A recent paper by Bond & Lang (2018) forcefully argues that the results of most happiness research are reversible. If they are right, empirical happiness research is in crisis. In this paper, we make four related contributions. First, we show that B&L’s reversal conditions imply that respondents answer happiness questions in a manner that is implausible and which is contradicted by previous empirical research. Second, we show that reversals are driven by effect heterogeneities across the distribution of reported happiness. Third, we give a simple procedure by which such heterogeneities can be detected and provide conditions under which OLS coefficients can be reversed by appropriately relabeling response categories. These conditions turn out to be similar to those given by Schröder & Yitzhaki (2017). Fourth, using GSOEP data, we empirically assess the plausibility of Bond & Lang’s reversal conditions and check whether coefficients from OLS and fixed-effects models can be reversed. Our analysis focuses on household income, unemployment, childbirth, sickness, and marriage. Bond & Lang’s reversal conditions turn out to be implausible for all these variables. Moreover, when using a full set of controls, no reversals of coefficients of the OLS and FE models are possible.
Human feelings measured in integers ( my happiness is an 8 out of 10 , my pain 2 out of 6 ) have no objective scientific basis. They are “made-up” numbers on a scale that does not exist. Yet such data are extensively collected—despite criticism from, especially, economists—by governments and international organizations. We examine this paradox. We draw upon longitudinal information on the feelings and decisions of tens of thousands of randomly sampled citizens followed through time over four decades in three countries ( n = 700,000 approximately). First, we show that a single feelings integer has greater predictive power than does a combined set of economic and social variables. Second, there is a clear inverse relationship between feelings integers and subsequent get-me-out-of-here actions (in the domain of neighborhoods, partners, jobs, and hospital visits). Third, this feelings-to-actions relationship takes a generic form, is consistently replicable, and is fairly close to linear in structure. Therefore, it seems that human beings can successfully operationalize an integer scale for feelings even though there is no true scale. How individuals are able to achieve this is not currently known. The implied scientific puzzle—an inherently cross-disciplinary one—demands attention.
Richer people are happier than poorer people, but when a country becomes richer over time, its people do not become happier. This seemingly contradictory pair of findings of Richard Easterlin has become famous as the Easterlin Paradox. However, it was met with counterevidence. To shed more light on this controversy, we distinguish between five different versions of the paradox. These versions apply to either groups of countries or individual countries, and to either the long or the medium term. We argue that the long term is most appropriate for testing the paradox, and that tests of the paradox should always control for an autonomous time trend.Unfortunately, this requirement renders the long-term version of the paradox for individual countries untestable.We test all other versions of the paradox with Eurobarometer data from 27 European countries. We do so by estimating country-panel equations for mean life satisfaction that include trend and cyclical components of per capita GDP as regressors. When testing variants of the paradox that apply to groups of countries, we find a clear and robust confirmation of the long-and medium-term versions of the paradox for a group of nine Western and Northern European countries. Moreover, we obtain a non-robust rejection of the medium-term variant of the paradox for a set of eleven Eastern European countries. On the level of individual countries, the medium-term variant of the paradox clearly holds for the nine Western and Northern European countries, but is consistently rejected for Greece, Ireland, Italy, and Spain. In the case of the Eastern European countries, the medium-term version of the paradox is rejected for Bulgaria, Lithuania, and Poland. As the Western and Northern European countries have a high per capita GDP as compared to that of Southern and Eastern European countries, our results are in line with the finding of Proto and Rustichini (2013), who find a non-monotonic relation between per capita GDP and life satisfaction over time which is positive for poorer countries, but flat (or negative) for richer countries.JEL codes: I31, I32, O11
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