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on Economics of Happiness |
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Issue of 2022‒10‒03
two papers chosen by |
| By: | Claus Thustrup Kreiner (University of Copenhagen, CEBI, CESifo, and CEPR); Isabel Skak Olufsen (University of Copenhagen and CEBI) |
| Abstract: | This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in wellbeing already in early adulthood, where differences in economic outcomes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach. |
| Keywords: | Subjective well-being, inequality, intergenerational mobility |
| JEL: | I31 J62 D30 D63 |
| Date: | 2022–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2210&r= |
| By: | Guerini, Mattia; Vanni, Fabio; Napoletano, Mauro |
| Abstract: | Is aggregate income enough to summarize the well-being of a society? We address this longstanding question by exploiting a novel approach to study the relationship between gross domestic product (GDP) and a set of economic, social and environmental indicators for nine developed economies. By employing dimensionality reduction techniques, we quantify the share of variability stemming from a large set of different indicators that can be compressed into a univariate index. We also evaluate how well this variability can be explained if the univariate index is GDP. Our results indicate that univariate measures, and GDP among them, are doomed to fail in accounting for the variability of well-being indicators. Even if GDP would be the best linear univariate index, its quality in synthesizing information from indicators belonging to different domains is poor. Our approach provides additional support for policy makers interested in measuring the trade offs between income and other relevant socio-economic and ecological dimensions. Furthermore, it adds new quantitative evidence to the already vast literature criticizing GDP as the most prominent measure of well-being. |
| Keywords: | Environmental Economics and Policy, Labor and Human Capital, Political Economy, Production Economics |
| Date: | 2022–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:324043&r= |