Advanced Search
MyIDEAS: Login to save this article or follow this journal

An examination of the dynamics of well-being and life events using vector autoregressions

Contents:

Author Info

  • Binder, Martin
  • Coad, Alex

Abstract

We use a panel vector autoregressions model to examine the coevolution of changes in mental well-being and changes in income, health, marital status and employment status for the British Household Panel Survey (BHPS) data set. This technique allows us to simultaneously analyze the impact of the aforementioned factors on each other. We find that increases in well-being are associated with subsequent increases in income, marriage, employment, and health variables, while increases in the these life-domain variables (except health) tend to be followed by decreases in well-being in subsequent periods, suggesting adaptation dynamics in all domains. In addition to the robust observation that well-being is associated with subsequent longer-term improvements in health status, we observe that health improvements themselves have a long-lasting positive contribution to employment status. Employment status, in turn, has lasting positive effects on income growth. Although well-being per se may be a short-lived phenomenon, our results suggest that it may have longer-term effects through these particular channels. These findings are quite robust to different model specifications.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V8F-50F3PD1-1/2/060c631c12b5dad6f97805650ac2f824
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 76 (2010)
Issue (Month): 2 (November)
Pages: 352-371

as in new window
Handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:352-371

Contact details of provider:
Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Mental well-being Happiness dynamics Vector autoregressions Subjective well-being BHPS;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  2. Gary Marks & Nicole Fleming, 1999. "Influences and Consequences of Well-being Among Australian Young People: 1980–1995," Social Indicators Research, Springer, vol. 46(3), pages 301-323, March.
  3. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
  4. Richard Lucas & Andrew Clark, 2006. "Do People Really Adapt To Marriage?," Journal of Happiness Studies, Springer, vol. 7(4), pages 405-426, November.
  5. Johnston, David W. & Propper, Carol & Shields, Michael A., 2009. "Comparing subjective and objective measures of health: Evidence from hypertension for the income/health gradient," Journal of Health Economics, Elsevier, vol. 28(3), pages 540-552, May.
  6. Stutzer, Alois & Frey, Bruno S., 2006. "Does marriage make people happy, or do happy people get married?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 326-347, April.
  7. Leonardo Becchetti & Alessandra Pelloni & Fiammetta Rossetti, 2008. "Relational Goods, Sociability, and Happiness," Kyklos, Wiley Blackwell, vol. 61(3), pages 343-363, 08.
  8. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  9. Kate Antonovics & Robert Town, 2004. "Are All the Good Men Married? Uncovering the Sources of the Marital Wage Premium," American Economic Review, American Economic Association, vol. 94(2), pages 317-321, May.
  10. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  11. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 89-109, May.
  12. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
  13. Shiv, Baba & Huber, Joel, 2000. " The Impact of Anticipating Satisfaction on Consumer Choice," Journal of Consumer Research, University of Chicago Press, vol. 27(2), pages 202-16, September.
  14. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 513-537.
  15. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
  16. Jeffrey S. Gray, 1997. "The Fall in Men's Return to Marriage: Declining Productivity Effects or Changing Selection?," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 481-504.
  17. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
  18. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  19. Pamela Smock & Wendy Manning, 1997. "Cohabiting partners’ economic circumstances and marriage," Demography, Springer, vol. 34(3), pages 331-341, August.
  20. Yuanreng Hu & Noreen Goldman, 1990. "Mortality Differentials by Marital Status: An International Comparison," Demography, Springer, vol. 27(2), pages 233-250, May.
  21. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
  22. Luigino Bruni & Luca Stanca, 2005. "Watching alone: Relational Goods, Television and Happiness," Working Papers 90, University of Milano-Bicocca, Department of Economics, revised Jun 2005.
  23. Santarelli, Enrico & Vivarelli, Marco, 2006. "Entrepreneurship and the Process of Firms’ Entry, Survival and Growth," IZA Discussion Papers 2475, Institute for the Study of Labor (IZA).
  24. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
  25. Blackburn, McKinley & Korenman, Sanders, 1994. "The Declining Marital-Status Earnings Differential," Journal of Population Economics, Springer, vol. 7(3), pages 247-70, July.
  26. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  27. Gardner, Jonathan & Oswald, Andrew, 2004. "How is mortality affected by money, marriage, and stress?," Journal of Health Economics, Elsevier, vol. 23(6), pages 1181-1207, November.
  28. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Martin Binder, 2013. "Innovativeness and Subjective Well-Being," Social Indicators Research, Springer, vol. 111(2), pages 561-578, April.
  2. Binder, Martin & Coad, Alex, 2013. "“I'm afraid I have bad news for you…” Estimating the impact of different health impairments on subjective well-being," Social Science & Medicine, Elsevier, vol. 87(C), pages 155-167.
  3. Martin Binder & Leonhard K. Lades, 2014. "Autonomy-enhancing Paternalism," Economics Working Paper Archive wp_800, Levy Economics Institute.
  4. Molnár, György & Kapitány, Zsuzsa, 2014. "Miért elégedetlenek annyira a magyarok az életükkel?. A szubjektív jóllétet befolyásoló tényezők mikroszintű összehasonlító elemzése magyar és osztrák adatokon
    [Why are Hungarians
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 637-671.
  5. Martin Binder & Alex Coad, 2010. "Life satisfaction and self-employment: A matching approach," Papers on Economics and Evolution 2010-20, Philipps University Marburg, Department of Geography.
  6. Alex Coad & Martin Binder, 2013. "Causal linkages between work and life satisfaction and their determinants in a structural VAR approach," Papers on Economics and Evolution 2013-07, Philipps University Marburg, Department of Geography.
  7. Aguilar, Alexandra Cortés & García Muñoz, Teresa M. & Moro-Egido, Ana I., 2013. "Heterogeneous self-employment and satisfaction in Latin America," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 44-61.
  8. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of different types of subjective well-being," MPRA Paper 48292, University Library of Munich, Germany.
  9. André Hajek, 2013. "Endogeneity in the Relation between Poverty, Wealth and Life Satisfaction," SOEPpapers on Multidisciplinary Panel Data Research 604, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Cortés Aguilar Alexandra & Teresa Garcia-Muñoz & Ana I. Moro Egido, 2013. "Heterogeneous Self-employment and Subjective Well-Being. Evidence from Latin America," ThE Papers 13/05, Department of Economic Theory and Economic History of the University of Granada..
  11. Martin Binder & Felix Ward, 2011. "The Structure of Happiness: A Vector Autoregressive Approach," Papers on Economics and Evolution 2011-08, Philipps University Marburg, Department of Geography.
  12. Martin Binder & Tom Broekel, 2012. "Happiness No Matter the Cost? An Examination on How Efficiently Individuals Reach Their Happiness Levels," Journal of Happiness Studies, Springer, vol. 13(4), pages 621-645, August.
  13. Martin Binder & Alex Coad, 2011. ""I'm afraid I have bad news for you . . ." Estimating the impact of different health impairments on subjective well-being," Papers on Economics and Evolution 2011-15, Philipps University Marburg, Department of Geography.
  14. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of happiness and life evaluation," MPRA Paper 50442, University Library of Munich, Germany.
  15. Binder, Martin & Freytag, Andreas, 2013. "Volunteering, subjective well-being and public policy," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 97-119.
  16. Binder, Martin & Coad, Alex, 2011. "From Average Joe's happiness to Miserable Jane and Cheerful John: using quantile regressions to analyze the full subjective well-being distribution," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 275-290, August.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:352-371. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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