nep-hap New Economics Papers
on Economics of Happiness
Issue of 2020‒01‒13
four papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Weal: the universal core of human well-being By Folk, György
  2. Better off? Distributional comparisons for ordinal data about personal well-being By Jenkins, Stephen P.
  3. How threatening are transformations of reported happiness to subjective wellbeing research? By Kaiser, Caspar; Vendrik, Maarten C. M.
  4. A Socioeconomic Well-Being Index By A. Alexandre Trindade; Abootaleb Shirvani; Xiaohan Ma

  1. By: Folk, György
    Abstract: Well-being is a formative concept of our times, one of the most widely used constructs in the social sciences, publicity, political and lifestyle discourses. Notwithstanding its commonness the term well-being remains elusive, the disagreement regarding how to properly understand and measure well-being persists. Present paper proposes an attempt to reorientate the discourse on well-being by the introduction of a tertium datur between the two extremes of ad infinitum culturally variable and individually malleable and the rigidly materialistic, biologically and by natural scarcity determined interpretations of human nature. Weal defines a singular domain in which human life is possible, sustainable and flourishing. Most other available constructs with comparable aspirations including happiness, desire theories, Quality of Life (QOL), subjective well-being (SWB), and objective lists carry Western cultural biases and lack ontological rigour. Weal is the unitary domain in which human communities balance between self-sufficiency and flourishing in a sustainable way. The descriptive approach to weal, mapping it under the guidance of discrete scientific disciplines reveals a limited set of cardinal aspects, the cardinal needs (CDN). To serve the purpose of reorientation, weal is operationalised as a domain in multidimensional space, each dimension encompassing an optimal level of availability of the fundamental satisfiers between the two extremes of drastic insufficiency and harmful excess. The cardinal needs are briefly presented as assessed fundamental by corresponding research, with some elementary references illustrating their non-infinite nature.
    Keywords: wellbeing, evolutionary anthropology, human being, human need, community, environment
    JEL: A1 A11 O1 Q5 Q56
    Date: 2019–11–05
  2. By: Jenkins, Stephen P.
    Abstract: How to undertake distributional comparisons when personal well-being is measured using income is well-established. But what if personal well-being is measured using subjective well- being indicators such as life satisfaction or self-assessed health status? Has average well-being increased or well-being inequality decreased? How does the distribution of well-being in New Zealand compare with that in Australia, or between young and old people in New Zealand? This paper addresses questions such as these, stimulated by the increasing weight put on subjective well-being measures by international agencies such as the OECD and national governments including New Zealand’s. The paper reviews the methods appropriate for distributional comparisons in the ordinal data context, comparing them with those routinely used for comparisons of income distributions. The methods are illustrated using data from the World Values Survey.
    Keywords: Inequality; ordinal data; subjective well-being; life satisfaction; world Values Survey; ES/L009153/1
    JEL: D31 D63 I31
    Date: 2019–11–22
  3. By: Kaiser, Caspar (University of Oxford); Vendrik, Maarten C. M.
    Abstract: A recent paper by Bond & Lang (2018) forcefully argues that the results of most happiness research are reversible. If they are right, empirical happiness research is in crisis. In this paper, we make four related contributions. First, we show that B&L’s reversal conditions imply that respondents answer happiness questions in a manner that is implausible and which is contradicted by previous empirical research. Second, we show that reversals are driven by effect heterogeneities across the distribution of reported happiness. Third, we give a simple procedure by which such heterogeneities can be detected and provide conditions under which OLS coefficients can be reversed by appropriately relabeling response categories. These conditions turn out to be similar to those given by Schröder & Yitzhaki (2017). Fourth, using GSOEP data, we empirically assess the plausibility of Bond & Lang’s reversal conditions and check whether coefficients from OLS and fixed-effects models can be reversed. Our analysis focuses on household income, unemployment, childbirth, sickness, and marriage. Bond & Lang’s reversal conditions turn out to be implausible for all these variables. Moreover, when using a full set of controls, no reversals of coefficients of the OLS and FE models are possible.
    Date: 2019–07–19
  4. By: A. Alexandre Trindade; Abootaleb Shirvani; Xiaohan Ma
    Abstract: An annual well-being index constructed from thirteen socioeconomic factors is proposed in order to dynamically measure the mood of the US citizenry. Econometric models are fitted to the log-returns of the index in order to quantify its tail risk and perform option pricing and risk budgeting. By providing a statistically sound assessment of socioeconomic content, the index is consistent with rational finance theory, enabling the construction and valuation of insurance-type financial instruments to serve as contracts written against it. Endogenously, the VXO volatility measure of the stock market appears to be the greatest contributor to tail risk. Exogenously, "stress-testing" the index against the politically important factors of trade imbalance and legal immigration, quantify the systemic risk. For probability levels in the range of 5% to 10%, values of trade below these thresholds are associated with larger downward movements of the index than for immigration at the same level. The main intent of the index is to provide early-warning for negative changes in the mood of citizens, thus alerting policy makers and private agents to potential future market downturns.
    Date: 2020–01

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