nep-hap New Economics Papers
on Economics of Happiness
Issue of 2018‒04‒02
eight papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Unfairness at Work: Well-Being and Quits By D'Ambrosio, Conchita; Clark, Andrew E.; Barazzetta, Marta
  2. Adult life satisfaction largely (though not wholly) contemporaneous By Alan Piper
  3. Residential Satisfaction for a Continuum of Households: Evidence from European Countries By Riccardo, Borgoni; Alessandra, Michelangeli; Federica, Pirola;
  4. What do Self-Reports of Wellbeing Say about Life-Cycle Theory and Policy? By Angus Deaton
  5. The tax tectonics: Well-being and wealth inequality in relation to a shift in the tax mix from direct to indirect taxes By Wijtvliet, Laurens
  6. Working Hours, Work Identity and Subjective Wellbeing By Mark L. Bryan; Alita Nandi
  7. Testing Happiness Hypothesis among the Elderly By Cid, Alejandro; Ferrés, Daniel; Rossi, Máximo
  8. Removing the Stigma of Divorce: Happiness before and after Remarriage By Sucheon Lee

  1. By: D'Ambrosio, Conchita (University of Luxembourg); Clark, Andrew E. (Paris School of Economics); Barazzetta, Marta (University of Luxembourg)
    Abstract: We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective future job quitting. In six waves of German Socio-Economic Panel data, the extent to which own labour income is perceived to be unfair is significantly negatively correlated with subjective well-being, both in terms of cognitive evaluations (life and job satisfaction) and affect (the frequency of feeling happy, sad and angry). Perceived unfairness also translates into objective labour-market behaviour, with current unfair income predicting future job quits.
    Keywords: fair income, subjective well-being, quits, SOEP
    JEL: D63 J28 J31
    Date: 2018–02
  2. By: Alan Piper (Europa-Universität Flensburg, Internationales Institut für Management, Abteilung Internationale und Institutionelle Ökonomik)
    Date: 2018
  3. By: Riccardo, Borgoni; Alessandra, Michelangeli; Federica, Pirola;
    Abstract: Residential satisfaction depends on housing and neighborhood conditions in addition to housing cost affordability. To determine the relative importance of these factors, their average effect is usually estimated using sample data, eventually split in sub-samples in order to represent social classes. A concern about the division of households into groups is that, as groups are modified or group assignment change, results of quantitative analysis applied to such data can dramatically change. This paper follows a subjective well-being approach to study residential satisfaction. We propose a novel empirical strategy independent of the concept of social class, to estimate how the effect of drivers of residential satisfaction change on continuous according to households' income. We apply our methodology to investigate residential satisfaction in 23 European countries using 2012 EU-SILC module on housing conditions. Our results show that: (i) in Europe residential satisfaction is driven first by housing-specific characteristics, followed by neighborhood conditions and individual/household characteristics; (ii) the probability to be satisfied or very satisfied strongly differs across countries, anything else being equal; (iii) residents with different monetary resources attach importance to particular determinants of residential satisfaction.
    Keywords: housing, subjective well-being, Europe, EU-SILC Survey
    JEL: R11 R21
    Date: 2018–03–27
  4. By: Angus Deaton
    Abstract: I respond to Atkinson's plea to revive welfare economics, and to considering alternative ethical frameworks when making policy recommendations. I examine a measure of self-reported evaluative wellbeing, the Cantril Ladder, and use data from Gallup to examine wellbeing over the life-cycle. I assess the validity of the measure, and show that it is hard to reconcile with familiar theories of intertemporal choice. I find a worldwide optimism about the future; in spite of repeated evidence to the contrary, people consistently but irrationally predict they will be better off five years from now. The gap between future and current wellbeing diminishes with age, and in rich countries, is negative among the elderly. I also use the measure to think about income transfers by age and sex. Policies that give priority those with low incomes favor the young and the old, while utilitarian policies favor the middle aged, and men over women.
