nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒03‒23
six papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The Welfare Costs of Well-being Inequality By Leonard Goff; John F. Helliwell; Guy Mayraz
  2. National Happiness and Genetic Distance: A Cautious Exploration By Proto , Eugenio
  3. Financial Services, Economic Growth and Well-Being: A Four-Pronged Study By Ravi Kashyap
  4. Building subjective well-being indicators at the subnational level: A preliminary assessment in OECD regions By Monica Brezzi; Marcos Diaz Ramirez
  5. Energy Boom and Gloom? Local Effects of Oil and Natural Gas Drilling on Subjective Well-Being By Karen Maguire; John V. Winters
  6. Putting a price tag on security: Subjective well-being and willingness-to-pay for crime reduction in Europe By Brenig, Mattheus; Proeger, Till

  1. By: Leonard Goff; John F. Helliwell; Guy Mayraz
    Abstract: If welfare is measured using satisfaction with life (SWL), its variance is a natural measure of inequality that incorporates all the determinants of well-being with the same weights that determine welfare itself. In this paper we explore this possibility empirically in three different ways. First we show that inequality of subjective well-being has a negative effect on life satisfaction considerably greater than does income inequality. Second, we show that this comparative result is stronger for those who report themselves as valuing equality. Finally we show that social trust, which has been shown to support subjective well-being both directly and indirectly, is more fully explained by well-being inequality than by income inequality.
    JEL: D6 D63 I31
    Date: 2016–01
  2. By: Proto , Eugenio (Department of Economics, University of Warwick)
    Abstract: This paper studies a famous unsolved puzzle in quantitative social science. Why do some nations report such high levels of mental well-being? Denmark, for instance, regularly tops the league table of rich countries’ happiness; Britain and the US enter further down; some nations do unexpectedly poorly. The explanation for the longobserved ranking -- one that holds after adjustment for GDP and other socioeconomic variables -- is currently unknown. Using data on 131 countries, the paper cautiously explores a new approach. It documents three forms of evidence consistent with the hypothesis that some nations may have a genetic advantage in well-being.
    Keywords: Well-being, international, happiness, genes, 5-HTT, countries
    JEL: I30 I31
    Date: 2016
  3. By: Ravi Kashyap
    Abstract: A four-pronged approach to dealing with Social Science Phenomenon is outlined. This methodology is applied to Financial Services, Economic Growth and Well-Being. The four prongs are like the four directions for an army general looking for victory. Just like the four directions, we need to be aware that there is a degree of interconnectedness in the below four prongs. -Uncertainty Principle of the Social Sciences -Responsibilities of Fiscal Janitors -Need for Smaller Organizations -Redirecting Growth that Generates Garbage The importance of gaining a more profound comprehension of welfare and delineating its components into those that result from an increase in goods and services, and hence can be attributed to economic growth, and into those that are not related to economic growth but lead to a better quality of life, is highlighted. The reasoning being that economic growth alone is an inadequate indicator of well-being. Hand in hand with a better understanding of the characteristics of welfare, comes the need to consider the metrics we currently have that gauge economic growth and supplement those with measures that capture well-being more holistically.
    Date: 2016–03
  4. By: Monica Brezzi; Marcos Diaz Ramirez
    Abstract: This paper provides, for the first time, estimates of subjective well-being variables in 373 OECD subnational regions, allowing comparison of various measures of how people experience and evaluate their lives within and across all 34 OECD countries. Different weighting strategies as well as several robustness checks have been carried out to ensure regional representativeness and to provide reliable indicators. The results show that it is possible to obtain robust regional estimates of subjective well-being through the Gallup World Poll for the variables satisfaction with life and social support network. These estimates could be included in the OECD Regional Well-Being Database to provide two additional well-being dimensions measured uniquely with subjective indicators. In addition to these two variables, the paper explores the feasibility of other subjective indicators, either from Gallup or the European Statistics on Income and Living Standards (EU SILC), which are particularly meaningful when measured at the city or regional levels, such as satisfaction with the living environment, satisfaction with commuting time, trust in the political system, and feeling of safety in the community. Finally, a regression analysis is performed to give an insight of the explanatory power of both individual and regional specific characteristics to self-reported life satisfaction. The results show that regional fixed effects capture around 10 percentage points of the variation in life satisfaction, of which 30% can be associated to observable regional characteristics such as mortality rate and air pollution. Furthermore, life satisfaction tends to be negatively affected not only by the individual unemployment status but also by the level of unemployment of the region; in the OECD area, everything else equal, being unemployed is associated with 7 percentage points less of life satisfaction compared to someone that is employed; whereas, an increase of 1 percentage point in the unemployment rate at the regional level is related with 0.4 percentage points less of satisfaction with life as a whole.
    Keywords: subjective well-being, regional disparities, access to services, World Gallup Poll, European Statistics on Income and Living Conditions
    JEL: I31 R11
    Date: 2016–03–04
  5. By: Karen Maguire (Oklahoma State University); John V. Winters (Oklahoma State University)
    Abstract: The United States experienced a considerable increase in oil and natural gas extraction in recent years due to technological advancements including horizontal drilling and hydraulic fracturing. Increased energy development likely creates both benefits and costs, but the net effects for local residents are not well understood. This paper examines effects of conventional and horizontal oil and natural gas drilling in Texas on subjective assessments of life-satisfaction and bad mental health days for nearby residents. Horizontal drilling has statistically significant deleterious effects on well-being, but the effects are driven by the Dallas-Fort Worth (DFW) metropolitan area, an area with both very high levels of horizontal drilling and a large urban population.
    Keywords: Energy, Drilling, Well-being, Mental Health, Natural Gas
    JEL: I10 Q40
    Date: 2016–03
  6. By: Brenig, Mattheus; Proeger, Till
    Abstract: Using information on life satisfaction and crime from the European Social Survey, we apply the life satisfaction approach (LSA) to determine the relationship between subjective well-being (SWB), income, victimization experience, fear of crime and various regional crime rates across European regions, while controlling for potentially confounding socio-economic variables. We show that fear of crime, criminal victimization and the average regionally perceived fear of crime significantly reduce life satisfaction across Europe. Building upon these results, we quantify the monetary value of improvements in public safety and its valuation in terms of individual well-being. The loss in satisfaction for victimized individuals corresponds to 21,790€. Increasing an average individual´s perception within his neighborhood from unsafe to safe yields a benefit equivalent to 12,700€. Our results regarding crime and SWB in Europe largely resemble previous results for different countries and other criminal contexts, whereby using the LSA as a valuation method for public good provision yields similar results as stated preference methods and considerably higher estimates than revealed preference methods.
    Keywords: crime rate,fear of crime,life satisfaction approach,subjective well-being,willingness-to-pay
    JEL: D10 H41 H56 I31
    Date: 2016

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