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The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence Using Subjective Well-Being Data

Author

Listed:
  • Jan-Emmanuel De Neve

    (University of Oxford)

  • George Ward

    (MIT and Centre for Economic Performance)

  • Femke De Keulenaer

    (IPSOS)

  • Bert Van Landeghem

    (University of Sheffield, Maastricht University, and IZA)

  • Georgios Kavetsos

    (Queen Mary University of London and Centre for Economic Performance)

  • Michael I. Norton

    (Harvard Business School)

Abstract

Are individuals more sensitive to losses than gains in terms of economic growth?We find that measures of subjective well-being are more than twice as sensitive to negative as compared to positive economic growth. We use Gallup World Poll data from over 150 countries, BRFSS data on 2.3 million U.S. respondents, and Eurobarometer data that cover multiple business cycles over four decades. This research provides a new perspective on the welfare cost of business cycles, with implications for growth policy and the nature of the long-run relationship between GDP and subjective well-being.

Suggested Citation

  • Jan-Emmanuel De Neve & George Ward & Femke De Keulenaer & Bert Van Landeghem & Georgios Kavetsos & Michael I. Norton, 2018. "The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence Using Subjective Well-Being Data," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 362-375, May.
  • Handle: RePEc:tpr:restat:v:100:y:2018:i:2:p:362-375
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    More about this item

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D69 - Microeconomics - - Welfare Economics - - - Other
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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