nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒02‒05
thirteen papers chosen by

  1. Survey Design and the Determinants of Subjective Wellbeing: An Experimental Analysis By Holford, Angus J.; Pudney, Stephen
  2. Measuring Renewable Energy Externalities: Evidence from Subjective Well-Being Data By Heinz Welsch; Charlotte von Möllendorf
  3. Back to baseline in Britain: adaptation in the British household panel survey By Andrew E. Clark; Yannis Georgellis
  4. Individual experience of positive and negative growth is asymmetric: evidence from subjective well-being data By Jan-Emmanuel De Neve; George W. Ward; Femke de Keulenaer; Bert van Landeghem; Georgios Kavetsos; Michael I. Norton
  5. Not so dissatisfied after all? The impact of union coverage on job satisfaction By Alex Bryson; Michael White
  6. What can life satisfaction data tell us about discrimination against sexual minorities? A structural equation model for Australia and the United Kingdom By Nattavudh Powdthavee; Mark Wooden
  7. Economic growth evens-out happiness: evidence from six surveys By Andrew E. Clark; Sarah Flèche; Claudia Senik
  8. Voluntary Activities and Daily Happiness in the US By Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  9. Measuring Nuclear Power Plant Externalities Using Life Satisfaction Data: A Spatial Analysis for Switzerland By Heinz Welsch; Philipp Biermann
  10. Accounting for the impact of conservation on human well-being By Eleanor Jane Milner-Gulland; J.A. Mcgregor; M. Agarwala; Giles Atkinson; P. Bevan; Tom J. Clements; T. Daw; Katherine Homewood; Noëlle F. Kümpel; J. Lewis; Susana Mourato; Benjamin N. Palmer Fry; M. Redshaw; J. Marcus Rowcliffe; S. Suon; G. Wallace; H. Washington; D. Wilkie
  11. Does better rail access improve homeowners’ happiness?: evidence based on micro surveys in Beijing By Wenjie Wu
  12. Climate change and sustainable welfare: an argument for the centrality of human needs By Ian Gough
  13. Adaptation to poverty in long-run panel data By Andrew E. Clark; Conchita D’Ambrosio; Simone Ghislandi

  1. By: Holford, Angus J. (University of Essex); Pudney, Stephen (ISER, University of Essex)
    Abstract: We analyse the results of experiments on questionnaire design and interview mode in the first four waves (2008-11) of the UK Understanding Society Innovation Panel survey. The randomised experiments relate to job, health, income, leisure and overall life-satisfaction questions and vary the labeling of response scales, mode of interviewing, and location of questions within the interview. We find significant evidence of an influence of interview mode and question design on the distribution of reported satisfaction measures, particularly for women. Results from the sort of conditional modeling used to address real research questions appear less vulnerable to design influences.
    Keywords: survey design, wellbeing, satisfaction, response bias, Understanding Society
    JEL: C23 C25 C81 J28
    Date: 2015–01
  2. By: Heinz Welsch (University of Oldenburg, Department of Economics); Charlotte von Möllendorf (University of Oldenburg, Department of Economics)
    Abstract: Electricity from renewable sources avoids the disadvantages of conventional power generation (air pollution, greenhouse gases, nuclear risk) but often meets with local resistance due to visual, acoustic, and odor nuisance. We use representative panel data on the subjective well-being of 36,475 individuals in Germany, 1994 -<br>2012, for identifying and valuing the local externalities from wind, solar and biomass plants. While the well-being effects of windturbines refer mainly to initial installations and tend to dissipate over time, the effects of solar and biomass plants build up gradually as their number and capacity rises. In a spatial perspective,<br>power generation from biomass creates negative spillovers to adjacent localities that are absent in the case of wind power.
    Keywords: renewable energy, local externality; subjective well-being, life satisfaction, non-market valuation
    JEL: Q42 D62 I31 Q51
    Date: 2014–12
  3. By: Andrew E. Clark; Yannis Georgellis
    Abstract: We look for evidence of adaptation in wellbeing to major life events using eighteen waves of British panel data. Adaptation to marriage, divorce, birth of child and widowhood appears to be rapid and complete; this is not so for unemployment. These findings are remarkably similar to those in previous work on German panel data. Equally, the time profiles with life satisfaction as the wellbeing measure are very close to those using a twelve-item scale of psychological functioning. As such, the phenomenon of adaptation may be a general one, rather than being found only in German data or using single-item wellbeing measures.
