nep-hap New Economics Papers
on Economics of Happiness
Issue of 2014‒10‒13
two papers chosen by

  1. Evolutionary efficiency and distributive effects of inertia in cross-country life-satisfaction By Tapas Mishra; Mamata Parhi; Claude Diebolt
  2. Household Finances and Well-Being: An Empirical Analysis of Comparison Effects By Sarah Brown; Daniel Gray

  1. By: Tapas Mishra (School of Management, Southampton University, Southampton, S017 1BJ, UK); Mamata Parhi (Department of Accounting, Finance and Economics Swansea University Swansea, SA2 8PP, UK); Claude Diebolt (BETA, University of Strasbourg Strasbourg, France)
    Date: 2014
  2. By: Sarah Brown (Department of Economics, University of Sheffield); Daniel Gray (Department of Economics, University of Sheffield)
    Abstract: This paper explores the importance of the household's financial position for an individual's level of well-being. Initially, the empirical analysis, based on a large nationally representative panel survey, aims to ascertain the impact of the household's monetary financial position on overall life satisfaction and financial well-being, with the latter being measured by financial satisfaction and subjective prosperity. Taking into account monetary factors in addition to income, the results indicate that the household's level of net wealth, assets and debt are important determinants of overall life satisfaction and financial well-being. The paper also explores whether the financial situation of households in a comparison group influences an individual's overall life satisfaction and financial well-being. The results suggest that the financial position of households in the comparison group is an important determinant of an individual's level of overall life satisfaction and financial well-being, with information effects generally dominating comparison effects. In addition, the effects of the comparison group are asymmetric depending on whether a household's financial position is above or below the average of the reference group and vary over the life-cycle.
    Keywords: financial satisfaction; fixed effects ordered logit; household finances; overall life satisfaction; subjective prosperity
    JEL: D14 I31 J28
    Date: 2014–10

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