nep-hap New Economics Papers
on Economics of Happiness
Issue of 2021‒01‒04
seven papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The U-shape of Happiness in Scotland By David N.F. Bell; David G. Blanchflower
  2. Happiness and Aging in the United States By David G. Blanchflower; Carol Graham
  3. Do Wealth Shocks Matter for the Life Satisfaction of the Elderly? Evidence from the Health and Retirement Study By Marco Cozzi; Qiushan Li
  4. Preference to work and its effects on economic growth and happiness By Jim Yongtao Jin; Geethanjali Selvaretnam
  5. Quantifying the externalities of renewable energy plants using wellbeing data: The case of biogas By Christian Krekel; Julia Rechlitz; Johannes Rode; Alexander Zerrahn
  6. Should we cheer together? Gender differences in instantaneous well-being during joint and solo activities: An application to COVID-19 lockdowns By Giménez-Nadal, José Ignacio; Molina, José Alberto; Velilla, Jorge
  7. Happy times: identification from ordered response data By Shuo Liu; Nick Netzer

  1. By: David N.F. Bell; David G. Blanchflower
    Abstract: We examine well-being in Scotland using micro data from the Scottish Health Survey and the UK Annual Population Surveys. We find evidence of a midlife low in Scotland in well-being at around age fifty using a variety of measures of both happiness and unhappiness. We confirm that higher consumption of fruit and vegetables is associated with higher levels of happiness in Scotland. We compare this with evidence for England from the Health Survey of England. The decline in well-being between youth and midlife is comparable in size to the loss of a spouse or of a job and around half of the fall in well-being in the COVID-19 lockdown. We also find a mid-life peak in suicides in Scotland. Despite higher mortality and suicide rates in Scotland than in England, paradoxically we find that the Scots are happier than the English. Northern Ireland is the happiest of the four home countries. We also find evidence of U-shapes in England, Wales and Northern Ireland in the mid to late forties.
    JEL: I31
    Date: 2020–11
  2. By: David G. Blanchflower; Carol Graham
    Abstract: The past decade has brought increasing concern, in countries all over the world, of declines in mental health and well-being. Across countries, chronic depression and suicide rates peak in midlife. In the U.S., deaths of despair are most likely to occur in these years, and the patterns are robustly associated with unhappiness and stress. There is also a less-known relationship between well-being and longevity among the elderly, particularly for those over age 70. In this paper, we analyze several different data sets for the U.S. and provide extensive evidence on the middle age patterns, how they differ across the married and unmarried, and review new work on the elderly. The relationship between well-being and aging has a robust association with trends that can ruin lives and shorten life spans. It applies to much of the world’s population and links to behaviors and outcomes that merit the attention of scholars and policymakers alike.
    JEL: I31 J01
    Date: 2020–11
  3. By: Marco Cozzi; Qiushan Li (Department of Economics, University of Victoria)
    Abstract: This note studies the determinants of life satisfaction for the elderly and near-elderly in the U.S., using data from the Health and Retirement Study. The econometric analysis exploits the 2008-09 financial crisis as a source of exogenous variation in wealth, caused by a long-lasting decrease in asset prices. Although absolute changes in wealth are not found to systematically affect individuals' well-being, losing 60% or more of the pre-crisis wealth negatively impacted measures of life satisfaction.
    Keywords: Wealth, Uninsurable shocks, Life Satisfaction, Subjective Well-Being
    Date: 2020–12–06
  4. By: Jim Yongtao Jin; Geethanjali Selvaretnam
    Abstract: There are circumstantial and researched evidence that people’s preferences to work differ and change. We depart from partial equilibrium models which show decisions for labour and leisure depend on their relative prices. This paper presents a simple general equilibrium framework to show that labour hours are determined by the preference to work and are independent of real wages and consumption. Moreover, the theoretical model enables us to estimate the preference to work at the macro level. A panel data analysis across countries for the years 1990 – 2018 shows with statistical significance that preference to work has been on the downward trend and has a negative relationship with GDP per capita and the ratio of wage income to GDP. Results also show that higher the preference to work, higher the GDP growth rate and lower the reported level of happiness.
    Keywords: work, labour hours, preference to work, economic growth, happiness, general equilibrium
    JEL: J22 O4 I31 D5
    Date: 2020–12
  5. By: Christian Krekel; Julia Rechlitz; Johannes Rode; Alexander Zerrahn
    Abstract: Although there is strong support for renewable energy plants, they are often met with local resistance. We quantify the externalities of renewable energy plants using well-being data. We focus on the example of biogas, one of the most frequently deployed technologies besides wind and solar. To this end, we combine longitudinal household data with novel panel data on more than 13,000 installations in Germany. Identification rests on a spatial difference-in-differences design exploiting exact geographical coordinates of households, biogas installations and wind direction and intensity. We find limited evidence for negative externalities: impacts are moderate in size and spatially confined to a radius of 2, 000 metres around plants. We discuss implications for research and regional planning, in particular minimum setback distances and potential monetary compensations.
    Keywords: renewables, biogas, externalities, social acceptance, wellbeing, spatial analysis, economic geography
    JEL: C23 Q42 Q51 R20
    Date: 2020–12
  6. By: Giménez-Nadal, José Ignacio; Molina, José Alberto; Velilla, Jorge
    Abstract: The COVID-19 pandemic has confined millions in their homes, representing an unprecedented case for spending more time together with family members. This is a challenge for households, given that more time with the partner or children may not necessarily translate into increased well-being. This paper explores subjective well-being in the uses of time for US and UK workers, differentiating between solo activities and activities done with family members, at home and outside the home. Using American and British time use surveys, we compute the instant utility associated with paid work, unpaid work, leisure, and childcare activities. The results show that workers prefer joint leisure to solo leisure, and that significant differences exist between female and male workers for solo and joint market work and housework. Furthermore, we simulate a lockdown situation, which suggests diverging effects of a lockdown in the US and the UK, and on women and men. The conclusions of this paper may help to assess the psychological consequences of COVID-19 lockdowns, beyond the negative economic and labour market consequences.
    Keywords: subjective well-being,togetherness,gender difference
    JEL: D10 J16 J22
    Date: 2020
  7. By: Shuo Liu; Nick Netzer
    Abstract: Surveys are an important tool in economics and in the social sciences more broadly. However, methods used to analyse ordinal survey data (e.g., ordered probit) rely on strong and often unjustified distributional assumptions. In this paper, we propose using survey response times to solve that problem. Our main identifying assumption is that individual response time is decreasing in the distance between the value of the latent variable and an indecision threshold. This assumption is supported by a large body of evidence on chronometric effects in psychology and neuroscience. We provide conditions under which the expected value of the latent variable (e.g., average happiness) can be compared across groups, even without making distributional assumptions. By applying it to an online survey experiment, we show how our method can be implemented in practice and gives rise to new insights.
    Keywords: Surveys, ordinal data, response times, non-parametric identification
    JEL: C14 D60 D91 I31
    Date: 2020–12

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