nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒11‒20
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Subjective Well-Being, Peer Comparisons and Optimal Income Taxation By David Ulph; Sean Slack
  2. Origins and implications of family structure across Italian provinces in historical perspective By Pierluigi Conzo; Arnstein Aassve; Giulia Fuochi; Letizia Mencarini
  3. Inequality of Living Standards and Isoelastic Equivalence Scales By Udo EBERT; Patrick MOYES
  4. 'Cast your bread upon the waters, for you will find it after many days.' A BHPS study of the interaction between giving and welfare By Lorna Zischka; Mark Casson; Marina Della Giusta
  5. Women’s satisfaction during pregnancy and at delivery in Tuscany (Italy) By Gustavo De Santis; Valentina Tocchioni; Chiara Seghieri; Sabina Nuti

  1. By: David Ulph (University of St Andrews); Sean Slack (University of St. Andrews)
    Abstract: Empirical evidence suggests that an important determinant of subjective well-being is how an individual’s consumption compares with that of their immediate peers. We introduce peer comparisons into the standard optimal tax framework and demonstrate that the optimal linear tax expression is adjusted in three key ways, the latter two of which are novel to this paper and act to lower the tax rate. First, the dependence of well-being on peer income introduces an externality that distorts labour supply above that which individuals would choose were they to recognise the interplay between their own choices and the Nash equilibrium level of peer consumption. The optimal tax rate is adjusted upwards to (partially) correct this distortion. Second, if individual labour supply is a function of peer consumption, there are ‘Keeping up with the Joneses’ multiplier effects that raise the Nash compensated labour supply elasticity above the individual labour supply elasticity. This implies a lower tax rate on efficiency grounds. Third, Nash indirect well-being is decreasing in the wage rate for workers with wages close to the reservation wage. To the extent that this lowers the covariance between gross earnings and the net social marginal value of income, this will act to lower the optimal tax rate.
    Keywords: Optimal Taxation; Realtive consumption; Subjective Well-Being
    JEL: D63 H21 I31
    Date: 2016–08–15
  2. By: Pierluigi Conzo; Arnstein Aassve; Giulia Fuochi; Letizia Mencarini
    Abstract: The paper provides a framework of how culture affects citizens' subjective well-being. According to self-determination theory, well-being is driven by the satisfaction of three basic psychological needs: autonomy, relatedness and competence. We assess if and to what extent generalized trust and the values of obedience and respect influence the EuropeansÕ satisfaction of these needs, controlling for income and education. We find positive impact of generalized morality (i.e. high trust and respect, low obedience). Results are robust to different checks for endogeneity, including instrumental variable regressions at country, regional and individual level as well as to panel-data estimations.
    Keywords: self-determination, culture, trust, subjective well-being, happiness, life satisfaction
    Date: 2016–11
  3. By: Udo EBERT; Patrick MOYES
    Abstract: Comparisons of well-being across heterogenous households necessitate that households\' incomes are adjusted for differences in size and composition: equivalence scales arecommonly used to achieve this objective.Equivalence scales with constant elasticity with respect to family size have been argued to provide a good approximation to a large variety of scales (see, e.g., B. Buhmann, L. Rainwater, G. Schmaus, and T.M. Smeeding, Review of Income and Wealth (1988), 115--142) and they therefore play a prominent role in empirical work. Focusing on inequality of well-being, we first show that, if one requires that the index of inequality is -- in addition to standard properties – invariant to modifications of the relative (marginal) distributions of needs and income across households, then the equivalence scales must be isoelastic. In addition, if all households\' members have the same preferences and if households maximise the sum of their members\' utilities, then the only preferences consistent with isoelastic scales are of the Cobb-Douglas type.
    Keywords: Inequality of well-being, Household size, Equivalence scales, Constant elasticity, Cobb-Douglas preferences.
    JEL: D31 D63
    Date: 2016
  4. By: Lorna Zischka (Department of Economics, University of Reading); Mark Casson (Department of Economics, University of Reading); Marina Della Giusta (Department of Economics, University of Reading)
    Abstract: This paper analyses the interaction between individual giving and individual welfare. ‘Giving’ includes volunteering, engagement in community groups and hospitality. ‘Welfare’ includes life-satisfaction, trust, liking for one’s neighbourhood and crime fears. From British longitudinal data, time lags were used to establish the direction of causality. A two-way process was identified: people who were part of giving networks in the first 5 years of the study became better off by the end of 10 years, but also being better off made it more likely that people increased their giving over time. The existence of lags in both equations makes the system dynamic, suggesting that a favourable social environment cues prosocial behaviours, and these prosocial behaviours then go on to maintain and improve the social environment. The existence of giving behaviours indicates the prosocial nature of civic sector interactions, and these contribute to welfare through the cycle of response and counter-response.
    Date: 2016–11–05
  5. By: Gustavo De Santis (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valentina Tocchioni (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Chiara Seghieri (Laboratorio Management e Sanità , Istituto di Management, Scuola Superiore Sant’Anna, Pisa); Sabina Nuti (Laboratorio Management e Sanità , Istituto di Management, Scuola Superiore Sant’Anna, Pisa)
    Abstract: The Tuscany region constitutes an excellence at the national level for the quality of its health services. Following the WHO guidelines on the prenatal and childcare services, it has an integrated path targeted at pregnant women, called "birth path", to take care of all clinical and non-clinical aspects of pregnancy, childbirth and postpartum. New mothers’ evaluation of the birth path was the object of a specific survey, conducted in Tuscany in 2012-2013, which is analyzed in detail in this paper. Focusing on the association of women’s socio-demographic characteristics and overall satisfaction of the care path using multilevel modelling, the main conclusion is that, while the average was high, significant differences in satisfaction levels emerge between women from different socio-demographic groups. Women’s satisfaction at childbirth is generally considered an important indicator of the quality of maternity services, with implications on the health and well-being of the mother and the child. However, the effect of women’s characteristics on satisfaction is under-investigated, especially in Italy: our research aims at filling this gap.
    Keywords: Tuscany, Italy, childbirth, pregnancy, satisfaction evaluation, birth experience, multilevel models, health system strategies
    JEL: I14 C25 C13 N34
    Date: 2016–11

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