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Life Satisfaction

Author

Listed:
  • Kapteyn, Arie

    () (University of Southern California)

  • Smith, James P.

    () (RAND)

  • van Soest, Arthur

    () (Tilburg University)

Abstract

We analyze the determinants of global life satisfaction in two countries (The Netherlands and the U.S.), by using both self-reports and responses to a battery of vignette questions. We find global life satisfaction of happiness is well-described by four domains: job or daily activities, social contacts and family, health, and income. Among the four domains, social contacts and family have the highest impact on global life satisfaction, followed by job and daily activities and health. Income has the lowest impact. As in other work, we find that American response styles differ from the Dutch in that Americans are more likely to use the extremes of the scale (either very satisfied or very dissatisfied) than the Dutch, who are more inclined to stay in the middle of the scale. Although for both Americans and the Dutch, income is the least important determinant of global life satisfaction, it is more important in the U.S. than in The Netherlands. Indeed life satisfaction varies substantially more with income in the U.S. than in The Netherlands.

Suggested Citation

  • Kapteyn, Arie & Smith, James P. & van Soest, Arthur, 2009. "Life Satisfaction," IZA Discussion Papers 4015, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4015
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    References listed on IDEAS

    as
    1. Arthur Van Soest & Liam Delaney & Colm Harmon & Arie Kapteyn & James P. Smith, 2007. "Validating the Use of Vignettes for Subjective Threshold Scales," Working Papers 200714, Geary Institute, University College Dublin.
    2. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    3. repec:cup:apsrev:v:97:y:2003:i:04:p:567-583_00 is not listed on IDEAS
    4. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    5. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    6. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 834-852, December.
    7. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    8. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    9. repec:cup:apsrev:v:98:y:2004:i:01:p:191-207_00 is not listed on IDEAS
    10. repec:pri:cheawb:deaton_income_health_and_wellbeing_around_the_world_evidence_%20from_gallup_world_poll_jep_spring2008.pdf is not listed on IDEAS
    11. repec:pri:cheawb:deaton_income_health_and_wellbeing_around_the_world_evidence_%20from_gallup_world_poll_jep_spring2008 is not listed on IDEAS
    12. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    13. Arie Kapteyn & James P. Smith & Arthur van Soest, 2005. "Self-reported Work Disability in the US and The Netherlands," Labor and Demography 0504006, EconWPA.
    14. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    15. Arie Kapteyn & James P. Smith & Arthur Van Soest, 2013. "Are A mericans Really Less Happy with Their Incomes?," Review of Income and Wealth, International Association for Research in Income and Wealth, pages 44-65.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Kapteyn, Smith and VanSoest - Life Satisfaction
      by Liam Delaney in Geary Behaviour Centre on 2009-08-04 02:29:00

    Citations

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    Cited by:

    1. Ada Ferrer-i-Carbonell & Bernard M.S. Van Praag & Ioannis Theodossiou, 2011. "Vignette Equivalence and Response Consistency; The Case of Job Satisfaction," Tinbergen Institute Discussion Papers 11-167/3, Tinbergen Institute.
    2. van Rooij, Maarten C.J. & Lusardi, Annamaria & Alessie, Rob J.M., 2011. "Financial literacy and retirement planning in the Netherlands," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 593-608, August.
    3. Denis Gerstorf & Nilam Ram & Jan Goebel & J├╝rgen Schupp & Ulman Lindenberger & Gert G. Wagner, 2010. "Where People Live and Die Makes a Difference: Individual and Geographic Disparities in Well-Being Progression at the End of Life," SOEPpapers on Multidisciplinary Panel Data Research 287, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Viola Angelini & Danilo Cavapozzi & Luca Corazzini & Omar Paccagnella, 2014. "Do Danes and Italians Rate Life Satisfaction in the Same Way? Using Vignettes to Correct for Individual-Specific Scale Biases," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(5), pages 643-666, October.
    5. Kapteyn, Arie & Wah, Saw Htay, 2016. "Challenges to small and medium-size businesses in Myanmar: What are they and how do we know?," Journal of Asian Economics, Elsevier, vol. 47(C), pages 1-22.

    More about this item

    Keywords

    vignettes; life satisfaction; happiness; reporting bias;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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