nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒02‒22
thirteen papers chosen by

  1. The Magic of the New: How Job Changes Affect Job Satisfaction By Hetschko, Clemens; Chadi, Adrian
  2. Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia By Jinan Zeidan
  3. Smoking Bans, Cigarette Prices and Life Satisfaction By Odermatt, Reto; Stutzer, Alois
  4. Underestimated Benefits from Periphery: Internal Migration and Subjective Well-being By Kopmann, Angela; Rehdanz, Katrin
  5. Regional Income Inequality lowers Life Satisfaction: Evidence from OECD Countries By Kalenborn, Christine; Lessmann, Christian
  6. Unmet Aspirations as an Explanation for the Age U-shape in Wellbeing By Schwandt, Hannes
  7. Life Satisfaction, Income and Personality By Proto, Eugenio; Rustichini, Aldo
  8. Back to Bentham: Should We? Large-Scale Comparison of Decision versus Experienced Utility for Income-Leisure Preferences By Bargain, Olivier; Jara Tamayo, Holguer Xavier
  9. Local Segregation and Well-Being By Coral del Río; Olga Alonso-Villar
  10. Gone with the storm: rainfall shocks and household well-being in Guatemala By Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria E.; Salazar, Mateo
  11. Convergence Across Provincial Economies in Canada: Trends, Drivers, and Implications By Evan Capeluck
  12. El acceso a programas de transferencias de ingreso de la población de menores recursos en Uruguay By Andrés Dean; Andrea Vigorito
  13. Research-driven clusters & green mobility: A cross-regional comparison By David, Alexandra; Terstriep, Judith; Welschhoff, Jessica

  1. By: Hetschko, Clemens; Chadi, Adrian
    Abstract: We investigate a crucial event for job satisfaction: changing the workplace. For representative German panel data, we show that the reason why the previous employment ended is strongly linked to the satisfaction with the new job. When workers initiate a change of employer, they experience relatively high job satisfaction, though only in the short-term. To test causality, we exploit plant closure as exogenous trigger of job switching and find no causal effect of job changes on job satisfaction. Our findings concern research on workers well-being as well as labor market and human resource policies.
    JEL: I31 J28 J63
    Date: 2014
  2. By: Jinan Zeidan (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: We explore (i) the usual determinants of happiness in Indonesia, with a special focus on the role of various measures of absolute income; (ii) the presence of relativistic concerns or positive external effects in shaping attitudes to subjective well-being; and (iii) whether this potential effect changes sign with income level. Additional evidence offered by our investigation relates to the effect of past income levels as well as to that of aspirations. In line with other literature from poor contexts, we find that the subjective well-being of Indonesians is positively affected by the comparison with the income of people around them. This positive influence is unambiguously more important for the poor than for the rich. This pattern is consistent through different measures of well-being and holds also when accounting for past income levels, and lagged income expectations.
    Keywords: Indonesia, subjective well-being, external effects, positional concerns
    JEL: O12 I30 I31
    Date: 2015–02
  3. By: Odermatt, Reto; Stutzer, Alois
    Abstract: The consequences of tobacco control policies for individual welfare are difficult to assess. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are not related to subjective well-being, but increase the life satisfaction of smokers who recently failed to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.
    JEL: D03 H30 I18
    Date: 2014
  4. By: Kopmann, Angela; Rehdanz, Katrin
    Abstract: This paper is among the first to link internal migration and subjective well-being in developed countries. Economic theory predicts that individuals migrate towards urban agglomerations, if the potential gain in income is sufficient to cover costs. However, this narrow view cannot explain why migration exists also to the rural periphery. In our analysis, we investigate non-monetary benefits beyond economics from internal migration. Using highly disaggregated spatial information on people s migration decisions and their subjective well-being from 2006 to 2010 for Germany, we control for selection bias by applying an individual fixed effect model with additional controls on the labor market region level. We find positive benefits from migration, which are positive and diminishing with distance. Urban-to-rural migration provides higher benefits than rural-to-urban migration in general. Older generations derive large negative benefits from rural-to-urban migration, but positive benefits from urban-to-rural migration. The latter suggests that economic theory underestimates benefits from migration to the periphery when ignoring non-monetary compensating differentials.
