nep-hap New Economics Papers
on Economics of Happiness
Issue of 2017‒09‒17
seven papers chosen by

  1. (Mis-)Predicted Subjective Well-Being Following Life Events By Reto Odermatt; Alois Stutzer
  2. Economic Inequality and Happiness: A quantitative study among the elderly in Rural Vietnam By Quang Tran, Tuyen; Viet Nguyen, Cuong; Van Vu, Huong
  3. Do the altruists lie less? By Rudolf Kerschbamer; Daniel Neururer; Alexander Gruber
  4. Satisfaction and Self-Employment: Do Women Benefit More from Being Their Own Boss? By Karen Maguire; John V. Winters
  5. Market Reactions to ECB Policy Innovations: A Cross-Country Analysis By Fausto Pacicco; Luigi Vena; Andrea Venegoni
  6. Diverging destinies in international perspective: Education, single motherhood, and child poverty By Juho Härkönen
  7. Equality of Opportunity for Well-Being By Daniel Gerszon Mahler; Xavier Ramos

  1. By: Reto Odermatt; Alois Stutzer
    Abstract: The correct prediction of how alternative states of the world affect our lives is a cornerstone of economics. We study how accurate people are in predicting their future well-being after facing major life events. Based on individual panel data, we compare people's life satisfaction forecasts reported in the first interview after a major life event with their actual evaluations five years later on. This is done after the individuals experience widowhood, unemployment, disability, marriage, separation or divorce. We find systematic prediction errors that seem at least partly driven by unforeseen adaptation after the first four of these events.
    Keywords: Adaptation; life satisfaction; life events; projection-bias; subjective well-being; utility prediction; unemployement
    JEL: D03 D12 D60 I31
    Date: 2017–09
  2. By: Quang Tran, Tuyen; Viet Nguyen, Cuong; Van Vu, Huong
    Abstract: By combining data from the 2011 Vietnam National Aging Survey and the 2011 Rural, Agricultural and Fishery Census, we examined whether expenditure inequality has any effect on happiness or life satisfaction among the elderly in rural Vietnam. We find that individuals who live in the communes with high inequality tend to self-report as being less happy, even after controlling for various individual and household attributes. The results are robust to the choice of inequality measures and the specification of econometric models. We also find that older rural people who are farmers or poor are more sensitive to inequality. Given that these people tend to be less happy than others, the result shows the risk that inequality further lowers their subjective well-being. The result supports the view that rural Vietnam is a less mobile society.
    Keywords: Elderly, Expenditure inequality, Social mobility, Subjective well-being, Rural Vietnam
    JEL: I3 I31 I32 I38
    Date: 2015–09–18
  3. By: Rudolf Kerschbamer; Daniel Neururer; Alexander Gruber
    Abstract: Much is known about heterogeneity in social preferences and about heterogeneity in lying aversion - but little is known about the relation between the two at the individual level. Are the altruists simply upright persons who do not only care about the well-being of others but also about honesty? And are the selfish those who lie whenever lying maximizes their material payoff? This paper addresses those questions in experiments that first elicit subject's social preferences and then let them make decisions in an environment where lying increases the own material payoff and has either consequences for the payoffs of others or no consequences for others. We find that altruists lie less when lying hurts another party but we do not find any evidence in support of the hypothesis that altruists are more (or less) averse to lying than others in environments where lying has no effects on the payoffs of others.
    Keywords: deception, lies, social preferences, distributional preferences, equality equivalence test
    JEL: C91 D63 D64
    Date: 2017–09–04
  4. By: Karen Maguire (Oklahoma State University); John V. Winters (Oklahoma State University)
    Abstract: This paper uses individual self-reported life satisfaction data to analyze the relationship between self-employment and subjective well-being by gender and race. We document substantial heterogeneity, with women appearing to benefit the most from self-employment. Self-employed women have significantly higher rates of being very satisfied relative to both traditionally employed women and self-employed men. We also find that the self-employed have higher rates of dissatisfaction, and this adverse relationship with self-employment is most pronounced for minorities. These nuanced findings broaden our understanding of the relationship between self-employment and subjective well-being and have important implications for both researchers and policymakers.
    Keywords: Well-being, Entrepreneurship, Self-Employment, Gender, Race
    JEL: I10 I31 J2
    Date: 2017–08
  5. By: Fausto Pacicco; Luigi Vena; Andrea Venegoni
    Abstract: The literature on the evaluation of how the well-being is measured is full of different contributions, ranging from the subjective measure, to the batch of indicators approach, to the provision of synthetic objective indexes. However, up to date, there is still a lack of such measures on micro-territorial level, i.e. on town-by-town basis. This paper, thanks to the statistic platform 100% Lombardia, aims to develop such indexes, named WIT (Well-being Index for Towns), using a cluster analysis, a Bayesian dynamic factor model and a Panel-FAVARX.
    Date: 2017–07
  6. By: Juho Härkönen
    Abstract: Educational differences in family demography have gained wide attention, not least due to arguments that they amplify existing inequalities in child well-being and life chances. Despite the interest, there has been a lack of comprehensive cross-national descriptions of trends in educational differences in family demography, and just a few quantifications of their importance to social inequality. In this study, I used data from the Luxembourg Income Study (LIS) to describe trends in educational differences in single motherhood in 33 North American, European, and Asian countries, and to analyze whether these differences amplify differences in child poverty by maternal education. The prevalence of single motherhood has increased in almost all of the 33 countries. In many, educational differences in single motherhood have widened and single motherhood has increased particularly among the least educated. Educational differences in single motherhood can amplify differences in child poverty by maternal education, but only when both the educational gradient of single motherhood and the child poverty gap by single motherhood are large enough. These findings show that educational divergence in family demography is not limited to the United States, but that it is not a universal trend. Moreover, the study highlights the contingency of the inequality effects of these patterns and concludes that these effects can be countered by reducing the socioeconomic penalty of single motherhood.
    Keywords: education, single mothers, children, poverty
    Date: 2017–08
  7. By: Daniel Gerszon Mahler; Xavier Ramos
    Abstract: A growing literature has tried to measure the extent to which individuals have equal opportunities to acquire income. At the same time, policy makers have doubled down on efforts to go beyond income when measuring well-being. We attempt to bridge these two areas by measuring the extent to which individuals have equal opportunities to achieve a high level of well-being. We use the German Socio-Economic Panel to measure well-being in four different ways including incomes. This makes it possible to determine if the way well-being is measured matters for identifying who the opportunity-deprived are and for tracking inequality of opportunity over time. We find that, regardless of how well-being is measured, the same people are opportunity-deprived and equality of opportunity has improved over the past 20 years. This suggests that going beyond income has little relevance if the objective is to provide equal opportunities.
    Keywords: Equality of opportunity, measurement, responsibility, effort, well-being
    JEL: D3 D63 I31
    Date: 2017

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