Subjective Economic Well-being in Transition Countries: Investigating the Relative Importance of Macroeconomic Variables
In this paper we combine the data from surveys about life-satisfaction and macroeconomic data and analyse the (order of) importance of macroeconomic variables for one’s subjective economic well-being. This approach allows an analysis from a subjective view – that of the public, in contrast to the usually used objective view, whereby policy goals are assumed to reflect public opinion. We find that the key macroeconomic variables of inflation, unemployment and GDP (growth) matter for the public’s sense of economic well-being in transition countries. Moreover, improvements in national income lead to both temporary and permanent gains in subjective economic well-being in transition countries. Habituation effects are present, indicating that individuals become accustomed to an increase in national income, but not all the benefits of this increase dissipate over time. Furthermore, GDP growth and unemployment are found to be more important than inflation in transition countries. This suggests that achieving GDP growth is an important goal of economic policy not only from the point of view of policy-makers but also from that of the public, and that it should be pursued. On the other hand, given that unemployment is more important than inflation for the public’s economic well-being, policy-makers in transition countries might need to revise their exclusive focus on inflation. This is to say that more effort should be put into decreasing unemployment (which might have an adverse effect on inflation) rather than into restraining inflation.
Volume (Year): 32 (2008)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: Smiciklasova 21, 10000 Zagreb|
Web page: http://www.fintp.hr/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003.
"The Macroeconomics of Happiness,"
The Review of Economics and Statistics,
MIT Press, vol. 85(4), pages 809-827, November.
- Di Tella, R. & MacCulloch, R.J.: Oswald, A.J., 1997. "The Macroeconomics of Happiness," Papers 19, Centre for Economic Performance & Institute of Economics.
- Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 1999. "The macroeconomics of happiness," ZEI Working Papers B 03-1999, University of Bonn, ZEI - Center for European Integration Studies.
- Robert J. Shiller, 1997. "Why Do People Dislike Inflation?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 13-70 National Bureau of Economic Research, Inc.
- Robert J. Shiller, 1996. "Why Do People Dislike Inflation?," NBER Working Papers 5539, National Bureau of Economic Research, Inc.
- Robert J. Shiller, 1996. "Why Do People Dislike Inflation?," Cowles Foundation Discussion Papers 1115, Cowles Foundation for Research in Economics, Yale University.
- Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, University of Bonn, ZEI - Center for European Integration Studies.
- Hayo, Bernd & Seifert, Wolfgang, 2003. "Subjective economic well-being in Eastern Europe," Journal of Economic Psychology, Elsevier, vol. 24(3), pages 329-348, June.
- Bernd Hayo & Wolfgang Seifert, 2002. "Subjective Economic Well-Being in Eastern Europe," Development and Comp Systems 0203001, EconWPA.
- Hayo, Bernd & Seifert, Wolfgang, 2002. "Subjective economic well-being in Eastern Europe," IBES Diskussionsbeiträge 120, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
- Green, Francis & Felstead, Alan & Burchell, Brendan, 2000. " Job Insecurity and the Difficulty of Regaining Employment: An Empirical Study of Unemployment Expectations," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 855-883, Special I.
- Paul, Satya, 2001. "A Welfare Loss Measure of Unemployment with an Empirical Illustration," Manchester School, University of Manchester, vol. 69(2), pages 148-163, March. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ipf:finteo:v:32:y:2008:i:4:p:519-537. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Fabris)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.