    JEL: A12 C33 R23
    Date: 2014
  5. By: Kalenborn, Christine; Lessmann, Christian
    Abstract: This paper analyzes the e ffect of regional income inequality within countries on individual life satisfaction. We use data from the World Values Survey (WVS) and the European Values Survey (EVS) containing approximately 97,000 observations from 1981-2008. Regional income inequality is measured by the coeffi cient of variation of regional GDP per capita. We find that higher regional income inequality leads to lower life satisfaction in OECD countries. In non-OECD countries, we find no signifi cant e ffect. This may be related to the higher dynamics of regional inequality in middle and low income countries, where people still hope to participate in income increases in the future, while regional inequality is persistent in high income countries.
    JEL: D60 I30 O15
    Date: 2014
  6. By: Schwandt, Hannes
    Abstract: An emerging economic literature has found evidence that wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find that future life satisfaction is strongly overestimated when young and underestimated during old age. This pattern is stable over time and observed within cohorts as well as across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.
    JEL: I30 J10 D84
    Date: 2014
  7. By: Proto, Eugenio (University of Warwick); Rustichini, Aldo (University of Minnesota)
    Abstract: We use personality traits to better understand the relationship between income and life satisfaction. Personality traits mediate the effect of income on life satisfaction. The effect of neuroticism, which measures sensitivity to threat and punishment, is strong in both the British Household Panel Survey and the German Socioeconomic Panel. Neuroticism increases the usually observed concavity of the relationship: individuals with a higher neuroticism score enjoy extra income more than those with a lower score if they are poorer, and enjoy extra income less if they are richer. When the interaction between income and neuroticism is introduced, income does not have a significant effect on its own. To interpret the results, we present a simple model based on Prospect Theory, where we assume that: (i) life satisfaction is dependent on the gap between aspired and realized income, and this is modulated by neuroticism; and (ii) income increases in aspirations with a slope less than unity, so that the gap between aspired and realized income increases with aspirations. From the estimation of this model we argue that poorer individuals tend to over-shoot in their aspirations, while the rich tend to under-shoot. The estimation of the model also shows a substantial effect of traits on income.
    Keywords: life satisfaction, income, personality traits, neuroticism, prospect theory
    JEL: D03 D87 C33
    Date: 2015–02
  8. By: Bargain, Olivier; Jara Tamayo, Holguer Xavier
    Abstract: Subjective wellâ€being (SWB) is increasingly used as a way to measure individual wellâ€being. Interpreted as “experienced utilityâ€, it has been compared to “decision utility†using specific experiments (Kahneman et al., 1997) or stated preferences (Benjamin et al. 2012). We suggest here an original largeâ€scale comparison between ordinal preferences elicited from SWB data and those inferred from actual choices (revealed preferences). Precisely, we focus on incomeâ€leisure preferences, closely associated to redistributive policies. We compare indifference curves consistent with incomeâ€leisure subjective satisfaction with those derived from actual labor supply choices, on the same panel of British households. Results show striking similarities between these measures on average, reflecting that overall, people’s decision are not inconsistent with SWB maximization. Yet, the shape of individual preferences differ across approaches when looking at specific subpopulations. We investigate these differences and test for potential explanatory channels, particularly the roles of constraints and of individual “errors†related to aspirations, expectations or focusing illusion. We draw implications of our results for welfare analysis and policy evaluation.
    Date: 2015–02–09
  9. By: Coral del Río; Olga Alonso-Villar
    Abstract: This paper deals with the quantification of the well-being loss/gain of a demographic group associated with its occupational segregation, an issue that, as far as we know, has not been formally tackled in the literature. For this purpose, this paper proposes several properties to take into account when measuring this phenomenon. Building on standard assumptions of social welfare functions, it also defines and characterizes a parameterized family of indices that satisfy those properties. In particular, the indices are equal to zero when either the group has no segregation or all occupations have the same wage, and the indices increase when individuals of the group move into occupations that have higher wages than those left behind. In addition, ceteris paribus, the indices increase more the lower the wage is of the occupation left behind, and consider small improvements for many people to be more important than large improvements for a few.
