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on Economics of Happiness |
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Issue of 2019‒03‒04
nine papers chosen by |
| By: | Fernandez, Cheryl Joy (Asian Development Bank); Raitzer, David (Asian Development Bank); Ginting , Edimon (Asian Development Bank) |
| Abstract: | Economic analysis often faces challenges in the valuation of nonmarket goods and services. The traditional set of nonmarket valuation tools for measuring Marshallian economic surplus has limitations related to potential bias in stated preferences and endogeneity of nonmarket amenity placement in revealed preference studies. The life satisfaction approach offers a Hicksian compensating variationbased alternative, which uses self-reported subjective well-being to calculate the marginal rate of substitution of income for nonmarket amenities or services. The conceptual basis for the approach is explained and illustrated with an example from Iloilo, Philippines. Recommendations are offered for future application of the technique in the economic analysis of investment projects. |
| Keywords: | economic analysis; life satisfaction; natural disasters; Philippines; valuation; well-being |
| JEL: | D61 D69 D90 H40 Q51 |
| Date: | 2019–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0569&r=all |
| By: | Lieze Sohiers; Luc Van Ootegem; Elsy Verhofstadt (-) |
| Abstract: | We investigate the consequences of retirement from work for the overall well-being of individuals aged 50 and above. The overall well-being is approximated by two indicators: the life satisfaction indicator which is a cognitive reflection of the satisfaction with life and a multidimensional indicator about Control, Autonomy and Self-realizations (CAS). The latter indicator is related to the capabilities concept (specifically agency-freedom) of Sen (1985, 1999). It evaluates overall well-being by the level of agency or the ability of people to pursue the things they want to do and be the humans they want to be. Using the longitudinal Survey of Health, Ageing and Retirement in Europe (SHARE), we find that employed and recently retired respondents have no different level of life satisfaction. Older workers do report a higher level of agency-freedom when they retire. This paper additionally investigates several forms of heterogeneities in the transition from work to retirement. We consider partial, early and joint retirement, part-time and self-employment, and job quality. We also investigate whether the extra leisure time of retired respondents affects well-being. We find that there is no difference in overall well-being between being partially and fully retired, between being retired before or after the normal retirement age or between those who retire simultaneously with their partner and those who don’t. However, for some older workers, such as those employed with a low quality job, retirement can be a relief from their current employment status. Retired respondents have more care duties which affects their well-being negatively. Charity work and sport activities affect well-being positively. |
| Keywords: | retirement; life satisfaction; agency; CASP; aging; well-being |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:19/957&r=all |
| By: | Merz, Joachim (Leuphana University Lüneburg); Peters, Normen (Leuphana University Lüneburg) |
| Abstract: | Neither market income nor consumption expenditure provides an adequate picture of individual standard of living. It is time which enables and restricts individual activities and is a further brick to a more comprehensive picture of individual well-being. In our study we focus on a prominent part of time use in non-market services: it is parental child care which contributes not only to individual but also to societal well-being. Within a novel approach we ask for multidimensional polarization effects of parental child care where compensation/substitution of time for parental child care versus income is interdependently evaluated by panel estimates of society's subjective well-being. The new interdependent 2DGAP measure thereby provides multidimensional polarization intensity information for the poor and the rich and disentangles the single time and income contribution to subjective well-being for targeted policies ensuring at the same time the interdependence of the polarization dimensions. Socio-economic influences on the polarization pole risk and intensity will be quantified by two stage Heckman estimates. The analyses are based on the German Socio-Economic Panel with 21 waves and robust fixed effects estimates as well as the German Time Use Surveys 1991/92 and actual 2012/13 with detailed diary time use data. Prominent result: compensation between parental child care time and income proved to be significant, but there are multidimensional regions with no compensation, where parental child care time deficit is not compensated by income. Interdependent multidimensional polarization by headcount and intensity increased significantly over the twenty years under investigation with remarkable risk and intensity differences. |
| Keywords: | parental child care, multidimensional polarization of interdependent time and income, subjective well-being, poverty and affluence, minimum multidimensional 2DGAP risk and intensity, German Socio-Economic Panel (SOEP), German Time Use Study (GTUS 1991/92 and 2012/13) |
