nep-hap New Economics Papers
on Economics of Happiness
Issue of 2019‒02‒18
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Population structure and the human development index By Carmen Herrero; Ricardo Martínez; Antonio Villar
  2. Toward a Framework for Time Use, Welfare, and Household Centric Economic Measurement By Coyle, Diane; Nakamura, Leonard I.
  3. Workfare, wellbeing and consumption: Evidence from a field experiment with Kenya's urban poor. By Syon Bhanot; Jiyoung Han; Chaning Jang

  1. By: Carmen Herrero (Departamento de Fundamentos del Análisis Económico. Universidad de Alicante.); Ricardo Martínez (Department of Economic Theory and Economic History, University of Granada.); Antonio Villar (Department of Economics, Universidad Pablo de Olvide.)
    Abstract: This paper provides an alternative way of measuring human development that takes explicitly into account the differences in the countries’ population structures. The interest of this proposal stems from two complementary elements. First, that there is an enormous diversity in the population structures of those countries analysed in the Human Development Reports, particularly the shares of old people in the population. Second, that demographic characteristics are relevant in the evaluation of development possibilities. We propose to change the way of measuring health, education and material wellbeing, in order to take into account those differences in the population structures. Regarding the health component, we substitute Life Expectancy at Birth by Life Potential (the average life expectancy of the current population); concerning education, we change the average between Mean Years of Schooling and Expected Years of Schooling by the Education Potential (a variable that mimics life potential in this context). As for the material well-being, we propose using the Gross National Income per adult, instead of per capita, while keeping logs in the evaluation. The resulting indicator, called Demographically Adjusted Human Development Index, is the geometric mean of the three new variables suitably normalised. We analyse empirically the effect induced by these changes in the evaluation of human development by comparing this way of measurement with the conventional Human Development Index (HDI) for 168 countries.
    Keywords: Human development, health, education, income, life potential, education potential.
    JEL: O15 I31
    Date: 2019–02–05
  2. By: Coyle, Diane (University of Cambridge); Nakamura, Leonard I. (Federal Reserve Bank of Philadelphia)
    Abstract: What is meant by economic progress, and how should it be measured? The conventional answer is growth in real GDP over time or compared across countries, a monetary measure adjusted for the general rate of increase in prices. However, there is increasing interest in developing an alternative understanding of economic progress, particularly in the context of digitalization of the economy and the consequent significant changes Internet use is bringing about in production and household activity. This paper discusses one alternative approach, combining an extended utility framework considering time allocation over paid work, household work, leisure, and consumption with measures of objective or subjective well-being while engaging in different activities. Developing this wider economic welfare measure would require the collection of time use statistics as well as well-being data and direct survey evidence, such as the willingness to pay for leisure time. We advocate an experimental set of time and well-being accounts, with a particular focus on the digitally driven shifts in behavior.
    Keywords: Internet; time use; measurement; welfare; household
    JEL: D11 D60 I31
    Date: 2019–02–12
  3. By: Syon Bhanot; Jiyoung Han; Chaning Jang
    Abstract: Restrictions like work requirements and constraints on voucher transfers are often used in social welfare systems, but little empirical evidence exists on their impact on wellbeing. We conducted a 10-day randomized experiment with 432 individuals living below the poverty line in the Kawangware settlement of Nairobi, kenya, testing two elements of social welfare design: workfare versus welfare and restricted versus unrestricted vouchers. Participants were randomly assigned to a "Work" condition, involving daily work for unrestricted vouchers, or one of two "Wait" conditions, involving daily waiting for vouchers that were either unrestricted or partially restricted to staple foods. We find that working improved psychological wellbeing relative to waiting, suggesting that means of implementing welfare programs may have important effects on individuals beyond the impact of monetary benefit alone. Furthermore, although restrictions were inframarginal, partially restricted vouchers crowded-in spending on staple foods, suggesting the existence of a "flypaper effect" in spending from restricted vouchers.
    Date: 2018

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