nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒11‒07
eleven papers chosen by

  1. At the origin of the notion of “creative goods” in economics: Scitovsky and Hawtrey By Antonio Bariletti; Eleonora Sanfilippo
  2. Comparing Happiness across the World: Does Culture Matter? By Carrie Exton; Conal Smith; Damien Vandendriessche
  3. Direct Evidence for Income Comparisons and Subjective Well-Being across Reference Groups By Laszlo Goerke; Markus Pannenberg
  4. Do People Seek to Maximize Their Subjective Well‐Being? By Fleurbaey, Marc; Schwandt, Hannes
  5. Early Maternal Employment and Non-cognitive Outcomes in Early Childhood and Adolescence: Evidence from British Birth Cohort Data By Andrew E. Clark; Warn N. Lekfuangfu; Nattavudh Powdthavee; George Ward
  6. Economic success without well being? The case of Hungary By Annamaria Artner
  7. Education and Human Rights for Sustainable Human Development By Gianna Alessandra Sanchez Moretti
  8. Examining Utility Function of “Happiness” Indicator in the Context of Economic Growth and Income Inequality By Asuman Çukur
  9. Hukou Changes and Subjective Well-Being By Tani, Massimiliano
  10. More than A to B: the role of free bus travel for the mobility and wellbeing of older citizens in London By Judith Green; Alasdair Jones; Helen Roberts
  11. Towards a Distribution-Sensitive Better Life Index: Design, Data and Implementation By Koen Decancq

  1. By: Antonio Bariletti (University of Cassino and Lazio Meridionale); Eleonora Sanfilippo (University of Cassino and Lazio Meridionale)
    Abstract: The notion of “creativity” has assumed a growing importance in the recent economic literature on happiness, motivations and life-satisfaction. Starting from the seminal contribution of Scitovsky, the effects of “creative goods” and “creative activities” on consumers’ well-being, in connection with cultural, sociological, psychological and educational aspects, have been analyzed. An increasing interest in these concepts has also been shown recently by policy-makers and international institutions (see, e.g., the UNCTAD Reports on Creative Economy, 2010, 2013), in particular in relation to economic growth. On the other hand, a clear and rigorous analytical definition of this category of goods and activities and deep investigation of its peculiarity in comparison with other types of products and activities, broadly defined as comfort or defensive ones, is still lacking in the economic literature. This is why, despite its wide use in economics, the nature of the distinction still remains somehow vague and not univocal. The aim of this paper is to provide a contribution to help clarify this distinction by reconstructing its meaning and scope in the works of Scitovsky (1976, 1992) and Hawtrey (1925) – the first economists who have tried to provide an analytical content to the notion of creative goods and activities in their theoretical frameworks.
    JEL: B31 B41 D01 D11
    Date: 2015–10
  2. By: Carrie Exton; Conal Smith; Damien Vandendriessche
    Abstract: The issue of cultural bias in subjective well-being data is often raised, but rarely well-documented. This paper reviews the main barriers to interpreting national differences in subjective well-being, noting the challenge of distinguishing between cultural bias (understood as measurement error) and cultural impact (where culture plays a more substantive role in shaping how people experience their lives). Several methods are then used to attempt to quantify the role of culture in subjective well-being, drawing on multiple waves of the Gallup World Poll, conducted in over 150 countries and territories. Regression analysis is used to identify country-specific fixed effects, which capture unexplained variance in subjective well-being at the country level, over and above a basic set of socio-economic and demographic controls. These country fixed effects then become the subject of three further investigations. The first examines whether survey measures of “cultural values” are able to explain the size and direction of country fixed effects; the second considers the evidence for international differences in “appraisal styles” (e.g. a more positive or negative outlook on life in general); and the third explores the “cultural transmission” of subjective well-being, focusing on the experiences of migrants to separate the effects of culture from those of broader life circumstances. The paper shows that, although life circumstances explain well the overall pattern of cross-country variation in subjective well-being, a gap is observed for some countries. Culture may account for some 20% of the country-specific unexplained variance. This combined effect of “cultural impact” and “cultural bias” is small when compared to the role of objective life circumstances in explaining subjective well-being outcomes.