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Macroeconomics and life satisfaction: Revisiting the "misery index"

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Abstract

Using data from surveys of life satisfaction, evidence has been presented that European citizens' subjective well-being is inversely related to inflation and unemployment. Motivated by the "Barro Misery Index", this paper reconsiders the relationship between macroeconomics and subjective well-being by including the growth rate and the long-term interest rate as additional variables in life satisfaction regressions. The paper finds that people care about growth and employment on the one hand and stability on the other, where stability may alternatively be captured by the inflation rate or the long-term interest rate. Stability, measured in whichever of these ways, does not seem to be less important to European citizens than growth and employment.

Suggested Citation

  • Heinz Welsch, 2007. "Macroeconomics and life satisfaction: Revisiting the "misery index"," Journal of Applied Economics, Universidad del CEMA, vol. 10, pages 237-251, November.
  • Handle: RePEc:cem:jaecon:v:10:y:2007:n:2:p:237-251
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    File URL: https://www.ucema.edu.ar/publicaciones/download/volume10/welsch.pdf
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    Cited by:

    1. repec:old:wpaper:342 is not listed on IDEAS
    2. Christopher Ambrey & Christopher Fleming, 2014. "Life Satisfaction in Australia: Evidence from Ten Years of the HILDA Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(2), pages 691-714, January.
    3. Ewa, Lechman, 2009. "Okun`s and Barro`s Misery Index as an alternative poverty assessment tool. Recent estimations for European countries," MPRA Paper 37493, University Library of Munich, Germany.
    4. repec:eee:touman:v:52:y:2016:i:c:p:1-18 is not listed on IDEAS
    5. Darren Grant, 2009. "What Makes a Good Economy? An Analysis of Survey Data," Working Papers 0909, Sam Houston State University, Department of Economics and International Business.
    6. Cahill, Kevin E. & McNamara, Tay K. & Pitt-Catsouphes, Marcie & Valcour, Monique, 2015. "Linking shifts in the national economy with changes in job satisfaction, employee engagement and work–life balance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 40-54.
    7. Udo Ebert & Heinz Welsch, 2009. "How Do Europeans Evaluate Income Distributions? An Assessment Based On Happiness Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 803-819, September.
    8. repec:zbw:hohpro:342 is not listed on IDEAS
    9. repec:kap:ejlwec:v:45:y:2018:i:1:d:10.1007_s10657-012-9327-2 is not listed on IDEAS
    10. Nguyen, Ha & Duncan, Alan, 2015. "Macroeconomic fluctuations in home countries and immigrants’ well-being: New evidence from Down Under," MPRA Paper 69593, University Library of Munich, Germany, revised Feb 2016.
    11. Salahodjaev, Raufhon, 2015. "IQ and the wellbeing of nations," MPRA Paper 66356, University Library of Munich, Germany.
    12. Jorge M. Streb, 2011. "Estabilización económica e incentivos políticos," CEMA Working Papers: Serie Documentos de Trabajo. 461, Universidad del CEMA.
    13. Malte Hübner & Marcus Klemm, 2015. "Preferences over inflation and unemployment in Europe: a north–south divide?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(4), pages 319-335, December.
    14. Mayes, David G. & Paloviita, Maritta & Virén, Matti, 2016. "EMU and the Anchoring of Inflation Expectations," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(4), pages 341-364.
    15. Oliver Picek, 2017. "The "Magic Square" of Economic Policy measured by a Macroeconomic Performance Index," Working Papers 1702, New School for Social Research, Department of Economics.
    16. repec:prg:jnlpep:v:preprint:id:658:p:1-18 is not listed on IDEAS
    17. Heinz Welsch & Jan Kühling, 2011. "Comparative Economic Performance and Institutional Change in OECD Countries: Evidence from Subjective Well-Being Data," Working Papers V-342-11, University of Oldenburg, Department of Economics, revised Dec 2011.
    18. Mayes David & Paloviita Maritta & Viren Matti, 2015. "The EMU and the anchoring of inflation expectations?," Discussion Papers 103, Aboa Centre for Economics.

    More about this item

    Keywords

    misery index; social welfare function; inflation; unemployment; subjective wellbeing; life satisfaction;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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