nep-hap New Economics Papers
on Economics of Happiness
Issue of 2022‒05‒09
four papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Instant Loans Can Lift Subjective Well-Being: A Randomized Evaluation of Digital Credit in Nigeria By Daniel Bj\"orkegren; Joshua Blumenstock; Omowunmi Folajimi-Senjobi; Jacqueline Mauro; Suraj R. Nair
  2. People versus Machines: The Impact of Being in an Automatable Job on Australian Worker's Mental Health and Life Satisfaction By Lordan, Grace; Stringer, Eliza-Jane
  3. How Does Matching Uncertainty Affect Marital Surplus? Theory and Evidence from China By Li Han; Xinzheng Shi; Ming-ang Zhang
  4. WELLBYs, cost-benefit analyses and the Easterlin Discount By Frijters, Paul

  1. By: Daniel Bj\"orkegren; Joshua Blumenstock; Omowunmi Folajimi-Senjobi; Jacqueline Mauro; Suraj R. Nair
    Abstract: Digital loans have exploded in popularity across low and middle income countries, providing short term, high interest credit via mobile phones. This paper reports the results of a randomized evaluation of a digital loan product in Nigeria. Being randomly approved for digital credit (irrespective of credit score) substantially increases subjective well-being after an average of three months. For those who are approved, being randomly offered larger loans has an insignificant effect. Neither treatment significantly impacts other measures of welfare. We rule out large short-term impacts either positive or negative: on income and expenditures, resilience, and women's economic empowerment.
    Date: 2022–02
  2. By: Lordan, Grace (London School of Economics); Stringer, Eliza-Jane (London School of Economics)
    Abstract: This study explores the effect on mental health and life satisfaction of working in an automatable job. We utilise an Australian panel dataset (HILDA), and estimate models that include individual fixed effects, to estimate the association between automatable work and proxies of wellbeing. Overall, we find evidence that automatable work has a small, detrimental impact on the mental health and life satisfaction of workers within some industries, particularly those with higher levels of job automation risk, such as manufacturing. Furthermore, we find no strong trends to suggest that any particular demographic group is disproportionately impacted across industries. These findings are robust to a variety of specifications. We also find evidence of adaptation to these effects after one-year tenure on the job, indicating a limited role for firm policy.
    Keywords: automation, life satisfaction, mental health, job security
    JEL: I10 J20
    Date: 2022–03
  3. By: Li Han (Division of Social Science, The Hong Kong University of Science and Technology); Xinzheng Shi (Tsinghua University); Ming-ang Zhang (Central University of Finance and Economics)
    Abstract: Information quality affects matching and marital outcomes. We show in a simple two-dimensional matching model that a noisier cue for one trait leads to a shift in sorting tradeoff toward the other, lowers average welfare but the impact is asymmetric. To test the predictions, we explore the repeal of mandatory premarital health examinations in China. The repeal, increasing health cue noise, is found to have reduced postmarital subjective well-being mainly through a reduction in child health associated with decreased sorting by health. The deterioration was particularly strong for women and the poor, suggesting entrenched inequality by gender and wealth.
    Keywords: Premarital Health Examination, Subjective Well-being, Assortative Matching, Sorting Tradeoff, Inequality
    JEL: J12 J13 I18
    Date: 2022–03
  4. By: Frijters, Paul
    Abstract: The current practise of cost-benefit analysis in Western countries consists of a collection of various incompatible ideas and methodologies to obtain replicable numbers for the costs and benefits of major public spending plans. This paper describes the main elements of the dominant methodology, which combines consumer and producer surplus, price-taking, government-inputs-as-outputs, hedonic pricing of externalities, and the issue-specific use of partial or general equilibrium thinking. The paper then discusses how that methodology can be augmented and partially replaced by looking at how prospective policies would change the total number of WELLBYs (life satisfaction-adjusted years of life) of the population. The ability of the WELLBY methodology to address complex externalities is illustrated by the Easterlin Discount, which is a proposed reduction factor of 75% on all estimates of private consumption benefits to offset the envy caused in others.
    Keywords: consumer surplus; cost-effectiveness; Easterlin Discount; public advocacy; wellbeing
    JEL: N0 J1
    Date: 2021–03–09

This nep-hap issue is ©2022 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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