Is Happiness Infectious?

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Is Happiness Infectious?

Author Info

John Knight
Ramani Gunatilaka

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John B Knight

Abstract

The paper uses an appropriate survey from rural China to answer the question: Is happiness infectious, i.e. does the happiness of an individual depend positively on the happiness of their reference group? The evidence is consistent with this hypothesis, but the challenge is to solve the ‘reflection problem’, i.e. is the apparent effect of neighbours’ happiness on own happiness a causal one or merely a reflection? A ‘quasi-panel’ approach is adopted, treating villages as groups and individuals as multiple observations within each group, and using an error components 2SLS estimator. The results suggest that a major part of the relationship is indeed causal: Adam Smith’s insight was correct! The normative and policy implications are briefly considered.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 446.

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Date of creation: 2009
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Handle: RePEc:oxf:wpaper:446

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Find related papers by JEL classification:
D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
D60 - Microeconomics - - Welfare Economics - - - General
D64 - Microeconomics - - Welfare Economics - - - Altruism

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-09-19 (All new papers)
NEP-CNA-2009-09-19 (China)
NEP-HAP-2009-09-19 (Economics of Happiness)
NEP-SOC-2009-09-19 (Social Norms & Social Capital)
NEP-TRA-2009-09-19 (Transition Economics)

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Other versions:
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Other versions:
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Other versions:
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Other versions:
- Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Graham, Bryan S. & Hahn, Jinyong, 2005. "Identification and estimation of the linear-in-means model of social interactions," Economics Letters, Elsevier, vol. 88(1), pages 1-6, July. [Downloadable!] (restricted)
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McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July. [Downloadable!] (restricted)
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James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March. [Downloadable!] (restricted)

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