nep-hap New Economics Papers
on Economics of Happiness
Issue of 2017‒08‒13
nine papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. How political systems and social welfare policies affect well-being: A literature review By Robert MacCulloch
  2. Human Needs and the Measurement of Welfare By Fellner, Wolfgang; Goehmann, Benedikt
  3. Urbanization and its Effects on the Happiness Domains By Cristina Bernini; Alessandro Tampieri
  4. Valuing Pain using the Subjective Well-being Method By Thorhildur Ólafsdóttir; Tinna Laufey Ásgeirsdóttir; Edward C. Norton
  5. Does Commuting Matter to Subjective Well-Being? By Olga Lorenz
  6. Valuation of Public Amenities and Differences in Quality of Life among Latin American Cities By Arrosa, María Laura; Gandelman, Néstor
  7. 'Fair' Welfare Comparisons with Heterogeneous Tastes: Subjective versus Revealed Preferences By Akay, Alpaslan; Bargain, Olivier; Jara, Xavier
  8. Back to Bentham, Should We? Large-Scale Comparison of Experienced versus Decision Utility By Akay, Alpaslan; Bargain, Olivier; Jara, Xavier
  9. The Dynamic effects of Time, Health and of Well-being on the Pollution after the earth summit of Johunburg By FAKHRI, ISSAOUI; HASSEN, TOUMI; WASSIM, TOUILI; BILEL, AMMOURI

  1. By: Robert MacCulloch (University of Auckland)
    Abstract: This chapter focusses on the question of how formal institutions, like those governing the level of freedom, the regulatory state, political parties and the generosity of the welfare state, affect self-reported well-being. The evidence suggests, for example, that more freedom, as well as government structures which encourage civic engagement, participation and trust, have positive effects. Many studies, however, use cross-sectional data with small sample sizes, often due to institutions being measured at the country level with limited variation over time. As a consequence, further work is needed to test robustness. Stronger results hold with respect to particular types of welfare state institutions, like unemployment benefits, which are subject to quite frequent changes within nations. Increases in unemployment benefits are associated with higher levels of well-being for all workers, probably due to greater income security. However, doubt still persists as to their overall impact, due to the extent to which well-being is adversely affected by the higher taxes needed to support a more generous welfare state.
    Keywords: Wellbeing, government structures, welfare state, unemployment benefits
    Date: 2017–08
  2. By: Fellner, Wolfgang; Goehmann, Benedikt
    Abstract: Adam Smith considered consumption the sole end and purpose of all production. Concerning the measurement of welfare, this requires a sound understanding of the connection between consumption and welfare. The consumerist conceptualization of this connection implies that the amount of consumption equals welfare and the level of production can be an indicator for welfare. The limits and problems of production measures are widely accepted. Yet, indicators like GDP remain the focus of mainstream economic theory and policy. We trace the origin of this lock-in back to the economic model of behaviour and the concept of agency in mainstream economics. The suggested alternative stems from literature about human needs in heterodox economics and psychology. This literature incorporates the relevance of social aspects and cultural change for welfare. It turns out that consumerism can be a threat to well-being and welfare rather than a requirement for it.
    Keywords: economic psychology, capabilities approach; self-determination theory; consumerism; structure vs. agency
    Date: 2017–08
  3. By: Cristina Bernini (University of Bologna); Alessandro Tampieri (University of Bologna and CREA, Université du Luxembourg)
    Abstract: We analyze the effects of urbanization on the specific components of the happiness function. We exploit the dataset HADL on Italian citizens over the period 2010-2013. A multilevel approach is used to take into account of regional heterogeneity in the happiness’s determinants. We find that, in line with much of the literature, urbanization is negatively related to subjective well-being. However, the impact of urbanization changes depending on the specific happiness spheres: while satisfaction with economic conditions is not affected by urbanization, job and family satisfaction increase with urbanization. Conversely, satisfaction with health, friendship, spare time and environment decrease with urbanization.
    Keywords: subjective well-being, happiness function, urbanization, regions, multilevel models
    JEL: I31 R10
    Date: 2017
  4. By: Thorhildur Ólafsdóttir; Tinna Laufey Ásgeirsdóttir; Edward C. Norton
    Abstract: Chronic pain clearly lowers utility, but it is empirically challenging to estimate the monetary compensation needed to offset this utility reduction. We use the subjective well-being method to estimate the value of pain relief among individuals age 50 and older. We use a sample of 64,205 observations from 4 waves (2008-2014) of the Health and Retirement Study, a nationally representative individual-level survey data, permitting us to control for individual heterogeneity. Our models, which allow for nonlinear effects in income, show the value of avoiding pain ranging between 56 to 145 USD per day. These results are lower than previously reported, suggesting that the value of pain relief varies by income levels. Thus, previous estimates of the value of pain relief assuming constant monetary compensation for pain across income levels are heavily affected by the highest income level. Furthermore, we find that the value of pain relief increases with pain severity.
