nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒01‒18
nine papers chosen by

  1. The association between experiential and material expenditures and subjective well-being: New evidence from Hungarian survey data By Tamas Hajdu; Gabor Hajdu
  2. What Aspects of Society Affect the Quality of Life of a Minority? Global Evidence from the New Gay Happiness Index By Berggren, Niclas; Nilsson, Therese; Bjørnskov, Christian
  3. Does self-employment really raise job satisfaction? Adaptation and anticipation effects on self-employment and general job changes By Dominik Hanglberger; Joachim Merz
  4. Measuring multidimensional inequality in the OECD Member Countries with a distribution-sensitive Better Life Index By Koen Decancq
  5. Does Teleworking affect Housework Division and Improve the Well-Being of Couples? By Giovanis, Eleftheris
  6. Multidimensional Poverty in Bhutan: Estimates and Policy Implications By Maria Emma Santos and Karma Ura
  7. Setting Weights in Multidimensional Indices of Well-Being By Koen Decancq and Maria Ana Lugo
  8. What Good is Happiness? By Marc Fleurbaey, Erik Schokkaert and Koen Decancq
  9. The Capability Approach and Well-Being Measurement for Public Policy By Sabina Alkire

  1. By: Tamas Hajdu (Institute of Economics - Centre for Economic and Regional Studies - Hungarian Academy of Sciences); Gabor Hajdu (Institute for Sociology - Centre for Social Sciences - Hungarian Academy of Sciences)
    Abstract: In the last decade, a number of experiments have stated that spending money on experiences rather than on material goods tends to make people happier. However, the experimental designs used to analyze the relationship between consumption and subjective well-being had several limitations: small and homogeneous samples, a direct question assessing the effect of consumption, and a potential social desirability bias due to the stigmatization of materialism. To reduce these limitations, we used a survey method. In two studies based on survey data from nationally representative samples in Hungary, we estimated linear and non-linear associations of experiential and material expenditures with life satisfaction. Although both experiential and material expenditures were positively associated with life satisfaction, evidence supporting the greater return received when buying experiences was limited. The main difference between experiential purchases and material purchases was that the marginal utility of expeiential purchases appeared to be linear, whereas the marginal utility of material purchases was decreasing. Despite the limited differences between the effects of experiential and material purchases, the results of the non-linear estimates indicate that to maximize life satisfaction, an average person should allocate more money to buying experiences rather than material goods.
    Keywords: subjective well-being, life satisfaction, consumption, experiential purchase, material purchase
    JEL: I31 D12
    Date: 2015–12
  2. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Nilsson, Therese (Lund University); Bjørnskov, Christian (Aarhyus University)
    Abstract: There is great variation in views on and treatment of minorities such as gay men across the world. We are the first to pinpoint what features of societies that are beneficial to gay men’s quality of life by making use of a unique new cross-country dataset covering 110 countries, the Gay Happiness Index. It covers how gays perceive public opinion about them, how they experience behavior towards them and how satisfied they are with their lives. Our study is based on the premise that it is important to look at minority-specific effects of policies and institutions and not solely at the effects for the average citizen, as well as the transmission mechanisms through which policies and institutions affect life satisfaction. We find that legal rights for gay men, GDP per capita, democracy and economic globalization tend to benefit gays, primarily by shaping public opinion and behavior in a pro-gay direction, while religion and living in a post-communist country exert a negative effect. These factors have largely been shown to matter for the well-being of people in general as well, which interestingly implies that “special rights” are not necessarily needed for gays but the same policies that provide a good life for most people.
    Keywords: Gays; Homosexuality; Minorities; Happiness; Wellbeing; Life satisfaction; Institutions; Democracy; Globalization
    JEL: I31 Z13 Z18
    Date: 2015–12–22
  3. By: Dominik Hanglberger (Leuphana University L\"{u}neburg, Department of Economics, Research Institute on Professions); Joachim Merz (Leuphana University L\"{u}neburg, Department of Economics, Research Institute on Professions)
    Abstract: Empirical analyses using cross-sectional and panel data found significantly higher levels of job satisfaction for the self-employed than for employees. We argue that by neglecting anticipation and adaptation effects estimates in previous studies might be misleading. To test this, we specify models accounting for anticipation and adaptation to self-employment and general job changes. In contrast to recent literature we find no specific long-term effect of self-employment on job satisfaction. Accounting for anticipation and adaptation to job changes in general, which includes changes between employee jobs, reduces the effect of self-employment on job satisfaction by two-thirds. When controlling for anticipation and adaptation to job changes, we find a positive anticipation effect of self-employment and a positive effect of self-employment on job satisfaction in the first years of self-employment. After three years, adaptation eliminates the higher satisfaction of being self-employed. According to our results, previous studies overestimate the positive long-term effects of self-employment on job satisfaction.
    Keywords: job satisfaction, self-employment, hedonic treadmill model, adaptation, anticipation, fixed effects panel estimation, German Socio-Economic Panel (SOEP).
    JEL: J23 J28 J81
    Date: 2015–12
  4. By: Koen Decancq (University of Antwerp, Belgium)
