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on Economics of Happiness |
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Issue of 2024–12–02
seven papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Heinz Welsch (University of Oldenburg, Department of Economics) |
| Abstract: | Easterlin and O’Connor (PNAS 2022) have investigated which economic, social, political, and ecological factors explain long-run (36-year) changes in European countries’ happiness (life satisfaction). Considering six potential predictors advanced in the pertinent literature, they found only rising welfare state generosity to be significantly associated with rising happiness. Noticing a salient characteristic of the data used – a strong and significant association between happiness trends and initial happiness levels – I modify this analysis by controlling for initial happiness levels and by considering long-run relative changes in addition to absolute changes in happiness. Both modifications respond to the circumstance that happiness scales are bounded so that it is hard for happiness to increase – especially in absolute terms – if it is already high. I find the inclusion of initial happiness to greatly increase the explanatory power (R2) of the regression models considered and, as a consequence, to raise the precision of coefficient estimates. Due to increased precision, not only welfare state generosity but also growth in per-capita GDP is found to significantly predict both absolute and relative long-run changes in countries’ happiness, whereas other candidate explanatory variables remain insignificant. Welfare state generosity and GDP growth are not only statistically, but also economically significant. |
| Keywords: | happiness; life satisfaction; welfare policy; economic growth; Easterlin Paradox |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:old:dpaper:447 |
| By: | Ekaterina Oparina; Andrew E. Clark; Richard Layard |
| Abstract: | We use Gallup World Poll data from over 150 countries from 2009-2019 at both the individual and country levels to revisit the relationship between income and subjective wellbeing. Our inspiration is the paradox first proposed by Easterlin (1974), according to which higher incomes are associated with greater happiness in cross-sections yet increases in a country's GDP per head do not increase its average wellbeing. In our analysis subjective wellbeing (or happiness) is measured by the Cantril ladder on a 0-10 scale. Across individuals, other things equal, one unit of log income raises subjective wellbeing by 0.4 points. In other words, doubling income raises wellbeing by 0.3 points out of 10. Across countries, a crude regression of log income on per capita income gives a higher coefficient of 0.6. But, once social variables like health and social support are introduced, the picture changes. In rich countries, income no longer has a significant effect, either in country cross-sections or in time series: higher income only matters due to its correlation with the social variables. For low-income countries the result is also clear cut - income raises happiness in both cross-section and time series, whether the social variables are controlled for or not. For middle income countries the result is mixed. |
| Keywords: | subjective wellbeing, income, GDP, Easterlin paradox, public goods |
| Date: | 2024–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2048 |
| By: | Kuriko OTSUKA (Mitsui Sumitomo Insurance Company); Keita OIKAWA (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | The economics of happiness explores self-reported happiness or subjective wellbeing (SWB) by integrating economic methods with psychological approaches and utilising large-scale surveys across diverse countries. Originating in Easterlin’s pivotal work in 1974, this field examines the intricate link between factors of life events and environments and SWB. It reveals that material attainments (e.g. income) do not increase people’s SWB in the long run, whereas non-material attainments enhance SWB over time. In the context of urban development, non-material factors positively affecting SWB include active participation in communities and self-determination in one’s life. In recent years, well-being has been a key measure for smart city initiatives, including the Association of Southeast Asian Nations (ASEAN) Smart Cities Network. To enhance people’s SWB through active community participation and decision-making in community services and activities, we propose that ASEAN promote a people-centric smart city (PCSC) model. This model defines a city that engages and includes citizens at every phase of city planning to ensure inclusivity. To implement a PCSC effectively, a comprehensive approach is essential, involving surveying well-being elements, clarifying community goals, enhancing digital literacy, setting rules and key performance indicators, and engaging citizens proactively. Collaboration amongst various sectors is crucial. A PCSC is not confined to online platforms; face-to-face meetings promote inclusivity and prevent exclusivity. |
| Keywords: | Economics of happiness; Subjective well-being; People-centric smart city; ASEAN |
| JEL: | I3 R5 |
| Date: | 2024–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-22 |
| By: | David G. Blanchflower; Alex Bryson |
