[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eeb/articl/v1y2015i2p2-31.html
   My bibliography  Save this article

Predicting Well-Being in Europe? The Effect of the Financial Crisis

Author

Listed:
  • M. Azhar Hussain

    (Roskilde University)

Abstract
Has the worst financial and economic crisis since the 1930s reduced the subjective well-being function's predictive power? Regression models for happiness are estimated for the three first rounds of the European Social Survey (ESS); 2002, 2004 and 2006. Several explanatory variables are significant with the expected signs and an average determination coefficient around 0.25. Based on these estimated parameters happiness is predicted for the latest three rounds of the ESS; 2008, 2010 and 2012. Happiness is slightly underestimated in both 2008 and 2010, e.g. actual happiness generally is above predicted happiness. Nevertheless, 73% of the predictions in 2008 and 57% of predictions in 2010 were within the margin of error. These correct prediction percentages are not unusually low - rather they are slightly higher than before the crisis. It is surprising that happiness predictions are not adversely affected by the crisis. On the other hand, results are consistent with the adaption hypothesis. The same exercise is conducted applying life satisfaction instead of happiness, but we reject, against expectation, that (more transient) happiness is harder to predict than life satisfaction. Fifteen ESS countries surveyed in each of the six surveys are included in the study.

Suggested Citation

  • M. Azhar Hussain, 2015. "Predicting Well-Being in Europe? The Effect of the Financial Crisis," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 1(2), pages 2-31.
    • Handle: RePEc:eeb:articl:v:1:y:2015:i:2:p:2-31
    as

