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Is Happiness Infectious?

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Author Info

  • John Knight
  • Ramani Gunatilaka

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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Bibliographic Info

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: 01 Aug 2009
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Handle: RePEc:oxf:wpaper:446

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Keywords: Happiness; Social interaction; Relative deprivation; China;

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References

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  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).
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  16. 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.
  17. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  18. 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.
  19. 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.
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  22. Richard Layard, 2006. "Happiness and Public Policy: a Challenge to the Profession," Economic Journal, Royal Economic Society, vol. 116(510), pages C24-C33, 03.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Infectious happiness
    by chris dillow in Stumbling and Mumbling on 2009-09-21 13:59:54
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Cited by:
  1. Carlsson, Fredrik & Lampi, Elina & Li, Wanxin & Martinsson, Peter, 2011. "Subjective well-being among preadolescents - Evidence from urban China," Working Papers in Economics 500, University of Gothenburg, Department of Economics.

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