    Keywords: life satisfaction; anticipation; adaptation; baseline satisfaction; labour market and life events
    JEL: I31 J12 J13 J62 J63 J64
    Date: 2013–07
  4. By: Jan-Emmanuel De Neve; George W. Ward; Femke de Keulenaer; Bert van Landeghem; Georgios Kavetsos; Michael I. Norton
    Abstract: Are individuals more sensitive to losses than gains in macroeconomic growth? Using subjective well-being measures across three large data sets, we observe an asymmetry in the way positive and negative economic growth are experienced, with losses having more than twice as much impact on individual happiness as compared to equivalent gains. We use Gallup World Poll data drawn from 151 countries, BRFSS data taken from a representative sample of 2.5 million US respondents, and Eurobarometer data that cover multiple business cycles over four decades. This research provides a new perspective on the welfare cost of business cycles with implications for growth policy and our understanding of the long-run relationship between GDP and subjective well-being.
    Keywords: Economic growth; business cycles; subjective well-being; loss aversion
    JEL: D00 D69 I39 O11
    Date: 2014–10
  5. By: Alex Bryson; Michael White
    Abstract: The links between unionisation and job satisfaction remain controversial. In keeping with the existing literature we find strong statistically significant negative correlations between unionisation and overall job satisfaction. However, in contrast to the previous literature we find that once one accounts for fixed unobservable differences between covered and uncovered employees, union coverage is positively and significantly associated with satisfaction with pay and hours of work. Failure to account for fixed unobservable differences between covered and uncovered employees leads to a systematic underestimate of the positive effects of coverage on job satisfaction for both union members and non-members. It seems union coverage has a positive impact on job satisfaction that is plausibly causal.
    JEL: C35 J28 J51
    Date: 2014–06
  6. By: Nattavudh Powdthavee; Mark Wooden
    Abstract: Very little is known about how the differential treatment of sexual minorities could influence subjective reports of overall well-being. This paper seeks to fill this gap. Data from two large surveys that provide nationally representative samples for two different countries – Australia (the HILDA Survey) and the UK (the UK Household Longitudinal Study) – are used to estimate a simultaneous equations model of life satisfaction. The model allows for self-reported sexual identity to influence a measure of life satisfaction both directly and indirectly through seven different channels: (i) income; (ii) employment; (iii) health (iv) partner relationships; (v) children; (vi) friendship networks; and (vii) education. Lesbian, gay and bisexual persons are found to be significantly less satisfied with their lives than otherwise comparable heterosexual persons. In both countries this is the result of a combination of direct and indirect effects.
    Keywords: Sexual orientation; sexual minorities; discrimination; life satisfaction; HILDA survey; UKHLS
    JEL: I31 J71
    Date: 2014–05
  7. By: Andrew E. Clark; Sarah Flèche; Claudia Senik
    Abstract: In spite of the great U-turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has fallen in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the “very unhappy” and the “perfectly happy”. Lower happiness inequality is found both between and within countries, and between and within individuals. Our cross-country regression results argue that the extension of various public goods helps to explain this greater happiness homogeneity. This new stylised fact arguably comes as a bonus to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.
    Keywords: Happiness; inequality; economic growth; development; Easterlin paradox
    JEL: D31 D6 I31 O15
    Date: 2014–10
  8. By: Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: This paper analyzes differences in daily happiness between those individuals in the United States who perform voluntary activities during the day, and those who do not. Using the Well-Being Module of the American Time Use Survey 2010, we initially find that those who devote any time to voluntary activities during the day report higher levels of daily happiness than those who do not. Comparing the happiness obtained from a range of activities, we find that volunteering is among the most enjoyable, indicating that time spent on voluntary activities is utility-enhancing. But when the issue of reverse causality is taken into account, we find no differences in daily happiness between volunteers and non-volunteers, which indicates that happier individuals are also more likely to volunteer. We document that the effect of voluntary activities on the experienced utility of individuals can be decomposed into a "time-composition" effect and a "personality" effect, with the latter explaining between 11% and 46% of the observed difference.
    Keywords: voluntary activities, time use survey, experienced utility
    JEL: D13 J16 J22
    Date: 2015–01
  9. By: Heinz Welsch (University of Oldenburg, Department of Economics); Philipp Biermann (University of Oldenburg, Department of Economics)
    Abstract: Conceptualizing externalities from perceived nuclear risk as being related to distance from nuclear facilities, we estimate the relationship between Swiss citizens’ life satisfaction (understood as a proxy of utility) and the distance of their place of residence from the nearest nuclear power plant. Controlling for a rich set of life satisfaction factors, we find a statistically and economically significant satisfaction-distance gradient, whose monetary value amounts to CHF 291 per kilometer of distance, on average. The gradient is smaller for those who may feel protected by wind direction and topographical conditions, and it differs by age, sex, and the level of education. The satisfaction-distance gradient has changed significantly after the nuclear disaster at Fukushima, Japan, indicating a reassessment of distance-dependent nuclear risk. We find no evidence of hedonic locational equilibrium with respect to nuclear risk.
