nep-hap New Economics Papers
on Economics of Happiness
Issue of 2022‒02‒07
eight papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Causality in the Link between Income and Satisfaction: IV Estimation with Internal Instruments By Susanne Elsas
  2. COVID-19 infections, labour market shocks, and subjective well-being By Ferdi Botha; John P. de New
  3. Life Satisfaction and the Human Development Index Across the World By Remi Yin; Anthony Lepinteur; Andrew E. Clark; Conchita D’ambrosio
  4. Time, Income and Subjective Well-Being – 20 Years of Interdependent Multidimensional Polarization in Germany By Joachim Merz; Bettina Scherg
  5. Demography and Well-being By Andrew E. Clark
  6. Television, Health, and Happiness: A Natural Experiment in West Germany By Adrian Chadi; Manuel Hoffmann
  7. Pandemic Policy and Life Satisfaction in Europe By Andrew E. Clark; Anthony Lepinteur
  8. Can the diligent governance increase subjective wellbeing? New evidence from environmental regulations in China By Shu Guo; ZhongXiang Zhang

  1. By: Susanne Elsas
    Abstract: Usually, it is expected that income increases life satisfaction. In recent years tough, research emerged that shows how subjective well-being, including satisfaction, influences objective measures, as for example income. This would then require explicit identification strategies for estimating effects of income on life satisfaction. I address this issue using German SOEP data and Lewbel’s (2012) method, which generates instruments from heteroscedasticity. This allows identification of two separate causal effects in the link between income and life satisfaction: (1) income affecting satisfaction and (2) satisfaction affecting income. This analysis focuses on life satisfaction and equivalized income, because this is the income measure most welfare analyses use to assess utility of income. Results show no significant effects of income on life satisfaction, but effects of satisfaction on income. This suggest that the effect of income on life satisfaction may be overstated in standard approaches that do not account for this reverse causality – possibly due to reverse causality, which is likely rooted in response behavior, rather than income generation.
    Keywords: Life satisfaction, income satisfaction, income, utility of income, reverse causality, instrumental variable estimation, internal instruments, lewbel instruments
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1143&r=
  2. By: Ferdi Botha (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne | ARC Centre of Excellence for Children and Families over the Life Course); John P. de New (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne | ARC Centre of Excellence for Children and Families over the Life Course)
    Abstract: This is the first paper to present novel findings on how simultaneously (a) labour market shocks and (b) infections in the household, directly due to COVID-19, have impacted on life satisfaction and domain satisfactions. Using data from a world-wide online survey of almost 5,700 respondents across six countries, we estimate the associations of COVID-19-related labour market shocks and COVID-19 infection with life satisfaction and a range of domain satisfactions. Directly due to COVID-19, experiencing either (i) a reduction in salary and working hours, or (ii) unemployment or filing for unemployment benefits is significantly associated with lower reported satisfaction with family life, family health, available health services, and finances. The relationship is especially large for financial satisfaction. Reporting any COVID-19 labour market shock is also related to lower life satisfaction. Persons in households that have experienced a COVID-19 infection report significantly lower satisfaction with life, health, family life, and finances. Noteworthy is that labour market shocks are much more important in explaining subjective well-being compared to COVID-19 infections. The findings highlight the wide range of subjective well-being domains adversely affected by shocks to the labour market and health brought about by the COVID-19 pandemic.
    Keywords: COVID-19; coronavirus; labour market shocks; subjective well-being
    JEL: I10 I31 J65
    Date: 2020–08
    URL: http://d.repec.org/n?u=RePEc:iae:iaewps:wp2020n14&r=
  3. By: Remi Yin (Uni.lu - Université du Luxembourg); Anthony Lepinteur (Uni.lu - Université du Luxembourg); Andrew E. Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Conchita D’ambrosio (Uni.lu - Université du Luxembourg)
    Abstract: We use annual data on over 150 countries between 2005 and 2018 to look at the relationship between subjective well-being (both cognitive and affective) and the Human Development Index (HDI). The HDI appears to be more closely related to cognitive than affective well-being. We also consider the relationships between the three HDI components (the Income, Health, and Education Indices) and well-being, and find that, on average, the Income Index has the strongest predictive power. Importantly, we find that the three HDI components only matter equally in Western and rich countries. Our analysis contributes to the discussion about cultural sensitivity in paradigms of societal development in two ways. We first show that differences in preferences toward development aims exist. Second, we propose a weighting procedure for a culturally-sensitive version of the HDI.
