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on Economics of Happiness |
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Issue of 2025–10–06
two papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Anqi Chen; Gal Wettstein |
| Abstract: | The brief’s key findings are:(1)While financial readiness measures suggest many could fall short in retirement, most retirees say they are satisfied with their lives.(2)To explore this disconnect, the analysis reviews existing measures of objective and subjective well-being across many datasets.(3)The results show that the objective measures – such as health and income – are generally poor predictors of reported satisfaction. (4)This finding suggests that survey responses on satisfaction provide little help to policymakers concerned with financial security.(5)Thus, new ways to capture well-being could focus on whether retirees need to cut spending and how they respond to emergencies and expense shocks. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:crr:issbrf:ib2025-6 |
| By: | Leila Gautham; Clemens Hetschko; Peter Howley |
| Abstract: | We demonstrate that higher income enhances the enjoyment individuals derive from leisure. This effect cannot be explained by diminishing marginal utility of leisure time or systematic differences in leisure activities across income groups. Instead, we show that this is largely attributable to cognitive stress – low income constrains the mental bandwidth necessary to enjoy leisure. These findings challenge the view that more leisure time offsets income inequalities. While higher-income individuals have less leisure time available, the leisure they do engage in provides them with greater utility. These findings also have important implications for how we model labour supply. Wage increases may not just increase the marginal cost of leisure, but also enhance the utility it provides. Finally, our research speaks to debates on the role that money plays in happiness. Our findings suggest that the utility-enhancing effect of income is largely due to the role income plays in buying ‘restful’ leisure. |
| Keywords: | leisure, consumption, inequality, emotional wellbeing |
| JEL: | D63 I3 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12169 |