showing positive feedback loops between these variables and LS, such that gains and losses of LS tend to be reinforced over time. The models are based on a modified concept of 'Granger-causation' (Granger, 1969). The main intuition behind Granger-causation is that if x can be shown to be statistically significantly related to y in a model which includes multiple lags of y, then it can be inferred that x is one cause of y.
    Keywords: subjective indicators, methods
    Date: 2014
  4. By: Christian Grund; Johannes Martin; Axel Minten
    Abstract: Based on data from the German Socio-Economic Panel of the years 2001-2012, we investigate determinants of temporary agency work. Moreover, we explore possible explanations for differences between temp and regular workers as well as unemployed people regarding their work and life satisfaction. Our results show that previous spells in unemployment considerably increase the likelihood of being in temporary agency work. Temp workers often have jobs for which they are not appropriately trained. Their lower score of job satisfaction can be mainly explained by differences in individual characteristics as well as by a higher perceived job insecurity. Their score of life satisfaction, though, remains significantly lower compared to regular employees even if it is controlled for these factors. However, life satisfaction of temp workers is considerably better than that of unemployed people. Auf Basis von Daten des Deutschen Sozio-Ökonomischen Panels der Jahre 2001 bis 2012 untersuchen wir Determinanten einer Zeitarbeitsbeschäftigung sowie möglicher Erklärungsansätze für Unterschiede in der Arbeits- und Lebenszufriedenheit zwischen Arbeitnehmern in Zeitarbeit im Vergleich zu Normalbeschäftigten und zu arbeitslosen Personen. Unsere Ergebnisse zeigen, dass frühere Zeiten von Arbeitslosigkeit die Wahrscheinlichkeit einer Zeitarbeitsbeschäftigung deutlich steigern. Zudem führen Zeitar-beitnehmer eher Tätigkeiten aus, für die sie nicht passend qualifiziert sind. Die niedrigere Arbeitszufriedenheit von Zeitarbeitern im Vergleich zu Normalbeschäftigten lässt sich vor allem auf Unterschiede in individuellen Merkmalen und auf eine als deutlich stärker empfundene Arbeitsplatzunsicherheit zurückführen, während ihre Lebenszufriedenheit auch unter Berücksichtigung dieser Faktoren signifikant geringer ist. Jedoch äußern Zeitarbeitnehmer eine deutlich höhere Lebenszufriedenheit als arbeitslose Personen.
    Keywords: Arbeitszufriedenheit, Lebenszufriedenheit, SOEP, Zeitarbeit
    JEL: J28 J81 M12 M55
    Date: 2014
  5. By: Sebastian Galiani (University of Maryland); Paul Gertler (UC Berkeley); Ryan Cooper (J-PAL); Sebastian Martinez (Inter-American Development Bank); Adam Ross (Bill & Melinda Gates); Raimundo Undurraga (New York University)
    Abstract: This paper provides empirical evidence on the causal effects that upgrading slum dwellings has on the living conditions of the extremely poor. In particular, we study the impact of providing better houses in situ to slum dwellers in El Salvador, Mexico and Uruguay. We experimentally evaluate the impact of a housing project run by the NGO TECHO which provides basic pre-fabricated houses to members of extremely poor population groups in Latin America. The main objective of the program is to improve household well-being. Our findings show that better houses have a positive effect on overall housing conditions and general well-being: treated households are happier with their quality of life. In two countries, we also document improvements in children’s health; in El Salvador, slum dwellers also feel that they are safer. We do not find this result, however, in the other two experimental samples. There are no other noticeable robust effects on the possession of durable goods or in terms of labor outcomes. Our results are robust in terms of both internal and external validity because they are derived from similar experiments in three different Latin American countries.
    JEL: I12 I31 J13 O15 O18
    Date: 2014–07
  6. By: John C. V. Pezzey (Fenner School of Environment and Society, The Australian National University); Paul J. Burke (Crawford School of Public Policy, The Australian National University)
    Abstract: We construct a hybrid, economic indicator of the sustainability of global well-being, which is more inclusive than existing indicators and incorporates an environmentally pessimistic, physical constraint on global warming. Our methodology extends the World BankÕs Adjusted Net Saving (ANS) indicator to include the cost of population growth, the benefit of technical progress, and a much higher, precautionary cost of current CO2 emissions. Future warming damage is so highly unknowable that valuing emissions directly is rather arbitrary, so we use a novel, inductive approach: we modify damage and climate parameters in the deterministic DICE climate-economy model so it becomes economically optimal to control emissions in a way likely to limit warming to an agreed target, here 2¡C. If future emissions are optimally controlled, our ANS then suggests that current global well-being is sustainable. But if emissions remain uncontrolled, our base-case ANS is negative now and our corresponding, modified DICE model has an unsustained development path, with well-being peaking in 2065. Current ANS on an uncontrolled path may thus be a useful heuristic indicator of future unsustainability. Our inductive method might allow ANS to include other very hard-to-value, environmental threats to global sustainability, like biodiversity loss and nitrogen pollution.
