nep-hap New Economics Papers
on Economics of Happiness
Issue of 2019‒04‒01
four papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Presidential Elections, Divided Politics, and Happiness in the U.S. By Sergio Pinto; Panka Bencsik; Tuugi Chuluun; Carol Graham
  2. Optimism, Pessimism and Life Satisfaction: An Empirical Investigation By Alan Piper
  3. Childhood Circumstances and Young Adulthood Outcomes: The Role of Mothers' Financial Problems By Marta Barazzetta; Andrew E. Clark; Conchita D'Ambrosio
  4. Does Hope Lead to Better Futures? Evidence from a Survey of the Life Choices of Young Adults in Peru By Carol Graham; Julia Ruiz Pozuelo

  1. By: Sergio Pinto (University of Maryland); Panka Bencsik (University of Sussex); Tuugi Chuluun (Loyola University Maryland); Carol Graham (The Brookings Institution)
    Abstract: We examine the effects of the 2016 and 2012 U.S. presidential election outcomes on the subjective well-being of Democrats and Republicans using large-scale Gallup survey data and a regression discontinuity approach. We use metrics that capture two dimensions of well-being – evaluative (life satisfaction) and hedonic (positive and negative affect) – and document a significant negative impact on both dimensions of well-being for Democrats immediately following the 2016 election and a negative but much smaller impact for Republicans following the 2012 election. However, we found no equivalent positive effect for those identifying with the winning party following either election. The results also vary across gender and income groups, especially in 2016, with the negative well-being effects more prevalent among women and middle-income households. In addition, in 2016 the votes of others living in the respondent’s county did not have a large impact on individual well-being, although there is some suggestive evidence that Democrats in more pro-Trump counties suffered a less negative effect, while Republicans in less pro-Trump and more typically urban counties were actually negatively impacted by the election outcome. We also find evidence that being on the losing side of the election had negative effects on perceptions about the economy, financial well-being, and the community of residence. Lastly, the evaluative well-being gaps between the different party affiliations tend to persist longer, with those in expected life satisfaction lasting until at least the end of 2016, while the hedonic well-being gaps typically dissipate within the two weeks following the election.
    Keywords: Elections, political parties, subjective well-being, life satisfaction, emotions
    JEL: D72 I31
    Date: 2019–03
  2. By: Alan Piper
    Abstract: This empirical investigation into life satisfaction, using nationally representative German panel data, finds a substantial association with an individual’s thoughts about the future, whether they are optimistic or pessimistic about it. Furthermore, including individuals’ optimism and pessimism about the future substantially increases the explanatory power of standard life satisfaction models. The thoughts that individuals have about the future contribute substantially to their current life satisfaction. In particular, the reduction in life satisfaction experienced by individuals who report being pessimistic is greater than that for well-understood negative events like unemployment. These effects are attenuated but remain substantial after controlling for individual fixed effects, statistically matching on observable variables between optimistic and pessimistic individuals, and addressing the potential endogeneity of optimism and pessimism to life satisfaction. Moreover, these effects are robust to controlling for future life events that may be anticipated.
    Keywords: Life satisfaction, subjective well-being, mental health, entropy balancing, GMM, dynamics, endogeneity, SOEP
    JEL: C23 D84 I31
    Date: 2019
  3. By: Marta Barazzetta; Andrew E. Clark; Conchita D'Ambrosio
    Abstract: We here consider the cognitive and non-cognitive consequences on young adults of growing up with a mother who reported experiencing major financial problems. We use UK data from the Avon Longitudinal Study of Parents and Children to show that early childhood financial problems are associated with worse adolescent cognitive and non-cognitive outcomes, controlling for both income and a set of standard variables, and in value-added models controlling for children's earlier age-5 outcomes. The estimated effect of financial problems is almost always larger in size than that of income. Around one-quarter to one-half of the effect of financial problems on the non-cognitive outcomes seems to transit through mother's mental health.
    Keywords: income, financial problems, child outcomes, subjective well-being, behaviour, education, ALSPAC
    JEL: I31 I32 D60
    Date: 2019–03
  4. By: Carol Graham (The Brookings Institution); Julia Ruiz Pozuelo (University of Oxford)
    Abstract: We use a novel survey of poor and near poor urban young adults in Peru to study the role of hope in individuals’ propensity to invest in the future. We explored the past predictors of aspirations and life satisfaction today, based on battery of questions about past experience, education and health status, relationships with parents and friends, as well as about negative shocks. We included questions on current and past life satisfaction, internal and external locus of control, self-esteem, discount rates, optimism, and education aspirations. We found remarkably high levels of resilience and education aspirations among our survey population. Eighty-eight percent of our young adults aspire to completing college or post-college education. In addition, most of the respondents in the high aspirations categories had experienced one or more negative shocks in the past. Respondents in the high aspirations categories are also far less likely to partake in risky behaviors, such as smoking or having unsafe sex. This provides additional evidence suggesting that individuals with high aspirations and/or hope for the future are more likely to invest in those futures as well as to avoid behaviors that are likely to jeopardize their futures. While we do not know how lasting that hope channel is, particularly in the face of future shocks or disappointments, we hope to answer that question in future research.
    Keywords: optimism
    JEL: I00 J24
    Date: 2018–06

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