| Abstract: | We examine the mental wellbeing of the young in 18 Latin American countries using data from five cross-country comparative studies plus cross-sectional and quarterly time series data for a single country, Mexico. We examine whether there has been a decline in youth mental health and, if so, whether it has removed the U-shape in happiness and the hump-shape in unhappiness in Latin America as it has done in the United States and elsewhere. In the Global Minds data, the mental health of the young is poorer than that of older age groups. The Enbiare surveys for Mexico indicate that declining wellbeing of the young has changed the age profile of (un)happiness in that country. The OECD’s Programme for International Student Assessment (PISA) data show a decline in the mental health of school children in Latin America, and that mental ill-health is more pronounced among those who have early access to, or spend excessive time spent on, digital devices. However, in both the Gallup World Poll and the Latinobarometers the young remain happier than older age groups, even though the wellbeing of the young has declined in some Latin American countries. We speculate as to why there may be differences in trends across surveys. |
| JEL: | I31 J13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33111 |
| By: | Eva Sierminska; Sylwia Radomska |
| Abstract: | We examine the economic well-being of single parents in a cross-national perspective and compare their wealth levels to that of other family types. We find similarities and differences in economic well-being as measured by wealth, across seven countries that represent various welfare systems. In most countries, single parents have less than 50% of wealth in the hands of their coupled counterparts. When studying single parents’ economic well-being it is important to account for their life trajectories before becoming a single parent. This paper focuses on this notion. Our results suggest that, to be better off, single- parents would need to be homeowners not living in the United States, even if they are highly educated located at the bottom of the wealth distribution. Since single parents are often at the receiving end of social benefits, means-tested (not universal) benefits may hamper their wealth accumulation patterns. We zoom into this process. |
| JEL: | D31 J12 J16 R21 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:lis:lwswps:47 |
| By: | Mohebbian, Mana |
| Abstract: | This report investigates the feasibility of developing a holistic indicator to assess and communicate the social sustainability and quality of life in Vancouver. Despite the availability of various specific metrics, there is a noted absence of a comprehensive framework that integrates these metrics to provide a singular, actionable view of the city's progress towards its social sustainability goals. The City of Vancouver currently employs 45 population-level indicators under its Healthy City Strategy, demonstrating the city's commitment to transparent and data-driven governance. However, these indicators, while effective individually, do not collectively provide a complete picture of the city's overall health across various dimensions such as public health, housing, education, and environmental sustainability. The aim of this research was to identify a holistic indicator that encompasses multiple dimensions of social sustainability to simplify assessments and improve strategic planning. Through a desktop review of 70 existing indicators and consultations with experts, two models were identified as particularly promising: the Greater London Authority's (GLA) Wellbeing and Sustainability Measure, and the City of Calgary's Equity Index (CEI). These models offer robust frameworks that prioritize equity, accessibility, and stakeholder involvement, aligning closely with Vancouver's urban development goals. This work highlights the need for an overarching metric that reflects the interdependencies among various domains, ensuring that progress in one area does not undermine another. By leveraging insights from this research, Vancouver can enhance its policy implementation and community engagement, moving closer to achieving a balanced and sustainable urban environment. The proposed holistic indicator will also support the city in benchmarking against other urban centers and refining its strategic initiatives based on quantifiable metrics. |
| Date: | 2024–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:dmqbr |
| By: | Andrea Fazio (Department of Economics and Social Sciences, Marche Polytechnic University, Ancona, Italy. GLO, Essen, Germany); Tommaso Reggiani (Cardiff Business School, Cardiff University, Cardiff, United Kingdom; Masaryk University, MUEEL lab, Brno, Czechia; IZA, Bonn, Germany); Paolo Santori (Department of Philosophy, Tilburg University, The Netherlands) |
| Abstract: | This paper empirically tests Max Weber’s thesis on how religious narratives, particularly the Protestant Ethic, influence attitudes toward wealth redistribution. Weber suggested that the Protestant Reformation, led to the belief that economic success was a sign of divine favor, legitimizing wealth inequality. Using a variation of the dictator game with "blessed" framing, we measure how participants’ redistribution behaviors change when primed with this narrative. Our results show that low-income Protestants exposed to the "blessed" narrative are less likely to redistribute wealth compared to Catholics, supporting Weber’s idea that Protestants justify inequality through divine providence. Furthermore, a narrative analysis reveals that Protestants interpret “blessing” as divine election, while Catholics focus more on well-being. These findings suggest that religious narratives significantly shape economic behaviors and preferences for redistribution, providing empirical support for Weber’s thesis. |
| Keywords: | dictator game; Max Weber; pro-social behaviour; redistribution |
| JEL: | J14 J15 Z12 Z1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:mub:wpaper:2024-06 |