nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒08‒30
ten papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Happier workers, higher profits By Alex Bryson; John Forth; Lucy Stokes
  2. Would You Choose to be Happy? Tradeoffs between Happiness and the Other Dimensions of Life in a Large Population Survey By Matthew D. Adler; Paul Dolan; Georgios Kavetsos
  3. Consumption Smoothing and the Welfare Cost of Uncertainty By Yonas Alem; Jonathan Colmer
  4. Economic Growth Evens-Out Happiness: Evidence from Six Surveys By Andrew E. Clark; Sarah Flèche; Claudia Senik
  5. Health, Work and Working Conditions: A Review of the European Economic Literature By Thomas Barnay
  6. Remittances and Relative Concerns in Rural China By Akay, Alpaslan; Bargain, Olivier B.; Giulietti, Corrado; Robalinod , Juan D.; Zimmermann, Klaus F.
  7. Relative Income and Life Satisfaction of Turkish Immigrants: The Impact of a Collectivistic Culture By Dumludag, Devrim; Gokdemir, Ozge; Vendrik, Maarten C.M.
  8. Combining the capability approach and Max-Neef’s needs approach for a better assessment of multidimensional well-being and inequalities: a case study perspective with vulnerable teenagers of the region of Paris (France) By Pelenc, Jérôme
  9. The Pleasures and Pains of Self-Employment: A Panel Data Analysis of Satisfaction with Life, Work, and Leisure By Peter van der Zwan; Jolanda Hessels; Cornelius A. Rietveld
  10. Multifamily Housing and Resident Life Satisfaction: Evidence from the European Social Survey By Nessa Winston

  1. By: Alex Bryson; John Forth; Lucy Stokes
    Abstract: Alex Bryson and colleagues find that UK employees' job satisfaction is positively associated with workplace financial performance.
    Keywords: Subjective well being, job satisfaction, job-related affect, workplace performance
    JEL: J28
    Date: 2015–07
    URL: http://d.repec.org/n?u=RePEc:cep:cepcnp:445&r=all
  2. By: Matthew D. Adler; Paul Dolan; Georgios Kavetsos
    Abstract: A large literature documents the correlates and causes of subjective well-being, or happiness. But few studies have investigated whether people choose happiness. Is happiness all that people want from life, or are they willing to sacrifice it for other attributes, such as income and health? Tackling this question has largely been the preserve of philosophers. In this article, we find out just how much happiness matters to ordinary citizens. Our sample consists of nearly 13,000 members of the UK and US general populations. We ask them to choose between, and make judgments over, lives that are high (or low) in different types of happiness and low (or high) in income, physical health, family, career success, or education. We find that people by and large choose the life that is highest in happiness but health is by far the most important other concern, with considerable numbers of people choosing to be healthy rather than happy. We discuss some possible reasons for this preference.
    Keywords: Happiness, subjective well-being, preferences
    JEL: D6 H00 I00 I31
    Date: 2015–08
    URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1366&r=all
  3. By: Yonas Alem; Jonathan Colmer
    Abstract: When agents are unable to smooth consumption and have distorted beliefs about the likelihood of future income realisations, uncertainty about future states of the world has a direct effect on individual welfare. However, separating the effects of uncertainty from realised events and identifying the welfare effects of uncertainty both present a number of empirical challenges. Combining individual-level panel data from rural and urban Ethiopia with high-resolution meteorological data, we estimate the empirical relevance of uncertainty on objective consumption and subjective well-being. While negative income shocks affect both objective consumption measures and subjective well-being, greater income uncertainty only has an effect on subjective well-being. A one standard deviation change in income uncertainty is equivalent to a one standard deviation change in realised consumption. These results indicate that the welfare gains from further consumption smoothing are substantially greater than estimates based solely on consumption fluctuations.
    Keywords: Uncertainty, Consumption Smoothing, Subjective Well-Being
    JEL: D8 O12 I3
    Date: 2015–08
    URL: http://d.repec.org/n?u=RePEc:cep:stieop:59&r=all
  4. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Sarah Flèche (Centre for Economic Performance - LSE - London School of Economics); Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), UP4 - Université Paris-Sorbonne)
    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.
    Date: 2014–11
    URL: http://d.repec.org/n?u=RePEc:hal:psewpa:hal-01080877&r=all
  5. By: Thomas Barnay (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS)
    Abstract: Economists have traditionally been very cautious when studying the interaction between employment and health because of the two-way causal relationship between these two variables: health status influences the probability of being employed and, at the same time, working affects the health status. Because these two variables are determined simultaneously,researchers control endogeneity skews (e.g., reverse causality, omitted variables) when conducting empirical analysis. With these cave at sin mind, the literature finds that a favourable work environment and high job security lead to better health conditions. Being employed with appropriate working conditions plays a protective role on physical health andpsychiatric disorders. By contrast, non-employment and retirement are generally worse for mental health than employment,and over employment has a negative effect on health. These findings stress the importance of employment and of a dequateworking conditions for the health of workers. In this context, it is a concern that a significant proportion of European workers(29%) would like to work fewer hours because unwanted long hours are likely to signal a poor level of job satisfaction andinadequate working conditions, with detrimental effects on health. Thus, in Europe, labour-market policy has increasingly paid attention to jobs ustainability and job satisfaction. The literature clearly invites employers to take better account of the worker preferences when setting the number of hours worked. Overall, a specific “flexicurity” (combination of high employment protection, job satisfaction and activelabour-market policies) is likely to have a positiveeffect on health.