<BR>Si la question des biais culturels dans les données du bien-être subjectif se pose souvent, elle a rarement été documentée de manière satisfaisante. Le présent document passe en revue les principaux obstacles à l’interprétation des différences nationales observées en termes de bien-être subjectif, tout en soulignant le défi d’établir une distinctionentre le concept de biais culturel d’une part (entendu comme une erreur de mesure) et celui d’impact culturel d’autre part (lié à l’idée que la culture contribue plus fondamentalement à façonner la manière dont les individus perçoivent leur vie). Plusieurs méthodes sont ensuite utilisées pour quantifier le rôle de la culture dans le bien-être subjectif, s’appuyant sur les nombreuses enquêtes Gallup World Poll menées dans plus de 150 pays et territoires. Une analyse de régression permet de repérer les effets fixes propres à un pays, ce qui permet de faire ressortir les variances inexpliquées (à la hausse ou la baisse) du bien-être subjectif national par rapport à un ensemble élémentaire de variables de contrôle socio-économiques et démographiques. Ces effets fixes propres à un pays font ensuite l’objet de trois analyses plus approfondies. La première permet de vérifier si les mesures des « valeurs culturelles » ressortant du sondage sont susceptibles d’expliquer l’ampleur et l’orientation de ces effets fixes ; la seconde permet de rechercher des preuves de l’existence de différences nationales dans les « critères d’appréciation » (une perception plus positive ou négative de la vie en général, par exemple) ; la troisième permet d’étudier la « transmission culturelle » du bien-être subjectif, en mettant l’accent sur les expériences des immigrés afin de distinguer les effets de la culture des éléments propres à un contexte national. Il ressort de cette étude que, bien que les circonstances de la vie expliquent de manière convaincante le profil des variations du bien-être subjectif d’un pays à l’autre, on observe un écart très net dans certains pays. La variable culturelle pourrait alors représenter 20 % de la variance nationale inexpliquée. Le rôle de l’effet combiné de « l’impact culturel » et du « biais culturel » est toutefois modeste par rapport à celui des circonstances objectives de la vie lorsqu’il s’agit d’expliquer les résultats des enquêtes sur le bien-être subjectif.
    Date: 2015–11–05
  3. By: Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Markus Pannenberg (University of Applied Sciences Bielefeld, DIW, Berlin and IZA, Bonn)
    Abstract: This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB
    Keywords: Income Comparisons, German Socio-Economic Panel (SOEP), Relative Income, Subjective Well-Being
    JEL: D31 D62 I31
    Date: 2015–09
  4. By: Fleurbaey, Marc (Princeton University); Schwandt, Hannes (University of Zurich)
    Abstract: In a new survey we ask respondents, after a standard Subjective Well‐Being (SWB) question, if they can think of changes in their lives that would improve their SWB score. If the SWB score is just one argument among others in the respondents' goals in life, they should easily find ways to improve it, at the expense of other dimensions they care about. Our results suggest that close to 90% of the respondents actually seek to maximize their SWB. The life satisfaction question appears the best contender as the "maximand" in the contest, before the ladder‐of‐life question and felt happiness. Among the other goals that people pursue and for which they are willing to sacrifice some of their SWB, the prominent appear to be about their relatives and about their future self.
    Keywords: subjective well‐being, life satisfaction, happiness, life goals, utility
    JEL: D03 D60
    Date: 2015–10
  5. By: Andrew E. Clark; Warn N. Lekfuangfu; Nattavudh Powdthavee; George Ward
    Abstract: We analyse the relationship between early maternal employment and child emotional and behavioural outcomes in early childhood and adolescence. Using rich data from a cohort of children born in the UK in the early 1990s, we find little evidence of a strong statistical relationship between early maternal employment and any of the emotional outcomes. However, there is some evidence that children whose mother is in full-time employment at the 18th month have worse behavioural outcomes at ages 4, 7, and 12. We suggest that these largely insignificant results may in part be explained by mothers who return to full-time work earlier being able to compensate their children: we highlight the role of fathers' time investment and alternative childcare arrangements in this respect.
