nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒11‒13
four papers chosen by

  1. Non-standard work: what’s it worth? Comparing alternative measures of workers’ marginal willingness to pay By Bryan, Mark L.; Geraci, Andrea
  2. It’s Complicated: the Relationship Between GDP and Subjective Well-being By Matti Hovi; Jani-Petri Laamanen
  3. Poverty is a Public Bad: Panel Evidence from Subjective Well-being Data By Heinz Welsch; Philipp Biermann
  4. Subjective Well-Being Adult South Africans' Life Satisfaction (2008 - 2014) By Catherine Kannermeyer

  1. By: Bryan, Mark L.; Geraci, Andrea
    Abstract: We compare two alternative ways of measuring workers’ marginal willingness to pay (MWP) for four non-standard working arrangements: flexitime, part-time, night work, and rotating shifts. The first method is based on job-to-job transitions within a job search framework, while the second is based on estimating the determinants of subjective well-being. Using BHPS panel data from 1991-2008, we relate differences in the results to conceptual differences between utility and subjective wellbeing proposed recently in the happiness literature. We conclude that there is not a single representation of MWP: utility trade-offs (revealed by choices) need not be the same as wellbeing trade-offs; and we find evidence that subjective wellbeing is traded off against other goods that provide utility. Overall, we find that workers care particularly about their number of weekly hours.
    Date: 2016–10–20
  2. By: Matti Hovi; Jani-Petri Laamanen (School of Management, University of Tampere)
    Abstract: This paper estimates and compares different models of the relationship between output and subjective well-being. New results on how GDP and SWB are interlinked in the short-run and in the long-run are provided. Interpretations of both earlier results and the results obtained in this study are emphasised. Although we only study static models, it appears that the relationships are more complex than acknowledged in earlier studies. In particular, how output is associated with well-being differs between the short-term and the long-term. The variation in subjective well-being coincides with the short-run cyclical fluctuations of output. Moreover, in Europe, economic growth has an independent temporary effect above and beyond its effect on the level of economic output. Our results are consistent with the majority of earlier studies but shed more light on the relationship between GDP and subjective well-being within countries over time.
    Keywords: Subjective well-being, Life satisfaction, Happiness, Output, Income, Economic growth, Macroeconomics, Easterlin paradox, GDP, Potential output, Output gap
    JEL: I31
    Date: 2015–02
  3. By: Heinz Welsch (University of Oldenburg, Department of Economics); Philipp Biermann (University of Oldenburg, Department of Economics)
    Abstract: Previous research has found that subjective well-being (SWB) is lower for individuals classified as being in poverty. Using panel data for 39,239 individuals living in Germany from 2005-2013, we show that people’s SWB is negatively correlated with the state-level poverty ratio while controlling for individual poverty status and poverty intensity. The negative relationship between aggregate poverty and SWB is more salient in the upper segments of the income distribution and is robust to controlling for the rate of unemployment and per capita GDP. The character of poverty as a public bad suggests that poverty alleviation is a matter not only of equity, but of efficiency.
    Keywords: poverty; poverty ratio; subjective well-being; public bad; life satisfaction
    JEL: I31 I32 D60
    Date: 2016–11
  4. By: Catherine Kannermeyer
    Abstract: This discussion paper examines subjective well-being using the National Income Dynamics Study. The survey is an individual level panel survey, with data collected biannually, with 4 waves available, from 2008-2015. The survey is particularly rich, and in addition to economic measures of well-being, it includes individual level data on subjective well-being. Subjective well-being is measured by asking respondents to rate their level of life satisfaction, at the point of being interviewed, and to think about how their current level of life satisfaction relates to their level of satisfaction historically. Kahneman and Kreuger (2005) report that "while various measures of well-being are useful for some purposes, it is important to recognize that subjective well-being measures features of individuals' perceptions of their experiences, not their utility as economists typically conceive of it. Those perceptions are a more accurate gauge of actual feelings if they are reported closer to the time of, and in direct reference to, the actual experience." Therefore, studying subjective well-being is worth pursuing, as actual feelings are a relevant gauge of an individual's life satisfaction. These perceptions may be distorted – but are arguably the best measure of how an individual's experience of the world at a given point in time is translated into well-being.
    Date: 2016

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