nep-hap New Economics Papers
on Economics of Happiness
Issue of 2018‒01‒22
nine papers chosen by

  1. Is the Grass Always Greener on the Other Side of the fence? Composite Index of Well-Being Taking into Account the Local Relative Appreciations in Better Life Index By Greco, Salvatore; Ishizaka, Alessio; Resce, Giuliano; Torrisi, Gianpiero
  2. Welfare in Slovakia and the EU — an alternative to GDP per capita By Brocek, Frantisek; Lalinsky, Tibor
  3. Measuring well-being by a multidimensional spatial model in OECD Better Life Index framework By Greco, Salvatore; Ishizaka, Alessio; Resce, Giuliano; Torrisi, Gianpiero
  4. Education, Income and Happiness: Panel Evidence for the UK By FitzRoy, Felix; Nolan, Michael A.
  5. Unhappiness and Pain in Modern America: A Review Essay, and Further Evidence, on Carol Graham's Happiness for All? By Blanchflower, David G.; Oswald, Andrew J.
  6. Early-Life Correlates of Later-Life Well-Being: Evidence from the Wisconsin Longitudinal Study By Clark, Andrew E.; Lee, Tom
  7. Taking pleasure from neighbours’ misfortune: Comparison effects, social norms and the well-being of the unemployed By Howley, P.;; Knight, S.;
  8. The determinants of subjective wellbeing in a developing country: The Ecuadorian case By Nicola Pontarollo; Mercy Orellana Bravo; Joselin Segovia Sarmiento
  9. Working Paper 04-17 - Qu’est-ce qui compte pour les Belges ? Analyse des déterminants du bien-être individuel en Belgique By Arnaud Joskin

