nep-hap New Economics Papers
on Economics of Happiness
Issue of 2019‒01‒07
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Election Outcomes and Individual Well-being: Evidence from British Panel Data By Daniel Gray; Harry Pickard; Luke Munford
  2. Consumption smoothing and the welfare cost of uncertainty By Alem, Yonas; Colmer, Jonathan
  3. The effect of compulsory service on life satisfaction and its channels By Collischon, Matthias; Eberl, Andreas; Jahn, Kerstin

  1. By: Daniel Gray (Department of Economics, University of Sheffield, UK); Harry Pickard (Department of Economics, University of Sheffield, UK); Luke Munford (School of Health Sciences, University of Manchester, UK)
    Abstract: Given the recent seismic changes in the political landscape across Europe and in the US, it is important to understand how voting behaviour and election results in influence an individual's subjective well-being. Exploiting novel longitudinal data on individuals in the UK matched to their parliamentary constituency, we find that supporting the incumbent political party exerts a positive influence on individual well-being. This relationship is different across overall life satisfaction and psychological well-being, gender and personal characteristics. Potential endogeneity concerns are addressed in two ways; we employ an instrumental variable approach and a regression discontinuity in time design to estimate the impact of a quasi-natural experiment. The results relating to the instrumental variable approach support the positive relationship between national and constituency incumbency support and well-being. In the regression discontinuity in time design, we identify a causal relationship by exploiting the timing of survey questions around the 2010 election date. We find that Liberal Democrat supporters have approximately one-unit higher level of overall life satisfaction after their party's surprise electoral success.
    Keywords: Election Results; Subjective Well-being; United Kingdom; Voting Behaviour
    JEL: D0 D1 D6 H1
    Date: 2018–12
  2. By: Alem, Yonas; Colmer, Jonathan
    Abstract: Separating the effects of uncertainty from realised events, and identifying the welfare effects of uncertainty, present a number of empirical challenges. Combining individuallevel panel data from rural Ethiopia with high-resolution meteorological data, we introduce a new proxy for income uncertainty - mean-preserving rainfall variability - and estimate that an increase in income uncertainty is associated with reductions in objective consumption and subjective well-being (SWB). Furthermore, 86% of the effect on SWB is attributed to the direct effects of uncertainty, consistent with a model of optimal expectations (Brunnermeier and Parker, 2005). In addition, we find that farmers in more uncertain environments are more resilient to realised rainfall shocks, consistent with a trade-off between optimism about the future and risk-management investments today. These findings suggest that the gains from further consumption smoothing are likely greater than estimates based solely on realised consumption fluctuations.
    Keywords: income uncertainty,consumption smoothing,subjective well-being,rainfall variability
    JEL: O13 Q12 Q56
    Date: 2018
  3. By: Collischon, Matthias; Eberl, Andreas; Jahn, Kerstin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Compulsory military service is still a prominent feature of young people's careers in many countries. We use the abolition of compulsory military and civil service for males in 2011 in Germany as a natural experiment to identify effects of institutionalized career disruptions on life satisfaction. Drawing on data from the SOEP, we apply a difference-in-differences design (comparing young males and females) to assess the causal effect of this reform on individual life satisfaction. Our results show a significant and robust positive effect of the abolition of compulsory service on young males' life satisfaction. Furthermore, we provide empirical evidence that reductions in career disruptions, forgone earnings, uncertainty regarding the future, and forced labor contribute to this effect." (Author's abstract, IAB-Doku) ((en))
    JEL: I31 I38 J18
    Date: 2018–12–17

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