Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Wellbeing
AbstractThis paper analyzes the effects of business cycle volatility on measures of subjective well-being, including self-reported happiness and life satisfaction. I find robust evidence that high inflation and, to a greater extent, unemployment lower perceived well-being. Greater macroeconomic volatility also undermines well-being. These effects are moderate but important: eliminating unemployment volatility would raise well-being by an amount roughly equal to that from lowering the average level of unemployment by a quarter of a percentage point. The effects of inflation volatility on well-being are less easy to detect and are likely smaller.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9619.
Date of creation: Apr 2003
Date of revision:
Publication status: published as Wolfers, Justin. "Is Business Cycle Volatility Costly? Evidence From Surveys Of Subjective Well-Being," International Finance, 2003, v6(1,Apr), 1-26.
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Other versions of this item:
- Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," International Finance, Wiley Blackwell, vol. 6(1), pages 1-26, Spring.
- Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," Research Papers 1751r, Stanford University, Graduate School of Business.
- D60 - Microeconomics - - Welfare Economics - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-13 (All new papers)
- NEP-CBE-2003-04-13 (Cognitive & Behavioural Economics)
- NEP-DGE-2003-04-13 (Dynamic General Equilibrium)
- NEP-MAC-2003-04-13 (Macroeconomics)
- NEP-RMG-2003-04-13 (Risk Management)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Economics of Happiness (Bernanke Commencement address)
by Barry Ritholtz in the big picture on 2010-05-09 14:30:25
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