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01100259&r=all
  6. By: Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University); Bargain, Olivier B. (Aix-Marseille Université and IZA); Giulietti, Corrado (IZA); Robalinod , Juan D. (Cornell University); Zimmermann, Klaus F. (IZA and Bonn University)
    Abstract: The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a “status-effect” with respect to income and of a “signal-effect” with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants’ net remittances calculated using counterfactual income and expenditures.
    Keywords: positional concerns; remittances; subjective well-being
    JEL: C90 D63
    Date: 2015–08
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0623&r=all
  7. By: Dumludag, Devrim (Marmara University); Gokdemir, Ozge (Istanbul University); Vendrik, Maarten C.M. (Maastricht University)
    Abstract: This study examines the effects of social comparison with a wide range of reference groups on the life satisfaction of Turkish immigrants in the Netherlands. For two sets of ethnic and life-domain reference groups, results are obtained that deviate from the findings of recent studies and that suggest the impact of the collectivistic subculture of the Turkish immigrants. Perceived importance of income comparison with Dutch natives is positively correlated to life satisfaction, supporting an interpretation of this comparison as a positive emancipatory stimulus in the pursuit of self-improvement of the Turkish immigrants. Perceived importance of income comparison with relatives in the Netherlands is positively correlated to life satisfaction as well, which can be interpreted in terms of an underlying feeling of connectedness with one's relatives. On the other hand, Turkish immigrants who have a higher household income than relatives are significantly less satisfied with their life, suggesting the unattractiveness of deviating too much from one's relatives. For other reference groups some interesting results are obtained as well.
    Keywords: happiness, life satisfaction, relative income, social comparison, collectivistic, immigrants
    JEL: I31 Z13 J15
    Date: 2015–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9282&r=all
  8. By: Pelenc, Jérôme
    Abstract: Few works have tried to articulate the Capability Approach originally developed by Amartya Sen and the Fundamental Human Needs approach developed by Manfred Max-Neef. The goal of this paper is precisely to combine those two approaches in order (i) to build a truly multidimensional framework for assessing well-being and inequalities and (ii) to capture the complexity of human well-being from freedom of choice to needs satisfaction. To test this new framework we have conducted an empirical experimentation with vulnerable teenagers (15-17 years old) living in the suburbs of Paris (Dammarie-les-Lys, France) who suffer strong social exclusion and education difficulties. We have organized participatory workshops and then a questionnaire survey with the vulnerable groups and with a control group in order to assess subjective well-being inequalities. The results clearly demonstrate that the group of vulnerable teenagers suffers inequalities in all dimensions of well-being that we tested. These dimensions correspond to the nine axiological needs (Subsistence, Protection, Affection, Understanding, Participation, Leisure, Creation, Identity, Freedom) and the four existential needs (Being, Having, Doing, Interacting) that Max-Neef identifies in his matrix. Addressing inequalities in all of these dimensions clearly help to operationalize multidimensional well-being assessment. Regarding the theoretical side, on the one hand, our tentative for articulating the two approaches allows us to introduce the two categories of axiological and existential capabilities, to better link the concepts of capabilities, functionings, satisfiers and needs and finally to debate further the idea of a list of well-being dimensions by offering a matrix of ten capabilities. Moreover, the fundamental human approach is complemented by integrating freedom of choice into the conceptualization and assessment of well-being. This allows investigating the potential causes of needs deprivation by using the different parameters that condition the acquisition of capabilities.
    Keywords: Capabilities; fundamental human needs; subjective well-being; inequalities; education; vulnerable teenagers
    JEL: I24 I31 I32
    Date: 2014–08–25
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:66277&r=all
  9. By: Peter van der Zwan (Erasmus University Rotterdam, the Netherlands); Jolanda Hessels (Erasmus University Rotterdam, the Netherlands); Cornelius A. Rietveld (Erasmus University Rotterdam, the Netherlands)
    Abstract: We investigate how a transition from paid employment to self-employment in the labor market influences life satisfaction. Furthermore, we consider the dynamics of work and leisure satisfaction because the balance between work and leisure is an important element of life satisfaction. Fixed-effects regressions using German Socio-Economic Panel data (1984-2012) reveal that switching to self-employment benefits life and work satisfaction. The effects on life satisfaction are weak and temporary, but they are pronounced and relatively persistent for work satisfaction. However, the gain in work satisfaction is outweighed by a decrease in leisure satisfaction, thus placing work-life balance under severe pressure.
    Keywords: Self-employment; Entrepreneurship; Life satisfaction; Work satisfaction; Work-life balance
    JEL: I31 J24 J28 J31 L26
    Date: 2015–08–18
    URL: http://d.repec.org/n?u=RePEc:tin:wpaper:20150099&r=all
  10. By: Nessa Winston (School of Social Policy, Social Work and Social Justice, University College Dublin)
    Abstract: Much of the literature on sustainable communities and compact cities calls for higher density housing including multifamily dwellings. Some case studies suggest problems with such dwellings. However, rigorous comparative research on this topic has not been conducted to date. This paper draws on a high quality, comparative dataset, the European Social Survey, to analyse a) the quality of multifamily dwellings in European urban areas, b) the characteristics of residents of these dwellings, c) their life satisfaction compared with those living in detached housing and d) the relative importance of built form in explaining life satisfaction. One of the main findings from the multivariate analyses is that built form, including residing in multifamily housing, is not a statistically significant predictor of life satisfaction when you control for standard predictors of life satisfaction (e.g. health, employment and income) and housing and neighbourhood quality.
    Keywords: Quality of life, built form, housing density, life satisfaction, compact cities
    Date: 2015–08–12
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:201515&r=all

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