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Happiness as a Driver of Risk-Avoiding Behavior

Author

Listed:
  • Robert J. B. Goudie
  • Sach Mukherjee
  • Jan-Emmanuel De Neve
  • Andrew J. Oswald
  • Stephen Wu

Abstract

Understanding the reasons why individuals take risks, particularly unnecessary risks, remains an important question in economics. We provide the first evidence of a powerful connection between happiness and risk-avoidance. Using data on 300,000 Americans, we demonstrate that happier individuals wear seatbelts more frequently. This result is obtained with five different methodological approaches, including Bayesian model-selection and an instrumented analysis based on unhappiness through widowhood. Independent longitudinal data corroborate the finding, showing that happiness is predictive of future motor vehicle accidents. Our results are consistent with a rational-choice explanation: happy people value life and thus act to preserve it.

Suggested Citation

  • Robert J. B. Goudie & Sach Mukherjee & Jan-Emmanuel De Neve & Andrew J. Oswald & Stephen Wu, 2011. "Happiness as a Driver of Risk-Avoiding Behavior," CESifo Working Paper Series 3451, CESifo.
    • Handle: RePEc:ces:ceswps:_3451
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    Cited by:

    1. Yuxiang Hong & Jong-Suk Kim & Joo-Heon Lee, 2020. "How Does the Quality of Life Affect Individuals’ Disaster Preparedness Behaviors? A Moderated Mediation Model-Based Case Study," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 1039-1052, April.
    2. Jan-Emmanuel De Neve & Ed Diener & Louis Tay & Cody Xuereb, 2013. "The Objective Benefits of Subjective Well-Being," CEP Discussion Papers dp1236, Centre for Economic Performance, LSE.
    3. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," CEP Discussion Papers dp1196, Centre for Economic Performance, LSE.
    4. Swee, Eik Leong & Zhan, Haikun & Powdthavee, Nattavudh, 2021. "Do perceptions of economic well-being predict the onset of war and peace?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    5. De Neve, Jan-Emmanuel & Oswald, Andrew J., 2012. "Estimating the influence of life satisfaction and positive affect on later income using sibling fixed-effects," LSE Research Online Documents on Economics 51523, London School of Economics and Political Science, LSE Library.
    6. Ruohong Cai & Neli Esipova & Michael Oppenheimer & Shuaizhang Feng, 2014. "International migration desires related to subjective well-being," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    7. Drouvelis, Michalis & Powdthavee, Nattavudh, 2013. "Are happier people less judgmental of other people's selfish behaviors? Laboratory evidence from trust and gift exchange games," LSE Research Online Documents on Economics 51573, London School of Economics and Political Science, LSE Library.
    8. Ruut Veenhoven, 2015. "Informed Pursuit of Happiness: What we should know, do know and can get to know," Journal of Happiness Studies, Springer, vol. 16(4), pages 1035-1071, August.
    9. Armando N. Meier, 2019. "Emotions, Risk Attitudes, and Patience," SOEPpapers on Multidisciplinary Panel Data Research 1041, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Krause, Annabelle, 2013. "Don’t worry, be happy? Happiness and reemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 1-20.
    11. L. Lambert D’raven & N. Pasha-Zaidi, 2016. "Using the PERMA Model in the United Arab Emirates," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(3), pages 905-933, February.
    12. Dezhu Ye & Yew-Kwang Ng & Yujun Lian, 2015. "Culture and Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(2), pages 519-547, September.
    13. L. Lambert & H.-A. Passmore & M. Joshanloo, 2019. "A Positive Psychology Intervention Program in a Culturally-Diverse University: Boosting Happiness and Reducing Fear," Journal of Happiness Studies, Springer, vol. 20(4), pages 1141-1162, April.
    14. Powdthavee, Nattavudh & Stutzer, Alois, 2014. "Economic Approaches to Understanding Change in Happiness," IZA Discussion Papers 8131, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    risk preferences; seatbelt usage; vehicle accidents; subjective well-being; happiness;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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