    Keywords: Child outcomes, maternal employment, well-being, conduct, ALSPAC
    JEL: D1 I3 J6
    Date: 2015–10
  6. By: Annamaria Artner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: As measured by the most frequently used economic indicators, Hungary has recently seen a good performance. Here, the author presents indicators of the labour market and social conditions in the last decade to examine if this has led to the increase of the well-being of the population. She finds that the majority of these indicators portray an inverted U-turn, from the viewpoint of the majority of the population – illustrating that most of the indicators improved in the first half, but deteriorated in the second half of the period under examination. In most cases, the most recent values show deterioration relative to the beginning of the decade.
    Keywords: government policy, inequality, poverty, unemployment, well-being
    JEL: J31 H50 I3
    Date: 2014–10
  7. By: Gianna Alessandra Sanchez Moretti (IPC-IG)
    Abstract: "The 1986 Declaration on the Right to Development defines development as a comprehensive economic, social, cultural and political process aiming to improve the well-being of populations and individuals, in the present and the future. Development is considered both a 'process' and a 'level of attainment' encompassing various elements that constitute well-being. From this premise, it can be asserted that one element that can serve as a driver of development is education. However, it is alleged that the international community and governments rarely recognise and invest in the full potential and transformative power of education as a catalyst for human development (UNESCO 2014)." (...)
    Keywords: Education, Human Rights, Sustainable Human Development
    Date: 2015–10
  8. By: Asuman Çukur (Yildirim Beyazit University)
    Abstract: The happiness studies in economics substantially increased over past decades. Especially the nature of relationship between economic growth (income, relative income and income change, unemployment, inflation, etc,) and happiness has been the center of many debates among economists and other social scientists. Those studies have been applied different economical models in which different national and cross-national micro and macro datasets through cross sectional and panel analysis are used. Most of these studies have been provided that happiness or related concepts (subjective wellbeing, etc,) could be an important proxies or experienced utilities for economic growth. On the other hand seminal works of Easterlin (1974,1995) have cast a serious doubt on the utility function of happiness which is called Easterlin Paradox. These studies showed that even though substantial income growth in Western countries over the last fifty years, income changed did not relate to rise in reported happiness level. From these perspectives economic growth per se has little impact on happiness and therefore should not be primary goal of economic and public policies. In this context I try to review the related empirical studies and approaches to assess the utility function of happiness. This critique especially will focus on the role of economic inequality and related other factors that can influence the link between income and happiness. Also, the methodological problems (e.g., using aggregate data, cross-sectional data, distribution of happiness data, etc.) in those studies will be discussed thoroughly. Especially, findings and methodological discussions from health economics (e.g., income and health relationship) will be utilized to assess the utility function of happiness. Finally, these findings and arguments will be discussed in Turkish economical context where very few study available in this topic.
    Keywords: Happiness, Income, Income Inequality
    JEL: D31 D6 I3
    Date: 2015
  9. By: Tani, Massimiliano (IZA)
    Abstract: The literature on subjective well-being has highlighted the negative effects associated with the restrictions and inequality imposed by the hukou system on China's rural population. However, quantifying the cost of holding a rural hukou has generally been problematic, principally for lack of suitable data or measurements. Thanks to RUMiC, a new longitudinal database on China, this limitation can be overcome by exploiting exogenous changes in hukou status due to expropriation. The results support that granting an urban hukou substantially enhances subjective well-being within the household, especially for the household heads. The results complement a growing literature on subjective well-being focusing on China.