    Keywords: global sustainability, optimism and pessimism, precautionary valuation of CO2 emissions, unknowability and induction, population growth, technical progress
    JEL: Q56 Q01 Q57 Q51 Q54 Q55
    Date: 2014–07
  7. By: Bodo Knoll; Hans Pitlik
    Abstract: Which impact does government size have on life satisfaction, and how do effects of bigger government differ between income groups in society? Previous studies typically employed country averages and thus neglect possibly heterogeneous happiness effects between income groups. The paper addresses empirically the effects of government spending on subjective well-being of individuals belonging to different income groups. Our analysis is based on individual data from 25 European countries participating in the European Social Survey. In contrast to most previous studies we take account of the endogeneity between relative income position and reported life satisfaction by an instrumental variable approach. Our results suggest, first, that most government spending categories, including social protection, are on average negatively related to individual well-being. Secondly, estimated marginal effects of health, education and social protection spending at different income levels show that spending increases always have a stronger negative effect on high income groups’ well-being than on low income groups’ life satisfaction. For all government spending categories, marginal happiness effects of higher public spending are clearly negative for income groups at the top.
    Keywords: Life satisfaction, government size, health spending, education spending, social protection, instrumental variables
    JEL: I31 H40 H11
    Date: 2014–07
  8. By: Bartolini, Stefano; Sarracino, Francesco
    Abstract: The formidable economic growth of China in the past few decades led to outstanding improvements in virtually all objective indicators of standards of life. However, these objective records are in striking contrast with subjective ones. Between 1990 and 2007, Chinese average subjective well-being substantially declined. Using data from the World Values Survey, this paper identifies the predictors of the trend of life satisfaction in China between 1990 and 2007. Our findings suggest that subjective data capture something that objective data miss and that can explain the decrease in well-being: the increase in the importance of social comparisons and the decline of social capital. Moreover, economic growth resulted in higher well-being inequality: those in the lowest three income deciles and the middle-class experienced a significant reduction in well-being, whereas the latter increased among richer people. Differences in the erosion of social capital and in the impact of social comparisons seem to be the key to well-being differences among classes.
    Keywords: China; Easterlin paradox; GDP; economic growth; subjective well-being; life satisfaction; social capital; Oaxaca-Blinder decomposition; WVS
    JEL: I31 O12 O15
    Date: 2014–08–05
  9. By: Piper, Alan T.
    Abstract: This investigation discusses and employs dynamic panel analysis to provide new insights into the concept of happiness, and particularly its dynamics. Arguments are advanced for its use both in terms of the advantages such analysis offers, and also because it takes into account dynamics omitted by more standard panel data estimation methods like fixed effects. Using the British Household Panel Survey, it is demonstrated that happiness is largely (but not wholly) contemporaneous. This helps to provide explanations for previous findings, inform the adaptation discussion, and generate new understanding regarding well-being. An event – no matter when entered into - must have a contemporaneous impact on either the life of an individual or an individual’s perception of their life (or both) for it to be reflected in self-reported life satisfaction scores. Similarly, this contemporaneous finding also explains other results in the literature about the well-being legacy of events.
    Keywords: Life Satisfaction, Dynamic Panel Analysis, GMM, Adaptation, Happiness
    JEL: I31 J12 J64
    Date: 2014–08–05
  10. By: Cordero, Jose M.; Salinas-Jiménez, Javier; Salinas-Jiménez, Mª Mar
    Abstract: In this paper we propose an innovative approach based on life satisfaction to estimate efficiency measures for individuals considering how they convert their resources into higher levels of happiness. We use an extension of the conditional nonparametric robust approach which allows us to consider a mixed set of individual and institutional variables that can affect the levels of life satisfaction. Our empirical analysis includes data about 31,854 individuals from 26 OECD countries participating in the last wave of the World Values Survey. Results obtained indicate that the most efficient individuals in achieving happiness tend to live in northern and central European countries whereas the less efficient individuals are found, in average, in Asian transitional economies. In addition, it is also found that most of the traditional determinants of wellbeing (e.g. age, marital status, religion or unemployment) also have a significant impact on efficiency measures.
    Keywords: Efficiency, Happiness, Cross-country analysis, nonparametric
    JEL: C14 I30
    Date: 2014–07–30

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