| JEL: | I31 I32 J22 D10 D31 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12145&r=all |
| By: | Chen, Le-Yu (Academia Sinica); Oparina, Ekaterina (University of Surrey); Powdthavee, Nattavudh (University of Warwick); Srisuma, Sorawoot (University of Surrey) |
| Abstract: | Econometric analyses in the happiness literature typically use subjective well-being (SWB) data to compare the mean of observed or latent happiness across samples. Recent critiques show that com-paring the mean of ordinal data is only valid under strong assumptions that are usually rejected by SWB data. This leads to an open question whether much of the empirical studies in the economics of happiness literature have been futile. In order to salvage some of the prior results and avoid future issues, we suggest regression analysis of SWB (and other ordinal data) should focus on the median ra-ther than the mean. Median comparisons using parametric models such as the ordered probit and logit can be readily carried out using familiar statistical softwares like STATA. We also show a previously as-sumed impractical task of estimating a semiparametric median ordered-response model is also possi-ble by using a novel constrained mixed integer optimization technique. We use GSS data to show the famous Easterlin Paradox from the happiness literature holds for the US independent of any paramet-ric assumption. |
| Keywords: | ordered-response model, mixed-integer optimization, median regression, subjective well-being |
| JEL: | C24 C61 I31 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12152&r=all |
| By: | Kessler, Jacqueline; Ferreira, Susana; Ahmadiani, Mona |
| Keywords: | International Development |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea19:284330&r=all |
| By: | David G. Blanchflower; Andrew E. Clark |
| Abstract: | The common finding of a zero or negative correlation between the presence of children and parental well-being continues to generate research interest. We here consider over one million observations on Europeans from ten years of Eurobarometer surveys, and in the first instance replicate this negative finding, both in the overall data and then for most different marital statuses. Children are expensive, and controlling for financial difficulties turns almost all of our estimated child coefficients positive. We argue that financial difficulties explain the pattern of existing results by parental education and income, and country income and social support. Marital status matters. Kids do not raise happiness for singles, the divorced, separated or widowed. Last, we underline that all children are not the same, with step-children commonly having a more negative correlation than children from the current relationship. |
| JEL: | D14 I31 J13 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25597&r=all |
| By: | Alan Piper (Europa-Universität Flensburg, Internationales Institut für Management, Abteilung Internationale und Institutionelle Ökonomik) |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fln:wpaper:030&r=all |
| By: | Schünemann, Johannes; Strulik, Holger; Trimborn, Timo |
| Abstract: | The anticipation of bad future events reduces currently experienced happiness and it may through this channel elicit detrimental behavioral responses. We explore this idea in the context of endogenous health and aging. We integrate physiological aging into a life-cycle model, calibrate it with data from gerontology, and analyze how the anticipation of a deteriorating state of health affects health spending, life expectancy, and the value of life. In counterfactual computational experiments we compare behavior and outcomes of anticipating and non-anticipating individuals and find that anticipation decreases lifetime utility, health investments, and longevity. We then use the model to contribute to the literature on information avoidance. We find that anticipation provides a strong motive to avoid medical testing even when the likelihood of developing a certain disease is high and the cost for the test is low. |
| Keywords: | Health,Anticipation,Longevity,Health Behavior,Value of Life,Information Avoidance |
| JEL: | D11 D91 I12 J17 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:365&r=all |
| By: | Georgiev, Yordan (Bank of England); Nagy-Mohacsi, Piroska (Institute of Global Affairs, London School of Economics); Plekhanov, Alexander (European Bank for Reconstruction and Development) |
| Abstract: | Since 1990, countries in emerging Europe and Central Asia have undergone comprehensive economic transformation. These reforms helped achieve an impressive degree of income convergence toward the levels of the advanced economies, although at the cost of rising inequality and lower life satisfaction. Over the last decade, both the speed of reforms and economic growth have slowed down markedly. To sustain convergence, greater emphasis needs to be put on structural reforms, facilitating innovation and boosting firm productivity while, at the same time, taking into account the distributional impact of reforms. |
| Keywords: | economic growth; structural reform; transition |
| JEL: | O57 P24 |
| Date: | 2017–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0523&r=all |