    Abstract: The Better Life Index was introduced by the OECD as a tool to chart the multidimensional well-being of its member countries. However, the Better Life Index relies only on aggregate country-level indicators, and hence is insensitive to how multidimensional well-being is distributed within countries. This paper discusses how a distribution-sensitive Better Life Index could be designed. A broad family of distribution-sensitive Better Life Indices is discussed and decomposed 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 constructs therefore 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. The illustration indicates that, when taking the distribution of well-being into account, Nordic countries are top-ranked whereas Greece, the Russian Federation and Turkey occupy the bottom positions. The results indicate considerable losses due to multidimensional inequality for OECD member countries. In addition, sizeable differences are found in the level and composition of multidimensional inequality.
    Keywords: Better Life Index, multidimensional well-being, multidimensional inequality.
    JEL: I31 C43 O1
    Date: 2015–12
  5. By: Giovanis, Eleftheris
    Abstract: This study examines the relationship between teleworking, gender roles and happiness of couples using data from the British Household Panel Survey (BHPS) during the period 1991-2009. Various approaches are followed; Probit-adapted fixed effects, multinomial Logit and three stage least squares. The results support that both men and women who are teleworkers spend more time on housework, while teleworking increases the probability that the household chores examined in this study, such as cooking, cleaning ironing and childcare, will be shared relatively to those who are non-teleworkers. In addition, women are happier when they or their spouse is teleworker, as well as, both men and women are happier when they state that the specific household chores are shared. Thus, teleworkers may be happier for the reason that they are able to face the family demands and share the household chores with their spouse, increasing their fairness belief about the household division allocation and improving their well-being, expressed by happiness.
    Keywords: Gender Roles; Household Production; Teleworking; Well-Being
    JEL: D1 D10 D13 I31 J16
    Date: 2015–11
  6. By: Maria Emma Santos and Karma Ura
    Abstract: This paper estimates multidimensional poverty in Bhutan applying a recently developed methodology by Alkire and Foster (2007) using the 2007 Bhutan Living Standard Survey data. Five dimensions are considered for estimations in both rural and urban areas (income, education, room availability, access to electricity and access to drinking water) and two additional dimensions are considered for estimates in rural areas only (access to roads and land ownership). Also, two alternative weighting systems are used: a baseline using equal weights for every dimension and another one using weights derived from the Gross National Happiness Survey (GNHS). Estimates are decomposed into rural and urban areas, by dimension and between districts. It is found that multidimensional poverty is mainly a rural phenomenon, although urban areas present non-depreciable level of deprivation in room availability and education. Within rural areas, when equal weights are used, deprivation comes at a second place, and deprivation in water at the last one. When GNHS weights are used, income deprivation has the highest contribution, followed by deprivation education, access to roads, room, electricity, land and, finally, water. Districts are ranked by their multidimensional poverty estimate and rankings are found to be robust for a wide range of poverty cutoffs. Then, the methodology is suggested as a potential formula for national poverty measurement as well as a tool for budget allocation among districts and, within them, among dimensions. Creation-Date: 2008-09
  7. By: Koen Decancq and Maria Ana Lugo
    Abstract: Multidimensional indices of well-being and deprivation have become increasingly popular, both in the theoretical and in the policy-oriented literature. By now, there is a wide range of methods to construct multidimensional well-being indices, differing in the way they transform, aggregate and weight the relevant dimensions. We use a unifying framework that allows us to compare the different approaches and to analyze the specific role of the dimension weights in each of them. In interplay with the choices on the transformation and aggregation, the weights play a crucial role in determining the trade-offs between the dimensions. Setting weights is hence inherently a delicate matter, reflecting important value judgements about the exact notion of well-being. From this perspective, we critically survey six methods that are proposed in the literature to set the weights. Creation-Date: 2008-08
  8. By: Marc Fleurbaey, Erik Schokkaert and Koen Decancq
    Abstract: In this paper we examine whether, and how, welfare economics should incorporate some insights from happiness and satisfaction studies. Our main point, based on the principle of respecting the individuals’ judgments about their own lives, is that one should not focus on reported satisfaction levels but on the ordinal preferences reported by individuals over the various dimensions of life. We illustrate with data from the Russian Longitudinal Monitoring Survey (RLMS) how to retrieve this information from happiness surveys. Creation-Date: 2009-04
  9. By: Sabina Alkire
    Abstract: This chapter presents SenÕs capability approach as a framework for well-being measurement with powerful and ongoing relevance to current work on measuring well-being in order to guide public policy. It discusses how preferences and values inform the relative weights across capabilities, then draws readersÕ attention to measurement properties of multidimensional measures that have proven to be policy-relevant in poverty reduction. It presents a dual-cutoff counting methodology that satisfies these principles and outlines the assumptions that must be fulfilled in order to interpret ensuing indices as measuring capability poverty. It then discusses BhutanÕs innovative extension of this methodology in the Gross National Happiness Index and reflects upon whether it might be suited to other contexts. It closes with some remarks on relevant material in other Handbook chapters.
    Date: 2015–03

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