    JEL: I10 I14
    Date: 2017–08
  5. By: Olga Lorenz (Institute for Labour Law and Industrial Relations in the European Union)
    Abstract: How and why commuting contributes to our well-being is of considerableimportance for transportation policy and planning. This paper analyses the relation between commuting and subjective well-being by considering several cognitive (e.g. satisfaction with family life, leisure, income, work, health) and affective (e.g., happiness, anger, worry, sadness) componentsof subjective well-being. Fixed-effects models are estimated with German Socio-Economic Panel data for the period 2007 – 2013. In contrast to previous papers in the literature, according to which commuting is bad for overall life satisfaction, we find no evidence that commuting in general is associated with a lower life satisfaction. Rather, it appears that longer commutes are only related to lower satisfaction with particular life domains, especially family life and leisure time. Time spent on housework, child care as well as physical and leisure activities mediate the association between commuting and well-being.
    Keywords: commuting distance, emotion, satisfaction, time use, well-being
    JEL: I10 I31 R40
    Date: 2017–07
  6. By: Arrosa, María Laura; Gandelman, Néstor
    Abstract: We use a life satisfaction approach for the valuation of public goods and amenities in Latin American cities. We apply a homogenous database of seventeen cities gathered by the Development Bank of Latin America CAF. Using the estimated monetary value for several public goods and neighborhood amenities we construct a city level quality of life index. We find that access to electricity, access to running water and security are the three largest valued urban characteristics in terms of life satisfaction and housing satisfaction. The monetary equivalent valuations represent more than duplicating the household per capita income. Lacking access to them has a tremendous impact on quality of life. We also show that although richer households have more access, public good and amenities are a source for reductions in quality of life disparities.
    Keywords: Ciudades, Investigación socioeconómica, Servicios públicos,
    Date: 2016
  7. By: Akay, Alpaslan (University of Gothenburg); Bargain, Olivier (Aix-Marseille University); Jara, Xavier (KU Leuven)
    Abstract: Multidimensional welfare analysis has recently been revived by money-metric measures based on explicit fairness principles and the respect of individual preferences. To operationalize this approach, preference heterogeneity can be inferred from the observation of individual choices (revealed preferences) or from self-declared satisfaction following these choices (subjective well-being). We question whether using one or the other method makes a difference for welfare analysis based on income-leisure preferences. We estimate ordinal preferences that are either consistent with actual labor supply decisions or with income- leisure satisfaction. For different ethical priors regarding work preferences, we compare the welfare rankings obtained with both methods. The correlation in welfare ranks is high in general and very high for the 60% of the population whose actual choices coincide with subjective well-being maximization. For the rest, most of the discrepancies seem to be explained by labor market constraints among the low skilled and underemployment among low-educated single mothers. Importantly from a Rawlsian perspective, the identification of the worst o¤ depends on ethical views regarding responsibility for work preferences and the extent to which actual choices are constrained on the labor market.
    Keywords: fair allocation, money metric, decision utility, experienced utility, labor supply, subjective well-being
    JEL: C35 C90 D60 D63 D71 H24 H31 J22
    Date: 2017–07
  8. By: Akay, Alpaslan (University of Gothenburg); Bargain, Olivier (Aix-Marseille University); Jara, Xavier (KU Leuven)
    Abstract: Subjective well-being (SWB) data is increasingly used to perform welfare analyses. Interpreted as 'experienced utility', SWB has recently been compared to 'decision utility' using specific experiments, most often based on stated preferences. Results point to an overall congruence between these two types of welfare measures. We question whether these findings hold in the more general framework of non-experimental and large-scale data, i.e. the setting commonly used for policy analysis. For individuals in the British household panel, we compare the ordinal preferences either "revealed" from their labor supply decisions or elicited from their reported SWB. The results show striking similarities on average, reflecting the fact that a majority of individuals made decisions that are consistent with SWB maximization. Differences between the two welfare measures arise for particular subgroups, lending themselves to intuitive explanations that we illustrate for specific factors (health and labor market constraints, 'focusing illusion', aspirations).
    Keywords: decision utility, experienced utility, labor supply, subjective well-being
    JEL: C90 I31 J22
    Date: 2017–07
    Abstract: In This paper we try to investigate the impact of CO2 emissions on a set of socioeconomic variables (GDP, health expectancy, life expectancy, urbanization, time, and a composite variable showing the effects post the earth summit of johansburg) in eight countries covering all world economic groups (Tunisia, Saudi Arabia, France, Norway, Bresil, USA, China and Australia). The empirical results have showed that the GDP continue to be the principal variable which is inciting to the CO2 emission. Also we have demonstrated that it exists actually a voluntary act at the world scale to substitute pollutant energy sources by other sources more clean and pure.
    Keywords: Environmental Kuznets Curve, CO2, energy consumption, growth
    JEL: I1 I15 I3 I31
    Date: 2016–02–08

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