    Keywords: nuclear risk; life satisfaction; non-market valuation; spatial equilibrium; Fukushima
    JEL: Q48 Q51 I31 Q54 R53
    Date: 2015–01
  10. By: Eleanor Jane Milner-Gulland; J.A. Mcgregor; M. Agarwala; Giles Atkinson; P. Bevan; Tom J. Clements; T. Daw; Katherine Homewood; Noëlle F. Kümpel; J. Lewis; Susana Mourato; Benjamin N. Palmer Fry; M. Redshaw; J. Marcus Rowcliffe; S. Suon; G. Wallace; H. Washington; D. Wilkie
    Abstract: Conservationists are increasingly engaging with the concept of human well-being to improve the design and evaluation of their interventions. Since the convening of the influential Sarkozy Commission in 2009, development researchers have been refining conceptualizations and frameworks to understand and measure human well-being and are starting to converge on a common understanding of how best to do this. In conservation, the term human well-being is in widespread use, but there is a need for guidance on operationalizing it to measure the impacts of conservation interventions on people. We present a framework for understanding human well-being, which could be particularly useful in conservation. The framework includes 3 conditions; meeting needs, pursuing goals, and experiencing a satisfactory quality of life. We outline some of the complexities involved in evaluating the well-being effects of conservation interventions, with the understanding that well-being varies between people and over time and with the priorities of the evaluator. Key challenges for research into the well-being impacts of conservation interventions include the need to build up a collection of case studies so as to draw out generalizable lessons; harness the potential of modern technology to support well-being research; and contextualize evaluations of conservation impacts on well-being spatially and temporally within the wider landscape of social change. Pathways through the smog of confusion around the term well-being exist, and existing frameworks such as the Well-being in Developing Countries approach can help conservationists negotiate the challenges of operationalizing the concept. Conservationists have the opportunity to benefit from the recent flurry of research in the development field so as to carry out more nuanced and locally relevant evaluations of the effects of their interventions on human well-being.
    Keywords: development; ecosystem services; impact evaluation; intervention; poverty
    JEL: Q56
    Date: 2014–10
  11. By: Wenjie Wu
    Abstract: Development of urban transport infrastructures is a key policy focus---particularly in countries like China which have experienced fast urbanisation over the past decade. While existing studies provide marginal values for rail access on the real estate market, little is known about the consequences of local public goods improvements for homeowners’ subjective wellbeing using reported happiness data. This paper uses a difference-in-difference method to empirically measure the impact of rail access on homeowners’ happiness. My identification strategy takes advantage of micro happiness survey data conducted before-and-after the opening of new rail stations in 2008 Beijing. I deal with the potential concern about the endogeneity in sorting effects by focusing on “stayers” and using non-market (fang gai) housings with pre-determined locations. I find the significantly heterogeneity in the effects from better rail access on homeowners’ happiness with respect to different dimensions of residential environment. The welfare estimates suggest that better rail access provided substantial benefits to homeowners’ happiness, but these benefits have strong social-spatial differentiations. These findings add to the evidence that transport improvement has an important role to play in influencing local residents’ subjective wellbeing.
    Keywords: happiness; transport improvement; geographical Information system; wellbeing; China
    JEL: D60 H41 R41
    Date: 2013–04
  12. By: Ian Gough
    Abstract: Since climate change threatens human wellbeing across the globe and into the future, we require a concept of wellbeing that encompasses an equivalent ambit. This paper argues that only a concept of human need can do the work required. It compares need theory with three alternative approaches. Preference satisfaction theory is criticised on the grounds of subjectivity, epistemic irrationality, endogenous and adaptive preferences, the limitlessness of wants, the absence of moral evaluation, and the non-specificity of future preferences. The happiness approach is found equally wanting. The main section shows how these deficiencies can be addressed by a coherent theory of need. Human needs are necessary preconditions to avoid serious harm, are universalisable, objective, empirically grounded, non-substitutable and satiable. They are broader than ‘material’ needs since a need for personal autonomy figures in all theoretical accounts. While needs are universal, need satisfiers are most often contextual and relative to institutions and cultures. The satiability and non-substitutability of needs is critical for understanding sustainability. The capability approaches of Sen and Nussbaum are compared but argued to be less fundamental. Finally, human needs provide the only concept that can ground moral obligations across global space and intergenerational time and thus operationalise ‘sustainable welfare’.
    Keywords: Human needs; welfare theory; wellbeing; global justice; intergenerational justice; sustainability; preferences; capabilities
    JEL: B5 I00 P46 Z13
    Date: 2014–07
  13. By: Andrew E. Clark; Conchita D’Ambrosio; Simone Ghislandi
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation.
    Keywords: Income; Poverty; Subjective well-being; Adaptation; SOEP
    JEL: D60 I31
    Date: 2014–11

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