nep-hap New Economics Papers
on Economics of Happiness
Issue of 2020‒11‒30
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The Mediating Role of Urbanization on the Composition of Happiness By Cristina Bernini; Alessandro Tampieri
  2. Valuing depression using the well-being valuation approach By Andrén, Daniela
  3. Do people choose what makes them happy and how do they decide at all? A theoretical inquiry By Scheuer, Niklas

  1. By: Cristina Bernini; Alessandro Tampieri
    Abstract: This paper investigates whether urbanization plays a role in determining the importance of each happiness domain on overall happiness. The analysis focuses on Italy. We exploit a multilevel model to consider regional heterogeneity in happiness’s determinants. We first verify whether a direct effect of urbanization exists on each specific components of happiness, as well as on overall happiness. Consistent with the findings in the literature, happiness decreases with urbanization. In the analysis of mediating role, we find that the importance of satisfaction with economic conditions and family explains more overall happiness in urban areas. On the contrary, satisfaction with health, friendships and environment gain more weight in rural areas.
    Keywords: subjective well-being, happiness function, urbanization, regions, multilevel models
    JEL: I31 R10
    Date: 2020
  2. By: Andrén, Daniela (Örebro University School of Business)
    Abstract: The continuously dramatic increase of the number of people suffering from depression attracts an increasing demand for effective ways of preventing depression. Without the need for new interventions, there is also a continuous call for a more robust framework for economic evaluation of public interventions. Taking in account people’s preferences for public goods is not straightforward to quantify, and therefore, without the importance of designing new technique for valuing nonmarket goods and services, it is equally important to use methods that are not yet established as traditional. One less used method to assess the cost of depression in monetary terms is the well-being valuation method or the life satisfaction approach, which requires answers to questions that are significantly less time demanding for the respondents than more traditional approaches to valuation. We added a well-being question to a contingent valuation web-survey that describes hypothetical interventions aimed to prevent depression and estimated that the loss in life satisfaction for individuals who directly and/or indirectly experienced depression varies between approximately 5000 and 17000 Euro per year.
    Keywords: depression; subjective well-being; well-being valuation method (WVM); life satisfaction approach (LSA)
    JEL: A12 D60 I31
    Date: 2020–11–11
  3. By: Scheuer, Niklas
    Abstract: We develop a theoretical model that jointly explains optimal choices and happiness. We work with constant elasticity of substitution functions for utility and happiness. Employing a choice framework, individuals are confronted with two options. When there exists a trade-off, we determine parametric conditions for which individual happiness and utility coincide as well as oppose each other. Comparing the empirical evidence of Benjamin et al. (2012), our model can explain three out of four possible happiness-utility combinations. Regarding how individuals actually decide, our findings suggest that this is partly random. This explanation accounts for the remaining 11.2 % of individuals.
    Keywords: Consumer Economics,Theory,General Welfare,Well-Being,Micro-Based Behavioral Economics
    JEL: D11 D91 I31
    Date: 2020

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