nep-hap New Economics Papers
on Economics of Happiness
Issue of 2021‒01‒11
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The Easterlin Paradox By Easterlin, Richard A.; O’Connor, Kelsey J.
  2. Finding Optimal Cancer Treatment using Markov Decision Process to Improve Overall Health and Quality of Life By Navonil Deb; Abhinandan Dalal; Gopal Krishna Basak
  3. When to release the lockdown: A wellbeing framework for analysing costs and benefits By Andrew Clark; Jan-Emmanuel De Neve; Daisy Fancourt; Nancy Hey; Christian Krekel; Richard Layard; Gus O'Donnell
  4. GDP, Wellbeing, and Health: Thoughts on the 2017 Round of the International Comparison Program By Angus Deaton; Paul Schreyer
  5. Quantifying the Externalities of Renewable Energy Plants Using Wellbeing Data: The Case of Biogas By Krekel, Christian; Rechlitz, Julia; Rode, Johannes; Zerrahn, Alexander

  1. By: Easterlin, Richard A.; O’Connor, Kelsey J.
    Abstract: The Easterlin Paradox states that at a point in time happiness varies directly with income, both among and within nations, but over time the long-term growth rates of happiness and income are not significantly related. The principal reason for the contradiction is social comparison. At a point in time those with higher income are happier because they are comparing their income to that of others who are less fortunate, and conversely for those with lower income. Over time, however, as incomes rise throughout the population, the incomes of one's comparison group rise along with one's own income and vitiates the otherwise positive effect of own-income growth on happiness. Critics of the Paradox mistakenly present the positive relation of happiness to income in cross-section data or in short-term time fluctuations as contradicting the nil relation of long-term trends.
    Keywords: Easterlin Paradox,economic growth,income,happiness,life satisfaction,subjective well-being,long-term,short-term,trends,fluctuations,transition countries,less developed countries,developed countries
    JEL: I31 D60 O10 O5
    Date: 2020
  2. By: Navonil Deb; Abhinandan Dalal; Gopal Krishna Basak
    Abstract: Markov Decision Processes and Dynamic Treatment Regimes have grown increasingly popular in the treatment of diseases, including cancer. However, cancer treatment often impacts quality of life drastically, and people often fail to take treatments that are sustainable, affordable and can be adhered to. In this paper, we emphasize the usage of ambient factors like profession, radioactive exposure, food habits on the treatment choice, keeping in mind that the aim is not just to relieve the patient of his disease, but rather to maximize his overall physical, social and mental well being. We delineate a general framework which can directly incorporate a net benefit function from a physician as well as patient's utility, and can incorporate the varying probabilities of exposure and survival of patients of varying medical profiles. We also show by simulations that the optimal choice of actions often is sensitive to extraneous factors, like the financial status of a person (as a proxy for the affordability of treatment), and that these actions should be welcome keeping in mind the overall quality of life.
    Date: 2020–11
  3. By: Andrew Clark; Jan-Emmanuel De Neve; Daisy Fancourt; Nancy Hey; Christian Krekel; Richard Layard; Gus O'Donnell
    Abstract: In choosing when to end the lockdown, policy-makers have to balance the impact of the decision upon incomes, unemployment, mental health, public confidence and many other factors, as well as (of course) upon the number of deaths from COVID-19. To facilitate the decision it is helpful to forecast each factor using a single metric. We use as our metric the number of Wellbeing-Years resulting from each date of ending the lockdown. This new metric makes it possible to compare the impact of each factor in a way that is relevant to all public policy decisions.
    Keywords: COVID-19, Wellbeing Economics, Cost-Benefit Analysis, Health Policy
    JEL: D6 D61 H12 I31
    Date: 2020–04
  4. By: Angus Deaton; Paul Schreyer
    Abstract: In March 2020, the International Comparison Project published its latest results, for the calendar year 2017. This round presents common-unit or purchasing-power-parity data for 137 countries on Gross Domestic Product and its components. We review a number of important issues, what is new, what is not new, and what the new data can and cannot do. Of great importance is the lack of news, that the results are broadly in line with earlier results from 2011. We consider the relationship between national accounts measures and health, particularly in light of the COVID-19 epidemic which may reduce global inequality, even as it increases inequality within countries. We emphasize things that GDP cannot do, some familiar—like its silence on distribution—and some less familiar—including its increasing detachment from national material wellbeing in a globalized world where international transfers of capital and property rights can have enormous effects on GDP, such as the 26 percent increase in Ireland’s GDP in 2015.
    JEL: E01 F10 F62 I15 I31 P22 Y1
    Date: 2020–12
  5. By: Krekel, Christian (London School of Economics); Rechlitz, Julia (DIW Berlin); Rode, Johannes (Darmstadt University of Technology); Zerrahn, Alexander (DIW Berlin)
    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 wellbeing 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
    JEL: C23 Q42 Q51 R20
    Date: 2020–12

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