Happiness Flashcards
what is cardinalism
implies an objective measure of utility,
utility can be measured, allowing for interpersonal comparison
how is utility measured in classical economic theory
ordinalism: utility determined by choices if I choose A to B I rank u( A) > u(B),
cannot say anything about absolute values
what is the well-being function
ri = h(u(yi,zi)) + ei,
ei: individual specific error term,
z: demographic characteristics,
y: socioeconomic determinants
what is ordinalism
utility determined by choices (order of preferences),
cannot do interpersonal comparison
what is the hedonic wellbeing way of measuring subjective wellbeing (SWB)
taken all together, how would you say things are these days-would you say you are very happy, pretty happy , or not too happy?
Imagine a ladder with steps numbered zero at bottom to 10 at the top. The top represents the best possible life for you and the bottom represents the worst possible life. On which step of the ladder would you say you personally feel you stand at this time? Which method of measuring subjective wellbeing is this?
evaluative wellbeing
all things considered, how satisfied are you with your life as a whole these days? (1 Dissatisfied to 10 Satisfied) Which method of measuring subjective wellbeing is this?
hedonic and evaluative
what seems to be the case about the relationship between GDP and happiness
happiness grow with GDP only when a country is poor
personal income relationship with happiness
personal income is generally positively correlated with SWB
what is Eugenio’s paper
A reassessment of the relationship between GDP and life satisfaction (Proto and Rustichini, 2013)
what did Proto and Rustichini (2013) introduce
a country-specific effect, to control for time-invariant country-specific unobservable variables (ie culture, climate, genes…)
what else did Proto and Rutichini (2013) do
aggregate countries based on level of per capita GDP, partition all individual observations into quantiles,
this doesn’t impose a particular functional form on the econometric model
conclusions of the paper on the relationship between GDP and life satisfaction
Proto and Rustichini 2013,
most of variation in life satisfaction due to GDP is explained by effect in countries with per capita GDP below $10,000,
countries with GDP per capita over $20,000 see a much less obvious link between GDP and happiness,
perhaps because relative income starts to matter
what is the thing that one does not adapt to
unemployment
what is setting of experiment on happiness and productivity
Oswald, Proto and Sgroi 2009).
Are happier people more productive,
showed treated group a comedy clip and made both groups complete 2 digit substitution problems where they are paid per task completed