  1. By: Greco, Salvatore; Ishizaka, Alessio; Resce, Giuliano; Torrisi, Gianpiero
    Abstract: The multidimensional measures of well-being, such as the OECD Better Life Index (BLI), are receiving considerable attention. We introduce a composite index that, departing from the current practice, accounts for societal relative appreciation for the considered dimensions. We apply our methodology to the BLI using the data on preferences gathered from the OECD website. Our analysis signals pervasive differences in the country-level performances that cannot be compensated through differences in local preferences. Furthermore, individual preferences exacerbate multidimensional inequality between countries. Hence, we conjecture that better performing countries offer a policy mix better tailored to fit citizens’ preferences.
    Keywords: Well-Being; Better Life Index; Composite Index; Local Preferences; Stochastic Multi-Objective Acceptability Analysis
    JEL: C44 H11 I31
    Date: 2017–11
  2. By: Brocek, Frantisek; Lalinsky, Tibor
    Abstract: GDP per capita is used as the basic measure of economic development and prosperity across the world. However, it is a limited measure of living standards, focussed on capturing changes in economic output per person and neglecting many things central to quality of life. Several alternative approaches to assessing quality of life have been proposed such as the OECD Better Life Index (2017), the UN Human Development Index (HDI), or Gross National Happiness. One notable contribution is the consumption equivalent welfare measure introduced by Jones and Klenow (2016). Our results from using this measure suggest that the quality of life in most EU countries is higher than suggested by GDP per capita relative to the U.S. The primary reasons for this are that, particularly compared to the U.S., countries in the EU tend to have lower income inequality and longer life expectancy. Implementing this measure for Slovakia, our results indicate that relative welfare is approximately 10 percentage points higher in Slovakia than GDP per capita would suggest. In the medium run, consumption equivalent welfare in Slovakia grew faster than income from pre-crisis levels. Improvements in the quality of living in Slovakia over time have been driven by an increase in life expectancy and consumption, as well as consistently low levels of income inequality. Nevertheless, living standards in Slovakia are still low in comparison to advanced EU economies and the U.S. Lower life expectancy, which reflects the quality of health of the population, accounts for most of the difference in welfare in comparison to these advanced economies.
    Keywords: Welfare, Consumption, Inequality, Life Expectancy, Leisure, Slovakia, EU, Convergence
    JEL: I15 I31 O11 O52 O57
    Date: 2017–11–07
  3. By: Greco, Salvatore; Ishizaka, Alessio; Resce, Giuliano; Torrisi, Gianpiero
    Abstract: We propose a multidimensional spatial model to evaluate the well-being using the Better Life Index (BLI) in 36 countries according to a two-steps procedure. First, we position the countries as points in the Euclidean K-dimensional space in which each dimension is a specific aspect of well-being as measured in the BLI. Second, we consider each individual/voter’s opinions on the same dimensions to calculate the personal optimal point in that same K-dimensional space. Hence, we measure the distance between optimal point of well-being and the actual observed point at individual level. This distance is interpreted as the individuals’ loss in well-being. We show that this loss is negatively related (i) to the overall well-being in terms of BLI and (ii) the main indices of quality of democracy.
    Keywords: Better life Index, OECD, Well-being, Loss function
    JEL: H31 H41 I3 I38
    Date: 2017–12–29
  4. By: FitzRoy, Felix (University of St. Andrews); Nolan, Michael A. (University of Hull)
    Abstract: Using panel data from the BHPS and its Understanding Society extension, we study life satisfaction (LS) and income over nearly two decades, for samples split by education, and age – to our knowledge for the first time. The highly educated went from lowest to highest LS, though their average income was always higher. In spite of rapid income growth up to 2008/09, the less educated showed no rise in LS, while highly educated LS rose after the crash despite declining real income. In panel LS regressions with individual fixed effects, none of the income variables was significant for the highly educated.
    Keywords: education, income, economic growth, life satisfaction, Easterlin Paradox
    JEL: I31 O47
    Date: 2017–11
  5. By: Blanchflower, David G. (Dartmouth College); Oswald, Andrew J. (University of Warwick)
    Abstract: In Happiness for All?, Carol Graham raises disquieting ideas about today's United States. The challenge she puts forward is an important one. Here we review the intellectual case and offer additional evidence. We conclude broadly on the author's side. Strikingly, Americans appear to be in greater pain than citizens of other countries, and most sub-groups of citizens have downwardly trended happiness levels. There is, however, one bright side to an otherwise dark story. The happiness of black Americans has risen strongly since the 1970s. It is now almost equal to that of white Americans.
    Keywords: depression, mental-health, GHQ, well-being, happiness, life-course
    JEL: I3 I31
    Date: 2017–11
  6. By: Clark, Andrew E. (Paris School of Economics); Lee, Tom (Institute for Fiscal Studies, London)
    Abstract: We here use data from the Wisconsin Longitudinal Study (WLS) to provide one of the first analyses of the distal (early-life) and proximal (later-life) correlates of older-life subjective well-being. Unusually, we have two distinct measures of the latter: happiness and eudaimonia. Even after controlling for proximal covariates, outcomes at age 18 (IQ score, parental income and parental education) remain good predictors of well-being over 50 years later. In terms of the proximal covariates, mental health and social participation are the strongest predictors of both measures of well-being in older age. However, there are notable differences in the other correlates of happiness and eudaimonia. As such, well-being policy will depend to an extent on which measure is preferred.
    Keywords: health, eudaimonia, well-being, life-course, happiness
    JEL: I31 I38
    Date: 2017–11
  7. By: Howley, P.;; Knight, S.;
    Abstract: The role of relative rank, or interdependent preferences, in explaining individual well-being is a rapidly emerging research area for economists. A typically overlooked issue in this literature is the extent of individual heterogeneity in the degree to which individuals are susceptible to comparison effects. In keeping with the idea that comparison effects are important in the labour market, we find that the well-being of the unemployed is positively correlated with the unemployment of others (neighbourhood unemployment rates), whereas the opposite is true for the population as a whole. The main novelty of this study is that we document significant individual heterogeneity in these effects. Specifically, unemployed males and those with relatively strong social ties in their neighbourhood appear to be much more likely to derive well-being benefits from the unemployment of others. We further show that there are significant differences according to personality traits. We suggest that neglecting to consider individual heterogeneity and focusing on ‘average’ effects as is the norm in the literature to date will invariably lead to an incomplete, and perhaps superficial, understanding of the role of comparison effects for individual well-being.
    Keywords: comparison effects; unemployment; subjective well-being;
    JEL: I31
    Date: 2018–01
  8. By: Nicola Pontarollo (European Commission – JRC); Mercy Orellana Bravo (GIER, Universidad de Cuenca); Joselin Segovia Sarmiento (GIER, Universidad de Cuenca)
    Abstract: Ecuador is a country characterized by deep social and territorial inequalities. In order to overcome this issue the national government setup in 2008 the National Plan of Wellbeing, a master plan whose objective is to put at the centre of the political action the wellbeing of the human being. This study aims to analyze the individual and contextual determinants of subjective wellbeing in Ecuador by examining a set of variables linked to the specific social and territorial characteristics of the country and to its main policy priorities. The assessment is based on econometric techniques able to account for the nested structure of the data, namely ordinary least squares and ordered logit with clustered standard errors and multilevel ordered logit. The results are robust and show that institutional trust, income, good housing conditions and education fosters wellbeing. On the other hand, being a woman, belonging to an ethnic minority or living in an oil dependent area is negatively correlated to subjective wellbeing. The policy implications range from an improvement of the institutional framework and redistributive system to better inclusion policies.
    Keywords: individual wellbeing, Ecuador, multilevel model, clustered standard errors.
    JEL: I3 P16 C30
    Date: 2017–12
  9. By: Arnaud Joskin
    Abstract: This Working Paper analyses the determinants of individual well-being in Belgium, using data from the EU-SILC survey. The analysis shows that on average health, both mental and physical, is the key determinant of well-being for Belgians. Enjoying sufficient income to access what is regarded as the prevailing standard of living in Belgium, having a job and being surrounded by loved ones also have a significant and positive impact on well-being. Besides these results for “average” Belgians, the analysis of different sub-groups highlights that these determinants are not of equal importance to all Belgians. These results contribute to the FPB's work on the search for indicators complementary to GDP.
    Keywords: Belgium, Well-being, Life satisfaction, Health, Sustainable development, Indicators, SILC
    JEL: A13 I3 P52
    Date: 2017–06–02

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