    Download full text from publisher

    File URL: http://eebej.eu/M-Azhar-Hussain-2015-Predicting-Wellbeing-in-Europe-The-Effect-of-the-Financial-Crisis-Eastern-European-Business-and-Economics-Journal-12-2-31/
    Download Restriction: for print copy of the journal 50 Euro, preview on web - free
    File URL: http://eebej.eu/2015v1n2/2-31.pdf
    Download Restriction: for print copy of the journal 50 Euro, preview on web - free
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stefano Bartolini & Ennio Bilancini & Maurizio Pugno, 2008. "Did the Decline in Social Capital Depress Americans’ Happiness?," Department of Economics University of Siena 540, Department of Economics, University of Siena.
    2. Blanchflower, David G. & Oswald, Andrew J., 2008. "Is well-being U-shaped over the life cycle?," Social Science & Medicine, Elsevier, vol. 66(8), pages 1733-1749, April.
    3. Andrew E. Clark & Sarah Flèche & Claudia Senik, 2012. "The Great Happiness Moderation," SOEPpapers on Multidisciplinary Panel Data Research 468, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Dora Gudmundsdottir, 2013. "The Impact of Economic Crisis on Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1083-1101, February.
    5. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    6. John F. Helliwell & Christopher P. Barrington-Leigh & Anthony Harris & Haifang Huang, 2009. "International Evidence on the Social Context of Well-Being," NBER Working Papers 14720, National Bureau of Economic Research, Inc.
    7. Blanchflower, David G. & Oswald, Andrew J., 2008. "Hypertension and happiness across nations," Journal of Health Economics, Elsevier, vol. 27(2), pages 218-233, March.
    8. Stefano Bartolini & Ennio Bilancini & Francesco Sarracino, 2013. "Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(2), pages 169-191, November.
    9. Leonardo Becchetti & Elena Giachin Ricca & Alessandra Pelloni, 2012. "The Relationship Between Social Leisure and Life Satisfaction: Causality and Policy Implications," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 108(3), pages 453-490, September.
    10. Easterlin, Richard A., 2006. "Life cycle happiness and its sources: Intersections of psychology, economics, and demography," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 463-482, August.
    11. Leonardo Becchetti & Alessandra Pelloni, 2013. "What are we learning from the life satisfaction literature?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 113-155, June.
    12. Easterlin, Richard A., 2009. "Lost in transition: Life satisfaction on the road to capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 130-145, August.
    13. Bruni, Luigino & Stanca, Luca, 2008. "Watching alone: Relational goods, television and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 506-528, March.
    14. Easterlin, Richard A. & Angelescu McVey, Laura & Switek, Maggie & Sawangfa, Onnicha & Zweig, Jacqueline Smith, 2011. "The Happiness-Income Paradox Revisited," IZA Discussion Papers 5799, Institute of Labor Economics (IZA).
    15. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    16. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    17. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    18. Michael Hagerty & Ruut Veenhoven, 2003. "Wealth and Happiness Revisited – Growing National Income Does Go with Greater Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 64(1), pages 1-27, October.
    19. Di Tella, Rafael & MacCulloch, Robert, 2008. "Gross national happiness as an answer to the Easterlin Paradox?," Journal of Development Economics, Elsevier, vol. 86(1), pages 22-42, April.
    20. John Helliwell, 2007. "Well-Being and Social Capital: Does Suicide Pose a Puzzle?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(3), pages 455-496, May.
    21. Caroline Harper & Nicola Jones & Paola Pereznieto & Andy McKay, 2011. "Promoting Children's Well‐being: Policy Lessons from Past and Present Economic Crises," Development Policy Review, Overseas Development Institute, vol. 29, pages 621-641, September.
    22. Ronald Inglehart & Roberto Foa & Eduard Ponarin & Christian Welzel, 2013. "Understanding the Russian malaise: The collapse and recovery of subjective well-being in post-communist Russia," HSE Working papers WP BRP 32/SOC/2013, National Research University Higher School of Economics.
    23. Lim, Chaeyoon & Putnam, Robert David, 2010. "Religion, Social Networks, and Life Satisfaction," Scholarly Articles 11105537, Harvard Kennedy School of Government.
    24. Stefano Bartolini & Ennio Bilancini, 2010. "If not only GDP, what else? Using relational goods to predict the trends of subjective well-being," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(2), pages 199-213, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefano Bartolini & Ennio Bilancini & Francesco Sarracino, 2013. "Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(2), pages 169-191, November.
    2. David G. Blanchflower & Carol L. Graham, 2022. "The Mid-Life Dip in Well-Being: a Critique," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 287-344, May.
    3. Nikolova, Milena, 2016. "Minding the happiness gap: Political institutions and perceived quality of life in transition," European Journal of Political Economy, Elsevier, vol. 45(S), pages 129-148.
    4. Sarracino, Francesco, 2013. "Determinants of subjective well-being in high and low income countries: Do happiness equations differ across countries?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 42(C), pages 51-66.
    5. Piekalkiewicz, Marcin, 2016. "Money, Social Capital and Materialism. Evidence from Happiness Data," EconStor Preprints 130185, ZBW - Leibniz Information Centre for Economics.
    6. Jiayuan Li & John Raine, 2014. "The Time Trend of Life Satisfaction in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(2), pages 409-427, April.
    7. Leonardo Becchetti & Alessandra Pelloni, 2013. "What are we learning from the life satisfaction literature?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 113-155, June.
    8. Mikucka, Malgorzata & Sarracino, Francesco, 2014. "Making economic growth and well-being compatible: the role of trust and income inequality," MPRA Paper 59695, University Library of Munich, Germany.
    9. Bartolini, Stefano & Sarracino, Francesco, 2014. "Happy for how long? How social capital and economic growth relate to happiness over time," Ecological Economics, Elsevier, vol. 108(C), pages 242-256.
    10. Jiayuan Li, 2016. "Why Economic Growth did not Translate into Increased Happiness: Preliminary Results of a Multilevel Modeling of Happiness in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 241-263, August.
    11. Stefano Bartolini & Francesco Sarracino, 2014. "It's not the economy, stupid! How social capital and GDP relate to happiness over time," Papers 1411.2138, arXiv.org.
    12. Hania Wu & Tony Tam, 2015. "Economic Development and Socioeconomic Inequality of Well-Being: A Cross-Sectional Time-Series Analysis of Urban China, 2003–2011," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(2), pages 401-425, November.
    13. Fabio Sabatini & Francesco Sarracino, 2017. "Online Networks and Subjective Well-Being," Kyklos, Wiley Blackwell, vol. 70(3), pages 456-480, August.
    14. Sarracino, Francesco & O'Connor, Kelsey J. & Ono, Hiroshi, 2019. "Making economic growth and well-being compatible: evidence from Japan," MPRA Paper 93010, University Library of Munich, Germany.
    15. Blanchflower, David G & Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    16. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 35-60, March.
    17. Iddisah Sulemana, 2015. "An Empirical Investigation of the Relationship Between Social Capital and Subjective Well-Being in Ghana," Journal of Happiness Studies, Springer, vol. 16(5), pages 1299-1321, October.
    18. Bert Van Landeghem, 2012. "Panel Conditioning and Self-Reported Satisfaction: Evidence from International Panel Data and Repeated Cross-Sections," SOEPpapers on Multidisciplinary Panel Data Research 484, DIW Berlin, The German Socio-Economic Panel (SOEP).
    19. Francesco Sarracino & Małgorzata Mikucka, 2019. "Consume More, Work Longer, and Be Unhappy: Possible Social Roots of Economic Crisis?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 14(1), pages 59-84, March.
    20. Tobias Pfaff & Johannes Hirata, 2013. "Testing the Easterlin Hypothesis with Panel Data: The Dynamic Relationship between Life Satisfaction and Economic Growth in Germany and the UK," SOEPpapers on Multidisciplinary Panel Data Research 554, DIW Berlin, The German Socio-Economic Panel (SOEP).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eeb:articl:v:1:y:2015:i:2:p:2-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerijs (email available below). General contact details of provider: http://eebej.eu .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.