    Keywords: Human Development Index,Subjective well-being,Gallup World Poll,Country groups
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03467218&r=
  4. By: Joachim Merz; Bettina Scherg
    Abstract: Society drifts apart in many dimensions. Economists focus on income of the poor and rich and the distribution of income but a broader spectrum of dimensions is required to draw the picture of multiple facets of individual life. In our study of multidimensional polarization we extend the income dimension by time, a pre-requisite and fundamental resource of any individual activity. In particular, we consider genuine personal time as a pronounced source of social participation in the sense of social inclusion/exclusion and Amartya Sen’s capability approach. With an interdependence approach to multidimensional polarization we allow compensation between time and income, parameters of a CES-type subjective well-being function, where a possible substitution is evaluated empirically by the German population instead of arbitrarily chosen. Beyond subjective well-being indices we propose and apply a new intensity/gap measure to multidimensional polarization, the mean minimum polarization gap 2DGAP. This polarization intensity measure provides transparency with regard to each single attribute, which is important for targeted policies, while at the same time their interdependent relations is respected. The empirical investigation of interdependent multidimensional polarization incidence and intensity uses the German Socio-Economic Panel (SOEP) and detailed time use diary data from the three German Time Use Surveys (GTUS) 1991/92, 2001/02 and the actual 2012/13. We focus on the working individuals where the working poor requires increasing interest in the economic and social political discussion. The microeconometric two-stage selectivity corrected estimation of interdependent multidimensional risk (incidence) and intensity quantifies socio-economic factors behind. Four striking results appear: First, genuine personal leisure time additional to income is a significant subjective well-being and polarization dimension. Second, its interdependence, its compensation/substitution, evaluated by the German Society, is of economic and statistical significance. Remarkably, besides compensation regimes, there are interdependent multidimensional polarization regimes where even higher income cannot compensate time deficits. Third, interdependent multidimensional polarization incidence (headcount ratio) decreased over those 20 years in Germany, however and in particular, as shown by the new minimum 2DGAP approach, interdependent multidimensional polarization intensity increased over those 20 years in Germany. Fourth, there are different multidimensional polarization results and developments for the poverty and affluence poles and regimes, for fulltime self-employed, employees and subsequently for further socio-economic groups. And, polarization also appears with respect to social participation.
    Keywords: Interdependent multidimensional polarization, time and income poverty and affluence, subjective well-being, life satisfaction, minimum multidimensional polarization intensity gap (2DGAP), extended economic well-being, satisfaction/happiness, social participation, working poor and affluent, middle class, selfemployment and employees, CES well-being function, two-stage Heckman estimates of polarization incidence and intensity
    JEL: I32 D31 J22
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1154&r=
  5. By: Andrew E. Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Demography studies the characteristics of populations. One such characteristic is well-being: this was the subject of the 2019 Wittgenstein Conference. Here, I discuss how objective well-being domains can be summarised to produce an overall well-being score, and how taking self-reported (subjective) well-being into account may help in this effort. But given that there is more than one type of subjective well-being score, we would want to know which one is "best". We would also need to decide whose well-being counts, or counts more than that of others. Finally, I briefly mention the potential role of adaptation and social comparisons in the calculation of societal well-being.
    Keywords: Subjective well-being,Demography,Measurement,Policy
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03467198&r=
  6. By: Adrian Chadi; Manuel Hoffmann
    Abstract: Watching television is the most time-consuming human activity besides work but its role for individual well-being is unclear. Negative consequences portrayed in the literature raise the question whether this popular pastime constitutes an economic good or bad, and hence serves as a prime example of irrational behavior reducing individual health and happiness. Using rich panel data, we are the first to comprehensively address this question by exploiting a large-scale natural experiment in West Germany, where people in geographically restricted areas received commercial TV via terrestrial frequencies. Contrary to previous research, we find no health impact when TV consumption increases. For life satisfaction, we even find positive effects. Additional analyses support the notion that TV is not an economic bad and that non-experimental evidence seems to be driven by negative self-selection.
    Keywords: Health; Happiness; Well-being; Natural experiment; Television consumption; Time-use; Entertainment; CSPT; ArcGIS; Mass media
    JEL: C26 D12 I31 H12 J22 L82
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1148&r=
  7. By: Andrew E. Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Anthony Lepinteur (Uni.lu - Université du Luxembourg)
    Abstract: We use data from the COME-HERE longitudinal survey collected by the University of Luxembourg to assess the effects of the policy responses to the COVID-19 pandemic on life satisfaction in France, Germany, Italy, Spain and Sweden over the course of 2020. Policy responses are measured by the Stringency Index and the Economic Support Index from the Blavatnik School of Government. Stringency is systematically associated with lower life satisfaction, controlling for the intensity of the pandemic itself. This stringency effect is larger for women, those with weak ties to the labor market, and in richer households. The effect of the Economic Support is never statistically different from zero.
    Keywords: COVID-19,Life satisfaction,Policy stringency,Economic support
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03467211&r=
  8. By: Shu Guo (Tianjin University); ZhongXiang Zhang (China Academy of Energy)
    Abstract: With the appearance of “wellbeing stagnation”, the Chinese government has gradually realized the negative impact of increasingly severe environmental problem on people’s wellbeing, and has then has formulated a series of environmental policies. Based on the balanced panel data from2014 to 2018 from China Family Panel Studies (CFPS)and by means of the fixed effects model, we analyze the relationships between heterogeneous environmental regulations (ERs) and subjective wellbeing (SWB) from the perspective of diligent governance. Our results show that command-control environmental regulation (CER) and voluntary environmental regulation (VER)have positive effects on SWB, but there exist the heterogeneity effects in the links between ERs and SWB. Vulnerable populations, including those with rural hukou, less educated, have paidmore attention to VER, whereas the view of other groups is the opposite. Similarly, the people with low incomes or living in economically underdeveloped areas or western region, are sensitive to VER, while the others only pay attention to CER.The SWB of those with better health can be enhanced by CER, and the SWB of those with poor health are unaffected by CER and VER.Further channel analysis illustrates that CER can improve SWB by increasing people’s evaluation of the government, while VER cannot. Our results imply that the people would place more weight on environmental governance as their income rises, and can help the government institute more flexible environmental policies to improve people’s wellbeing.
    Keywords: Subjective wellbeing, environmental regulations, heterogeneity, balanced panel data, China
    JEL: Q53 Q56 O13 R11 P28 H11
    Date: 2021–12
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2021.31&r=

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