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Partisan Social Happiness

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Author Info
Rafael Di Tella
Robert MacCulloch

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Abstract

We use a new approach to study questions in political economy that relies on data on the subjective well-being of a large sample of people living in the OECD over the period 1975{1992. Controlling for the personal characteristics of the respondents, year and country fixed effects and country-specific time trends, we find that the data describe social happiness functions for left-wing and right-wing individuals where inflation and unemployment enter negatively. We use these functions to test the root assumption of partisan business cycle models. The evidence is consistent with the hypothesis that left-wing individuals care more about unemployment relative to inflation than right-wingers. Interestingly, we find that individuals declare themselves to be happier when the party they support is in power, even after controlling for macroeconomic variables. The effect of politics is large. Finally, we find that these partisan differences cannot be traced back to income differences. That is, it is misleading to assume|as it is done in the previous literature|that the poor (rich) behave similarly to the left (right). For example, inflation and unemployment do not have differential effects across rich and poor and the happiness levels of these two groups are unaffected by the identity of the party in power. Our findings are hard to explain using median voter models but are to be expected in a partisan world. Copyright The Review of Economic Studies Limited, 2005.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-937X.2005.00336.x
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Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 72 (2005)
Issue (Month): 2 (04)
Pages: 367-393
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Handle: RePEc:bla:restud:v:72:y:2005:i:2:p:367-393

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  2. Andrew J. Oswald & Nattavudh Powdthavee, 2006. "Daughters and Left-Wing Voting," IZA Discussion Papers 2103, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics. [Downloadable!]
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  4. Simon Luechinger & Stephan Meier & Alois Stutzer, 2006. "Bureaucratic Rents and Life Satisfaction," IEW - Working Papers iewwp269, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  5. Simon Luechinger & Stephan Meier & Alois Stutzer, 2008. "Why does unemployment hurt the employed?: evidence from the life satisfaction gap between the public and private sectors," Public Policy Discussion Paper 08-1, Federal Reserve Bank of Boston. [Downloadable!]
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  6. Bjørnskov, Christian, 2005. "Political Ideology and Economic Freedom," Working Papers 05-8, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
  7. David G. Blanchflower & Andrew J. Oswald, 2005. "Happiness and the Human Development Index: The Paradox of Australia," IZA Discussion Papers 1601, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Alesina, Alberto F & Di Tella, Rafael & MacCulloch, Robert, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," CEPR Discussion Papers 2877, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Fernando Borraz & Susan Pozo & Máximo Rossi, 2008. "And What About the Family Back Home? International Migration and Happiness," Documentos de Trabajo (working papers) 0308, Department of Economics - dECON. [Downloadable!]
  10. Christian Bjørnskov & Axel Dreher & Justina A. V. Fischer, 2005. "The bigger the better? Evidence of the effect of government size on life satisfaction around the world," Economics working paper series 05/44, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
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  11. Wen-Chun Chang, 2008. "Toward Independence or Unification?," Peace Economics, Peace Science and Public Policy, Berkeley Electronic Press, vol. 13(2), pages 4. [Downloadable!]
  12. Lelkes, Orsolya, 2008. "Happiness over the life cycle: exploring age-specific preferences," MPRA Paper 7302, University Library of Munich, Germany. [Downloadable!]
  13. Christian Bjørnskov & Nabanita Datta Gupta & Peder J. Pedersen, 2005. "What Buys Happiness? Analyzing Trends in Subjective Well-Being in 15 European Countries, 1973-2002," IZA Discussion Papers 1716, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Song, Zheng, 2008. "Persistent Ideology and the Determination of Public Policies over Time," MPRA Paper 10364, University Library of Munich, Germany. [Downloadable!]
  15. Blanchflower, David G. & Lawton, Helen, 2008. "The Impact of the Recent Expansion of the EU on the UK Labour Market," IZA Discussion Papers 3695, Institute for the Study of Labor (IZA). [Downloadable!]
  16. Blanchflower, David G., 2008. "International Evidence on Well-being," IZA Discussion Papers 3354, Institute for the Study of Labor (IZA). [Downloadable!]
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  17. Tomer Blumkin & Volker Grossmann, 2004. "Ideological Polarization, Sticky Information, and Policy Reforms," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  18. Luechinger, Simon & Meier, Stephan & Stutzer, Alois, 2008. "Why Does Unemployment Hurt the Employed? Evidence from the Life Satisfaction Gap between the Public and the Private Sector," IZA Discussion Papers 3385, Institute for the Study of Labor (IZA). [Downloadable!]
  19. Rafael Di Tella & Robert MacCulloch, 2005. "Gross National Happiness as an Answer to the Easterlin Paradox?," Macroeconomics 0504027, EconWPA. [Downloadable!]
  20. Rafael Di Tella & Robert MacCulloch, 2007. "Happiness, Contentment and Other Emotions for Central Banks," NBER Working Papers 13622, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Pamela Kaval, 2006. "The Relationship between Well-Being and Wildfire," Working Papers in Economics 06/14, University of Waikato, Department of Economics. [Downloadable!]
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