    Keywords: Segregation measures; occupations; well-being
    JEL: D63 J15 J16
    Date: 2015–02
  10. By: Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria E.; Salazar, Mateo
    Abstract: This paper investigates the causal consequences of Tropical Storm Agatha (2010) -- the strongest tropical storm ever to strike Guatemala since rainfall records have been kept -- on household welfare. The analysis reveals substantial negative effects, particularly among urban households. Per capita consumption fell by 12.6 percent, raising poverty by 5.5 percentage points (an increase of 18 percent). The negative effects of the shock span other areas of human welfare. Households cut back on food consumption (10 percent or 43 to 108 fewer calories per person per day) and reduced expenditures on basic durables. These effects are related to a drop in income per capita (10 percent), mostly among salaried workers. Adults coped with the shock by increasing their labor supply (on the intensive margin) and simultaneously relying on the labor supply of their children and withdrawing them from school. Impact heterogeneity is associated with the intensity of the shock, food price inflation, and the timing of Agatha with respect to the harvest cycle of the main crops. The results are robust to placebo treatments, household migration, issues of measurement error, and different samples. The negative effects of the storm partly explain the increase in poverty seen in urban Guatemala between 2006 and 2011, which national authorities and analysts previously attributed solely to the collateral effects of the global financial crisis.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Consumption,Climate Change Economics
    Date: 2015–01–01
  11. By: Evan Capeluck
    Abstract: Canada has long been characterized by significant regional disparities. Such inequalities can create and exacerbate regional tensions and lead to demands for further redistribution of wealth. The objective of this study is to report on the current state of provincial differences in twenty-five economic variables related to income, productivity, the labour market, well-being and fiscal capacity, and to analyze trends toward or away from convergence for these economic variables. This report also examines the factors influencing these trends and discusses the implications for the federation.
    Keywords: Regional Disparities, Inequality, Regional, Redistribution, Income, Productivity, Labour Markets, Well-Being, Fiscal Capacity, Convergence, Federation
    JEL: N92 O47 J20 J10 J30 J40
    Date: 2014–05
  12. By: Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrea Vigorito (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: The present document gathers the main results of a survey conducted by the Instituto Nacional de Estadística (INE). The survey was conducted in the framework of a cooperation agreement between the INE, the Social Development Ministry (MIDES) and Universidad e la República (UDELAR). The aim of this agreement was studying the access to cash transfers programs of sectors of the Uruguayan low income population. In the survey 15% of lower income households were interviewed by Encuesta Contínua de Hogares (the Urugayan national household survey) between February and may 2010 (first wave). Under this agreement, the households were interviewed again between October and November 2010 (second wave). Despite noticeable economic growth and significant efforts made in Uruguay in recent years to reduce poverty and extreme poverty, a significant number of households still have incomes below the minimum determined by the National Institute of Statistics, at the time facing hardship in other dimensions of well-being, such as housing, education and access to the health care system. For the purpose of providing new elements for the discussion on the evolution of the welfare and the scope of current policies of direct cash transfers to the most underprivileged sectors, this paper examines the access to social benefits by the Uruguayan 15% lower income population. Also, is a very exploratory analysis on the evolution of the socio-economic situation of recipient households of the cash transfer program Asignaciones Familiares-Plan de Equidad (AFAM-PE), based on the concatenation of the information generated in this study with administrative records of the social security system.
    Keywords: cash transfer programs, poverty, Uruguay
    JEL: I32 I38
    Date: 2015–01
  13. By: David, Alexandra; Terstriep, Judith; Welschhoff, Jessica
    Abstract: The improvement and sustainability of urban transport systems is a necessity for quality of life, wellbeing and safety of citizens. Germany, France, Norway, the UK, the Netherlands and Sweden are anticipated to be the top six European countries for Battery Electric Vehicles (BEVs) on the road in 2020. In total 4 regional and 24 national electromobility-related RTDI policy measures have been identified for Austria, Czech Republic, France, Hungary, Germany and Switzerland, comprising top-down and bottom-up initiatives. Research-driven clusters (RDCs) entail a high potential to stimulate electromobility-related RTDI activities at the regional level and increase the competitiveness of regional economies. Electromobility is expected to become a central topic in several regions. Hence, it is even more important for regions engaging in this field to specialise. "Smart Specialisation Strategies" (S3) can be viewed as promising approach for "specialised diversification" that exploits the economies derived from related variety.
    Date: 2015

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