Multidimensionality of Longitudinal Data: Unlocking the Age-Happiness Puzzle
In social and economic analysis of longitudinal data, the socio-economic variables that are statistically significant in pooled data regressions sometimes become insignificant after individual fixed effects are controlled for. This phenomenon has been observed in the analysis of the relationship between age and happiness. The discrepancy in results between regressions with and without controlling for individual fixed effects is sometimes known as a mystery in the research of age and happiness. This paper points out that cross-sectional information and longitudinal information reflect distinct aspects of the phenomenon under study. In age-happiness studies, cross-sectional information describes whether, in a particular year, people of a certain age are happier than people of other ages. Longitudinal information describes whether people become happier or less happy over the life cycle. The former compares happiness between different people, and the later compares happiness within the same person. Average happiness is U-shaped in age among different cohorts, and simultaneously decreases with age in the life cycle within individuals. Using data on happiness from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this paper explains what “individual fixed effects are controlled for” means in the context of FE regression, gives insight into the age-happiness puzzle and raises awareness of the multidimensionality of longitudinal data.
|Date of creation:||Mar 2014|
|Contact details of provider:|| Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia|
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
More information through EDIRC
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.:
- David G. Blanchflower & Andrew Oswald, 2007.
"Is Well-being U-Shaped over the Life Cycle?,"
NBER Working Papers
12935, National Bureau of Economic Research, Inc.
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-Being U-Shaped over the Life Cycle?," IZA Discussion Papers 3075, Institute for the Study of Labor (IZA).
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
- Paul Frijters & Tony Beatton, 2008.
"The mystery of the U-shaped relationship between happiness and age,"
NCER Working Paper Series
26, National Centre for Econometric Research.
- Frijters, Paul & Beatton, Tony, 2012. "The mystery of the U-shaped relationship between happiness and age," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 525-542.
- Wencke Gwozdz & Alfonso Sousa-Poza, 2010.
"Ageing, Health and Life Satisfaction of the Oldest Old: An Analysis for Germany,"
Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement,
Springer, vol. 97(3), pages 397-417, July.
- Gwozdz, Wencke & Sousa-Poza, Alfonso, 2009. "Ageing, Health and Life Satisfaction of the Oldest Old: An Analysis for Germany," IZA Discussion Papers 4053, Institute for the Study of Labor (IZA).
- Bert G.M. Van Landeghem, 2008. "Human Well-Being over the Life Cycle: Longitudinal Evidence from a 20-Year Panel," LICOS Discussion Papers 21308, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Heather Lacey & Todd Kierstead & Diana Morey, 2012. "De-Biasing the Age-Happiness Bias: Memory Search and Cultural Expectations in Happiness Judgments Across the Lifespan," Journal of Happiness Studies, Springer, vol. 13(4), pages 647-658, August.
- Andrew E. Clark & Andrew J. Oswald, 2006. "The curved relationship between subjective well-being and age," PSE Working Papers halshs-00590404, HAL.
- de Ree, Joppe & Alessie, Rob, 2011. "Life satisfaction and age: Dealing with underidentification in age-period-cohort models," Social Science & Medicine, Elsevier, vol. 73(1), pages 177-182, July.
- Cheng, Terence Chai & Powdthavee, Nattavudh & Oswald, Andrew J., 2014.
"Longitudinal Evidence for a Midlife Nadir in Human Well-being: Results from Four Data Sets,"
IZA Discussion Papers
7942, Institute for the Study of Labor (IZA).
- Cheng, Terence C. & Powdthavee, Nattavudh & Oswald, Andrew J., 2014. "Longitudinal Evidence for a Midlife Nadir in Human Well-being: Results from Four Data Sets," CAGE Online Working Paper Series 187, Competitive Advantage in the Global Economy (CAGE).
- Cheng, Terence C & Powdthavee, Nattavudh & Oswald, Andrew J, 2014. "Longitudinal Evidence for a Midlife Nadir in Human Wellbeing: Results from Four Data Sets," The Warwick Economics Research Paper Series (TWERPS) 1037, University of Warwick, Department of Economics.
- Kassenboehmer, Sonja C. & Haisken-DeNew, John P., 2012. "Heresy or enlightenment? The well-being age U-shape effect is flat," Economics Letters, Elsevier, vol. 117(1), pages 235-238.
- Chaonan Chen, 2001. "Aging and Life Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 54(1), pages 57-79, April.
- Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2014n04. 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: (Abbey Treloar)
If references are entirely missing, you can add them using this form.