Advanced Search
MyIDEAS: Login to save this paper or follow this series

Happiness as a Driver of Risk-Avoiding Behavior

Contents:

Author Info

  • Jan-Emmanuel De Neve
  • Robert J. B. Goudie
  • Sach Mukherjee
  • Andrew J. Oswald
  • Stephen Wu

Abstract

Most governments try to discourage their citizens from taking extreme risks with their health and lives. Yet, for reasons not understood, many people continue to do so. We suggest a new approach to this longstanding question. First, we show that expected-utility theory predicts that 'happier' people will be less attracted to risky behaviors. Second, using BRFSS data on seatbelt use in a sample of 300,000 Americans, we document evidence strongly consistent with that prediction. Our result is demonstrated with various methodological approaches, including Bayesian model-selection and instrumental-variable estimation (based on unhappiness caused by widowhood). Third, using data on road accidents from the Add Health data set, we find strongly corroborative longitudinal evidence. These results suggest that government policy may need to address the underlying happiness of individuals rather than focus on behavioural symptoms.

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://cep.lse.ac.uk/pubs/download/dp1126.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1126.

as in new window
Length:
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:cep:cepdps:dp1126

Contact details of provider:
Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: subjective well-being; risky behaviors; effects of well-being; rational carelessness;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers, DELTA (Ecole normale supérieure) 2001-17, DELTA (Ecole normale supérieure).
  2. Clark, A.; & Etilé, F.;, 2010. "Happy House: Spousal weight and individual well-being," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 10/10, HEDG, c/o Department of Economics, University of York.
  3. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, INFORMS, vol. 36(6), pages 643-660, June.
  4. Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
  5. Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Alex Rees-Jones, 2010. "Do People Seek to Maximize Happiness? Evidence from New Surveys," NBER Working Papers 16489, National Bureau of Economic Research, Inc.
  6. Hamermesh, Daniel S & Soss, Neal M, 1974. "An Economic Theory of Suicide," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(1), pages 83-98, Jan.-Feb..
  7. David G. Blanchflower & Andrew J. Oswald, 2007. "Hypertension and Happiness across Nations," NBER Working Papers 12934, National Bureau of Economic Research, Inc.
  8. Dohmen Thomas & Falk Armin & Huffman David & Sunde Uwe & Schupp Jürgen & Wagner Gert G., 2009. "Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences," Research Memorandum 039, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  9. Offer, Avner, 2007. "The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199216628, October.
  10. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
  11. Offer, Avner & Pechey, Rachel & Ulijaszek, Stanley, 2010. "Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality," Economics & Human Biology, Elsevier, Elsevier, vol. 8(3), pages 297-308, December.
  12. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
  13. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  14. Jörn-Steffen Pischke, 2011. "Money and Happiness: Evidence from the Industry Wage Structure," NBER Working Papers 17056, National Bureau of Economic Research, Inc.
  15. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, Econometric Society, vol. 47(2), pages 263-91, March.
  16. 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.
  17. Richard E. Lucas & Andrew Clark & Yannis Georgellis & Ed Diener, 2002. "Re-Examining Adaptation and the Setpoint Model of Happiness: Reactions to Changes in Marital Status," DELTA Working Papers, DELTA (Ecole normale supérieure) 2002-08, DELTA (Ecole normale supérieure).
  18. Smith, M. & Kohn, R., . "Nonparametric Regression using Bayesian Variable Selection," Statistics Working Paper _009, Australian Graduate School of Management.
  19. Paul Dolan & Daniel Kahneman, 2008. "Interpretations Of Utility And Their Implications For The Valuation Of Health," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(525), pages 215-234, 01.
  20. Barsky, Robert B, et al, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(2), pages 537-79, May.
  21. Stevenson, Betsey & Wolfers, Justin, 2008. "Happiness Inequality in the United States," IZA Discussion Papers 3624, Institute for the Study of Labor (IZA).
  22. Claeskens,Gerda & Hjort,Nils Lid, 2008. "Model Selection and Model Averaging," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521852258.
  23. Fliessbach, Klaus & Weber, Bernd & Trautner, P. & Dohmen, Thomas J. & Sunde, Uwe & Elger, C. E. & Falk, Armin, 2007. "Social comparison affects reward-related brain activity in the human ventral striatum," Munich Reprints in Economics, University of Munich, Department of Economics 20362, University of Munich, Department of Economics.
  24. Miles S. Kimball, 1991. "Standard Risk Aversion," NBER Technical Working Papers 0099, National Bureau of Economic Research, Inc.
  25. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 67-72, May.
  26. Anderson, Lisa R. & Mellor, Jennifer M., 2008. "Predicting health behaviors with an experimental measure of risk preference," Journal of Health Economics, Elsevier, Elsevier, vol. 27(5), pages 1260-1274, September.
  27. M. Pittau & Roberto Zelli & Andrew Gelman, 2010. "Economic Disparities and Life Satisfaction in European Regions," Social Indicators Research, Springer, Springer, vol. 96(2), pages 339-361, April.
  28. Oswald, Andrew J. & Wu, Stephen, 2010. "Objective Confirmation of Subjective Measures of Human Well-being: Evidence from the USA," IZA Discussion Papers 4695, Institute for the Study of Labor (IZA).
  29. W. Viscusi, 2009. "Valuing risks of death from terrorism and natural disasters," Journal of Risk and Uncertainty, Springer, Springer, vol. 38(3), pages 191-213, June.
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. Abel Brodeur & Sarah Flèche, 2013. "Where the streets have a name: income comparisons in the US," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 51529, London School of Economics and Political Science, LSE Library.
  2. Krause, Annabelle, 2013. "Don’t worry, be happy? Happiness and reemployment," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 96(C), pages 1-20.
  3. Krause, Annabelle, 2012. "Don't Worry, Be Happy? Happiness and Reemployment," IZA Discussion Papers 7107, Institute for the Study of Labor (IZA).

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:cep:cepdps:dp1126. 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: ().

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.