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Does Happiness Pay Revisited – New Evidence from the U.S.A

Author

Listed:
  • Carol Graham

    (The Brookings Institution)

  • Diana Liu

    (The Gallup Organization)

Abstract

In this paper, we revisit our 2004 paper that found a strong positive association between happiness and future outcomes, based on data for Russia in the years 1995-2000. This paper takes advantage of a new Gallup panel for the U.S. for 2014-2016. We essentially duplicate our original method, and add some new specifications. We find remarkably similar patterns and associations between initial period happiness and later period outcomes in the U.S., based on a very different time and sample from Russia in the 1990's. We believe that duplicating the earlier findings in a very different time and place is an important test of how robust this association is. We also find some new twists in the initial patterns that are interesting in their own right. The aim here is not only to show that the causality does not just run from the usual variables to higher or lower levels of well-being, but that the traits that subjective well-being metrics capture, such as happiness and hope, have their own independent role in the outcomes of the lives of myriad individuals around the world.

Suggested Citation

  • Carol Graham & Diana Liu, 2018. "Does Happiness Pay Revisited – New Evidence from the U.S.A," Working Papers 2018-061, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2018-061
    Note: MIP
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Graham_Liu_2018_does-happiness-pay-revisited.pdf
    File Function: First version, September, 2018
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    References listed on IDEAS

    as
    1. 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.
    2. David Blanchflower & Andrew Oswald & Sarah Stewart-Brown, 2013. "Is Psychological Well-Being Linked to the Consumption of Fruit and Vegetables?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 785-801, December.
    3. Christian Bayer & Falko Juessen, 2015. "Happiness and the Persistence of Income Shocks," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 160-187, October.
    4. Herbert Gintis & Samuel Bowles & Melissa Osborne, 2001. "Incentive-Enhancing Preferences: Personality, Behavior, and Earnings," American Economic Review, American Economic Association, vol. 91(2), pages 155-158, May.
    5. Bruno S. Frey, 2018. "Economics of Happiness," SpringerBriefs in Economics, Springer, number 978-3-319-75807-7, October.
    6. 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.
    7. Guven, Cahit & Senik, Claudia & Stichnoth, Holger, 2012. "You can’t be happier than your wife. Happiness gaps and divorce," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 110-130.
    8. Andrew J. Oswald & Eugenio Proto & Daniel Sgroi, 2015. "Happiness and Productivity," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 789-822.
    9. Guven, Cahit, 2012. "Reversing the question: Does happiness affect consumption and savings behavior?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 701-717.
    10. Carol Graham & Sergio Pinto, 2019. "Unequal hopes and lives in the USA: optimism, race, place, and premature mortality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(2), pages 665-733, April.
    11. Carol Graham & Julia Ruiz Pozuelo, 2018. "Does Hope Lead to Better Futures? Evidence from a Survey of the Life Choices of Young Adults in Peru," Working Papers 2018-038, Human Capital and Economic Opportunity Working Group.
    12. John Ifcher & Homa Zarghamee, 2011. "Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment," American Economic Review, American Economic Association, vol. 101(7), pages 3109-3129, December.
    13. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
    14. Anne Case & Angua Deaton, 2015. "Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century," Working Papers 15078.full.pdf, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
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    More about this item

    Keywords

    well-being; happiness;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other

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