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on Economics of Happiness |
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Issue of 2023‒02‒13
six papers chosen by |
| By: | El Mehdi El Herradi (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Aurelien Leroy (UB - Université de Bordeaux, BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper assesses whether monetary policy announcements have an impact on households' (subjective) well-being by analysing life satisfaction on the days before and after monetary surprises in Germany. To do so, we use individual-level information on life satisfaction from the German Socio-Economic Panel (SOEP) survey and identify the day on which each answer is submitted to the survey. We also exploit the Euro Area Monetary Policy event study Database (EA-MPD) to obtain daily-level information on European Central Bank (ECB) monetary surprises. Our results show that life satisfaction is significantly affected by monetary policy surprises: tightening surprises decrease life satisfaction, while easing surprises increase it. |
| Keywords: | Monetary policy, Subjective Well-Being, Survey data, European Central Bank |
| Date: | 2022–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03897994&r=hap |
| By: | Oparina, Ekaterina; Kaiser, Caspar; Gentile, Niccoló; Tkatchenko, Alexandre; Clark, Andrew E.; De Neve, Jan-Emmanuel; D'Ambrosio, Conchita |
| Abstract: | There is a vast literature on the determinants of subjective wellbeing. International organisations and statistical offices are now collecting such survey data at scale. However, standard regression models explain surprisingly little of the variation in wellbeing, limiting our ability to predict it. In response, we here assess the potential of Machine Learning (ML) to help us better understand wellbeing. We analyse wellbeing data on over a million respondents from Germany, the UK, and the United States. In terms of predictive power, our ML approaches perform better than traditional models. Although the size of the improvement is small in absolute terms, it is substantial when compared to that of key variables like health. We moreover find that drastically expanding the set of explanatory variables doubles the predictive power of both OLS and the ML approaches on unseen data. The variables identified as important by our ML algorithms - i.e. material conditions, health, and meaningful social relations - are similar to those that have already been identified in the literature. In that sense, our data-driven ML results validate the findings from conventional approaches. |
| Keywords: | subjective wellbeing; prediction methods; machine learning |
| JEL: | C63 C53 I31 |
| Date: | 2022–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117955&r=hap |
| By: | Clark, Andrew E.; D'Ambrosio, Conchita; Gentile, Niccoló; Tkatchenko, Alexandre |
| Abstract: | Machine Learning (ML) methods are increasingly being used across a variety of fields and have led to the discovery of intricate relationships between variables. We here apply ML methods to predict and interpret life satisfaction using data from the UK British Cohort Study. We discuss the application of first Penalized Linear Models and then one non-linear method, Random Forests. We present two key model-agnostic interpretative tools for the latter method: Permutation Importance and Shapley Values. With a parsimonious set of explanatory variables, neither Penalized Linear Models nor Random Forests produce major improvements over the standard Non-penalized Linear Model. However, once we consider a richer set of controls these methods do produce a non-negligible improvement in predictive accuracy. Although marital status, and emotional health continue to be the most important predictors of life satisfaction, as in the existing literature, gender becomes insignificant in the non-linear analysis. |
| Keywords: | life satisfaction; well-being; machine learning; British cohort study |
| JEL: | I31 C63 |
| Date: | 2022–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117887&r=hap |
| By: | Prati, Alberto |
| Abstract: | In terms of well-being, how costly is inflation? To answer this question, empirical evaluations have typically studied average inflation rates at the national level, thus disregarding the role of inflation inequalities within a country. In this paper, we relax the assumptions that heterogeneous consumers face homogeneous inflation rates, and study the correlation between price changes and self-reported satisfaction with living standards. We use newly available data from France, and adopt two approaches. First, we focus on individually perceived inflation and use the internationally harmonized Opinion Price Index as a proxy for experienced inflation. Variations in perceived inflation help predict wellbeing differences among consumers, even when controlling for relevant socio-demographic factors, personality traits and common method variance. We estimate their marginal impact to be higher than equivalent variations in nominal income. Second, we compare groups of consumers over time, and find that changes in the price of a good disproportionately affect the relative well-being of those who consume it. The study shows that the well-being cost of the inflation crisis would be underestimated if looking at aggregate figures only. |
| Keywords: | inflation; inequality; heterogeneous inflation; subjective well-being; standard of living; perceived inflation; opinion price index |
| JEL: | E31 I31 D63 |
| Date: | 2022–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117984&r=hap |
| By: | Nabeel, Rao |
| Abstract: | Business and investment in any area requires the provision of an appropriate and secure institutional environment. One of the factors that helps to expand businesses and increase corporate profits is the right business environment. Avoiding complicated administrative bureaucracy, lending and credit, proper international trade, and the ease of obtaining the necessary permits will be helpful in this regard. On the other hand, businesses can perform better in a happy and stress-free environment. Happiness is an emotional state characterized by feelings of joy, satisfaction, contentment, and fulfillment. While happiness has many different definitions, it is often described as involving positive emotions and life satisfaction. The purpose of the present study is to investigate the relationship between the business environment and happiness indicators with corporate profitability. For this purpose, 175 top companies in the world from 2013 to 2018 that were profitable among the top 500 companies each year were selected as the statistical population. World Happiness annual report, Doing Business annual reports, and Fortune site were used to collect the data. Also the data analysis was done according to the panel data method using Stata software. The results shows that in general, there is a positive relationship between business environment and happiness indicators corporate profitability. |
| Date: | 2023–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:zf9ar&r=hap |
| By: | Marc Fleurbaey (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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); Gregory Ponthiere (UCL - Université Catholique de Louvain = Catholic University of Louvain) |
| Abstract: | We study the measurement of well-being when individuals have heterogeneous preferences, including dierent conceptions of a life worth living. When individuals dier in the conception of a life worth living, the equivalent income can regard an individual whose life is not worth living as being better o than an individual whose life is worth living. In order to avoid this paradoxical result, we reexamine the ethical foundations of well-being measures in such a way as to take into account heterogeneity in the conception of a life worth living. We derive, from simple axioms, an alternative measure of well-being, which is an equivalent income net of the income threshold making lifetime neutral. That new well-being index always ranks an individual whose life is not worth living as worse-o than an individual with a life worth living. |
| Keywords: | Well-being measurement equivalent income lifetime value of life. JEL classication codes: I31 J17, Well-being, measurement, equivalent income, lifetime, value of life. |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-03907520&r=hap |