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The impact of inflation and unemployment on subjective personal and country evaluations

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  • Néstor Gándelman
  • Rubén Hernández-Murillo

Abstract

The authors use data from the Gallup World Poll to analyze what determines individual assessments of past, present, and future personal and country well-being. These measures allow the analysis of two dimensions of happiness data not previously examined in the literature: the better-than-average effect and optimism. The authors find that individuals tend to evaluate their personal well-being as being better than their country's and tend to expect that their future well-being will improve. The authors also analyze the impact of inflation and unemployment on these subjective measures and find that both variables have a negative effect on individuals' assessments of past and present well-being for themselves and their country; in contrast with other studies, however, they do not find that the effect of unemployment is significantly different from that of inflation.

Suggested Citation

  • Néstor Gándelman & Rubén Hernández-Murillo, 2009. "The impact of inflation and unemployment on subjective personal and country evaluations," Review, Federal Reserve Bank of St. Louis, issue May, pages 107-126.
  • Handle: RePEc:fip:fedlrv:y:2009:i:may:p:107-126:n:v.91no.3
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Stracca, Livio, 2014. "Financial imbalances and household welfare: Empirical evidence from the EU," Journal of Financial Stability, Elsevier, pages 82-91.
    2. Gandelman, Néstor & Hernández-Murillo, Rubén, 2013. "What do happiness and health satisfaction data tell us about relative risk aversion?," Journal of Economic Psychology, Elsevier, pages 301-312.
    3. 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.
    4. HASAN, HAMID & Khan, Hayat, 2013. "Testing the Existence of Hedonic Adaptation and Inertia to Income with implications for Islamic economics: a case of Pakistan," MPRA Paper 44927, University Library of Munich, Germany.
    5. Néstor Gandelman & Giorgina Piani, 2013. "Quality of Life Satisfaction among Workers and Non-Workers in Uruguay," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(1), pages 97-115, March.
    6. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    7. Mª del Salinas-Jiménez & Joaquín Artés & Javier Salinas-Jiménez, 2013. "How Do Educational Attainment and Occupational and Wage-Earner Statuses Affect Life Satisfaction? A Gender Perspective Study," Journal of Happiness Studies, Springer, vol. 14(2), pages 367-388, April.
    8. Rubén Hernández-Murillo & Christopher J. Martinek, 2010. "The dismal science tackles happiness data," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jan, pages 14-15.
    9. repec:spr:jhappi:v:18:y:2017:i:6:d:10.1007_s10902-016-9797-y is not listed on IDEAS

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    Keywords

    Inflation (Finance) ; Unemployment;

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