    JEL: E21 H2 H31 H55 I3
    Date: 2018–03
  5. By: Wijtvliet, Laurens (Tilburg University, School of Economics and Management)
    Abstract: Indirect taxes are on the rise – both in terms of geographical spread and fiscal importance – at the expense of the proportion of direct taxes. This shift from direct to indirect taxes (tax shift) is primarily driven by a desire to boost economic growth (GDP) and job creation. At the same time, scholars and supranational bodies are increasingly arguing that economic policy should not solely be directed at economic growth, but at more-encompassing, multidimensional well-being. This study confronts both bodies of thought. It examines how the tax shift can be consonant with the general goal of promoting well-being that is paramount in many countries. It does so by assessing the tax shift’s impact on the distribution of wealth and identifying various well-being-related tendencies that this changing distribution could potentially entail.
    Date: 2018
  6. By: Mark L. Bryan (Department of Economics, University of Sheffield); Alita Nandi (Institute for Social and Economic Research, University of Essex)
    Abstract: Following theories of social and economic identity, we use representative data containing measures of personal identity to investigate the interplay of work identity and hours of work in determining subjective wellbeing (job satisfaction, job-related anxiety and depression, and life satisfaction). We find that work identity helps to explain wellbeing in two ways. First, for a given level of hours, having a stronger work identity is associated with higher wellbeing on most measures. Second, a strong work identity reduces the adverse effects of long hours working on some measures, notably job satisfaction and anxiety (for women) and on life satisfaction (for men). The associations of working hours and wellbeing confirm that work is a source of disutility, but these relationships are generally strengthened when controlling for identity – implying that individuals sort into jobs with work hours that match their identities. The effects of both work hours and identity are substantial relative to benchmark effects of health on wellbeing. Our work helps to rationalise recent findings in the literature on the effects of work hours and work hour preferences on wellbeing.
    Keywords: identity, wellbeing, working hours, job satisfaction, anxiety, depression
    JEL: J22 J28 J29 I31
    Date: 2018–02
  7. By: Cid, Alejandro; Ferrés, Daniel; Rossi, Máximo
    Abstract: A growing strand of economic literature focuses its attention on the relationship between happiness levels and various individual and socioeconomic variables. Recent studies analyze the impact of income, marital status, health and educational levels and other socioeconomic variables on satisfaction with life. A large majority of these studies limit their attention to industrialized countries. In our work, we analyze data for a group of individuals living in a Latin American country (Uruguay) with age 60 or older. We use a rich data set that allows us to test different happiness hypothesis employing four methodological approaches. We find that older people in Uruguay have a tendency to report themselves happy when they are married, they have higher standards of health and when they earn higher levels of income. On the contrary, they report lower levels of happiness when they live alone and when their nutrition is insufficient. We also find that education has no clear impact on happiness. We think that our study is an initial contribution to the study of those factors that can explain happiness among the elderly in Latin American countries. Future work will focus on enhanced empirical analysis and in extending our study to other countries.
    Keywords: Happiness; Health; Family; Censored Econometric Models; Semiparametric Methods; Treatment Evaluation
    JEL: C14 C24 I10 J12
    Date: 2018–12–11
  8. By: Sucheon Lee
    Abstract: Many studies confirm that marriage does not have lasting effects on levels of happiness, whereas divorce induces serious, scarring effects through social stigma. However, few academic efforts have been made regarding how remarriage after divorce impacts the subjective well-being (SWB) of the divorced. Taking into consideration that remarriage often entails regaining social acceptance, this paper examines the possibly different patterns of happiness depending on marital order. Specifically, this longitudinal study uses the German Socio-Economic Panel (SOEP) data set in order to compare SWB trajectories around first and subsequent marriages. The results show that the remarried go through a significantly greater boost in happiness than the first-married during the transition phase. Moreover, while life satisfaction that increased in the years around the first marriage quickly returns to the initial baseline, remarriage generates a lasting increase. This paper provides a complementary perspective to existing researches on divorce and debates over the hedonic treadmill theory.
    Keywords: Remarriage, Subjective well-being, Life course, Social stigma
    Date: 2018

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