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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 Group Munich.
  • Handle: RePEc:ces:ceswps:_3451
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Krause, Annabelle, 2013. "Don’t worry, be happy? Happiness and reemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 1-20.
    2. 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.

    More about this item

    Keywords

    risk preferences; seatbelt usage; vehicle accidents; subjective well-being; happiness;

    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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