nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒02‒04
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Sustainable Work By Ernest Aigner; Lucia Baratech Sanchez; Desiree Alicia Bernhardt; Benjamin Curnow; Christian Hödl; Heidi Leonhardt; Anran Luo
  2. Do methodical traps lead to wrong development strategies for welfare? A multilevel approach considering heterogeneity across industrialized and developing countries By Sibylle Puntscher; Janette Walde; Gottfried Tappeiner
  3. Measuring multidimensional inequality in the OECD Member Countries with a distribution-sensitive Better Life Index By Koen Decancq
  4. Hedonic adaptation to treatment: Evidence from a medical intervention By Marta Barazzetta; Simon Appleton; Trudy Owens
  5. Do individuals return to baseline levels of well-being after recovering from poor health? By Howley, P,;

  1. By: Ernest Aigner; Lucia Baratech Sanchez; Desiree Alicia Bernhardt; Benjamin Curnow; Christian Hödl; Heidi Leonhardt; Anran Luo
    Abstract: In a highly globalised world where all production and consumption activities are internationally intertwined and the environmental consequences of those actions are hard to identify, rethinking the role of work in our societies according to sustainability principles is a complex but highly necessary task. Salaried work has become one of the crucial indicators to analyse any country in the world. By looking at the proportion of the population that is employed, the working conditions they have, and how productive they are when performing their tasks, it is possible to produce an image of a country’s society to assist in the understanding of the levels of well-being of its citizens. Work and labour markets not only largely structure the way the economy and society function, they also heavily influence an individual’s life satisfaction and happiness; virtually the entire life of a person is designed around their work. Given the relevance work has at all levels, diving into the concept of sustainable work is a crucial project due to the urgency of environmental matters. The biggest role humanity faces is how to transform our societies so that they are sustainable from a social, ecological and economic perspective. For the sustainable society vision, work would need to be drastically altered in order to adapt it to the multi-dimensional sustainability requirements. This research aims to contribute to this enterprise by identifying the conditions that define the sustainability of work and then present an overview of seven European countries from this perspective. The present document introduces our conceptualisation of work and explains its main components. These are designed around the idea of the sustainable society and are composed of individuals’ needs, equity and planetary boundaries. The final section concludes and introduces the different country-case studies.
    Date: 2016–01
  2. By: Sibylle Puntscher; Janette Walde; Gottfried Tappeiner
    Abstract: Subjective well-being (SWB) is becoming increasingly important as welfare concept in both scientific research and politics, as it comprises additional welfare aspects compared to the GDP per capita. Consequently, it becomes important to explicitly identify its driving forces and clarify still ambivalent findings of the literature. For this purpose, with a multilevel model we investigate the extent to which individual-level and national variables together influence subjective well-being. Moreover, we expect that life satisfaction of people in developing countries is determined differently than life satisfaction of people in industrialized countries. The database used includes both individual and national variables and is split into two subsamples of 40 industrialized countries and 41 developing countries. The results show that the national environment is highly important for a person’s SWB. Thus, neglecting this national level would generate biased estimates. Moreover, the split into industrialized and developing countries shows that statistically significant and substantial differences in the effects on life satisfaction exist. Important differences are found for example regarding the income variables. We identify a saturation effect of income on the individual level, whose level is however different depending on the development status of the countries. Moreover, on the aggregated level a significant impact of GDP per capita is found for the developing but not for the industrialized countries. Thus, this study indicates that multilevel modelling approaches are necessary to obtain robust results and that the impact of macroeconomic variables diverges in dependence of the country’s development status.
    Keywords: Subjective well-being, life satisfaction, developing vs. industrialized countries, institutional quality, multilevel modelling
    JEL: D6 I31 O1 O2
    Date: 2016–01
  3. 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
  4. By: Marta Barazzetta; Simon Appleton; Trudy Owens
    Abstract: We investigate adaptation of subjective well-being using a randomised controlled trial. We find that providing medical equipment to a random sample of Ugandan adults with lower limb disabilities has a positive effect on their physical health, using both objective and self-reported measures. Treated patients experience a significant improvement in life satisfaction initially, but the effect is not prolonged. After one year, life satisfaction returns to the pre-treatment level. This evidence of adaptation is supported by observations of changes in reference levels and is robust to alternative estimation methods including instrumental variable estimation and intention-to-treat analysis.
    Keywords: Happiness, adaptation, health
    Date: 2015
  5. By: Howley, P,;
    Abstract: While much recent research has focused on what happens to individual’s well-being following the onset of health conditions, one as yet unaddressed question is what happens to wellbeing once individuals are no longer suffering from those same health conditions. If treatment has long term adverse effects, or if individuals become more worried about their health even when the health condition no longer represents a significant impediment, then individuals may not return to pre-disability levels of well-being. Using a large nationally representative dataset, I compare the well-being of individuals who report that they were previously diagnosed with one of 13 different health conditions but now no longer have those health conditions, to the well-being of individuals who report that they have never been diagnosed with those same health conditions. For many of the health conditions examined, and using a number of different well-being measures, I observed significant differences in the well-being of both groups. This could suggest that individuals may not return to pre-disability levels of quality of lifeonce they recover from health conditions.
    Keywords: life satisfaction; health; adaptation:
    JEL: I1 I31
    Date: 2016–01

This nep-hap issue is ©2016 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.