    Keywords: subjective well-being, expropriation, China
    JEL: D19 I31 J61 R20
    Date: 2015–10
  10. By: Judith Green; Alasdair Jones; Helen Roberts
    Abstract: This study contributes to the literature on mobility and wellbeing at older ages through an empirical exploration of the meanings of free bus travel for older citizens, addressing the meanings this holds for older people in urban settings, which have been under-researched. Taking London as a case study, where older citizens have free access to a relatively extensive public transport network through a Freedom Pass, we explore from a public health perspective the mechanisms that link this travel benefit to determinants of wellbeing. In addition to the ways in which the Freedom Pass enabled access to health-related goods and services, it provided less tangible benefits. Travelling by bus provided opportunities for meaningful social interaction; travelling as part of the ‘general public’ provided a sense of belonging and visibility in the public arena – a socially acceptable way of tackling chronic loneliness. The Freedom Pass was described not only as providing access to essential goods and services but also as a widely prized mechanism for participation in life in the city. We argue that the mechanisms linking mobility and wellbeing are culturally, materially and politically specific. Our data suggest that in contexts where good public transport is available as a right, and bus travel not stigmatised, it is experienced as a major contributor to wellbeing, rather than a transport choice of last resort. This has implications for other jurisdictions working on accessible transport for older citizens and, more broadly, improving the sustainability of cities.
    Keywords: bus travel; loneliness; mobility; wellbeing
    JEL: L91 L96
    Date: 2014–03
  11. By: Koen Decancq
    Abstract: The Better Life Index was introduced by the OECD as a tool to chart the multi-dimensional well-being of OECD member countries, Brazil and the Russian Federation. However, the Better Life Index relies only on aggregate country-level indicators, and hence is insensitive to how multi-dimensional well-being outcomes are distributed within countries. This paper discusses how a distribution-sensitive Better Life Index could be designed and implemented. Based on five concrete recommendations for the design of the index, a family of indices is suggested. These indices are shown to be decomposable in interpretable building blocks. While a rich and comprehensive micro-level data set is necessary to implement the distribution-sensitive Better Life Index, no such data set is currently available for all OECD member countries. The paper proposes a ‘synthetic’ data set that relies on information about macro-level indicators and micro-level data from the Gallup World Poll. The implementation of the distribution-sensitive Better Life Index is illustrated with this synthetic data set. While the small sample size and other survey features of the Gallup World Poll imply a number of potential biases, illustrative calculations based on this synthetic data set indicates that, when taking distribution into account, Nordic countries are top-ranked whereas Greece, the Russian Federation and Turkey occupy the bottom positions. The results indicate sizeable losses due to multi-dimensional inequality for OECD member countries. Moreover, there are large differences in the level and composition of multi-dimensional inequality.<BR>L’Indicateur du vivre mieux a été lancé par l’OCDE dans le but de cartographier les multiples dimensions du bien-être dans les pays membres de l’OCDE, le Brasil et la Fédération de Russie. Il ne repose toutefois que sur des mesures agrégées à l’échelle nationale et ne permet donc pas de représenter comment se répartissent les différentes dimensions du bien-être à l’intérieur des pays. Ce document étudie la façon dont un Indicateur du vivre mieux tenant compte de cette répartition pourrait être élaboré et appliqué. À partir de cinq recommandations concrètes sur la conception de l’indicateur, un ensemble d’indices est proposé. Ces indices peuvent être décomposés en éléments interprétables. Un ensemble de microdonnées dense et exhaustif est nécessaire pour construire un indicateur tenant compte de la répartition des dimensions du bien-être, mais ces données ne sont pas encore disponibles pour l’ensemble des pays membres de l’OCDE. Ce document propose donc un ensemble de données « synthétique » qui s’appuie sur des informations relatives aux macro-indicateurs et aux micro-données de l’enquête Gallup World Poll. Même si l’étroitesse des échantillons et autres faiblesses méthodologiques de l’enquête Gallup World Poll peuvent entrainer des risques de biais, des mesures basées sur ces données « synthétiques » indiquent que, lorsqu’on tient compte de la répartition des dimensions du bien-être, les pays nordiques arrivent en tête, tandis que la Grèce, la Fédération de Russie et la Turquie occupent les derniers rangs. Les résultats montrent des pertes importantes dues aux inégalités dans la distribution des différentes dimensions du bien-être entre les pays membres de l’OCDE. En outre, on observe de grandes différences de niveau et de composition au regard des disparités multidimensionnelles.
    Keywords: well-being
    JEL: C43 I31 O1
    Date: 2015–11–05

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