IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Is Happiness Contagious? Separating Spillover Externalities from the Group-Level Social Context

  • Tumen, Semih
  • Zeydanli, Tugba

We investigate whether individuals feel happier when others around them are happier in broadly defined worker groups. This will be a formal test of spillovers in happiness. Answering this question requires a careful handling of the reflection problem, as it may not be possible to separate the endogenous spillover effects from contextual effects unless an appropriately designed identification strategy is employed. Implementing such a strategy and using the 2008 release of the British Housing Panel Survey (BHPS), we show that the group-level happiness does not have a statistically significant endogenous effect on individual-level happiness in the Great Britain. We report, however, statistically significant contextual effects in various dimensions including age, education, employer status, and health. These results suggest that higher group-level happiness does not spill over to the individual level in neither negative nor positive sense, while the individual-level happiness is instead determined by social context (i.e., the group-level counterparts of certain observed covariates). We also test the relevance of the "Easterlin paradox" and find that our result regarding the effect of income on happiness -- controlling for social interactions effects -- is the group-level analogue of Easterlin's original results.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/53184/1/MPRA_paper_53184.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 53184.

as
in new window

Length:
Date of creation: 25 Jan 2014
Date of revision:
Handle: RePEc:pra:mprapa:53184
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Ravallion, Martin & Lokshin, Michael, 2000. "Identifying welfare effects from subjective questions," Policy Research Working Paper Series 2301, The World Bank.
  2. Tumen, Semih & Zeydanli, Tugba, 2013. "Day-of-the-Week Effects in Subjective Well-Being: Does Selectivity Matter?," MPRA Paper 50475, University Library of Munich, Germany.
  3. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  4. Oswald, Andrew J. & Proto, Eugenio & Sgroi, Daniel, 2008. "Happiness and Productivity," The Warwick Economics Research Paper Series (TWERPS) 882, University of Warwick, Department of Economics.
  5. Andrew Clark, . "Job Satisfaction and Gender. Why are Women so Happy at Work?," Economics Discussion Papers 415, University of Essex, Department of Economics.
  6. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  7. Andrew E. Clark & Fabrice Etilé, 2010. "Happy House: Spousal Weight and Individual Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 349, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2007. "Identification of Peer Effects through Social Networks," IZA Discussion Papers 2652, Institute for the Study of Labor (IZA).
  9. Mark P. Taylor, 2006. "Tell me why I don't like Mondays: investigating day of the week effects on job satisfaction and psychological well-being," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(1), pages 127-142.
  10. Alejandro Gaviria & Steven Raphael, 2001. "School-Based Peer Effects And Juvenile Behavior," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 257-268, May.
  11. Geeta Kingdon & John Knight, 2004. "Community, Comparisons and Subjective Well-being in a Divided Society," Development and Comp Systems 0409067, EconWPA.
  12. Gary S. Becker & Robert J. Barro, 1986. "A Reformulation of the Economic Theory of Fertility," NBER Working Papers 1793, National Bureau of Economic Research, Inc.
  13. Brock,W.A. & Durlauf,S.N., 2002. "A multinomial choice model of neighborhood effects," Working papers 4, Wisconsin Madison - Social Systems.
  14. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
  15. Adriaan R. Soetevent, 2006. "Empirics of the Identification of Social Interactions; An Evaluation of the Approaches and Their Results ," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 193-228, 04.
  16. Andrew E. Clark and Andrew J. Oswald, . "Satisfaction and Comparison Income," Economics Discussion Papers 419, University of Essex, Department of Economics.
  17. Ulrich Schimmack & Richard Lucas, 2006. "Marriage Matters: Spousal Similarity in Life Satisfaction," Discussion Papers of DIW Berlin 623, DIW Berlin, German Institute for Economic Research.
  18. Petri B?ckerman & Pekka Ilmakunnas, 2012. "The Job Satisfaction-Productivity Nexus: A Study Using Matched Survey and Register Data," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(2), pages 244-262, April.
  19. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
  20. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  21. Durlauf,S.N., 2000. "A framework for the study of individual behavior and social interactions," Working papers 16, Wisconsin Madison - Social Systems.
  22. Alois Stutzer & Rafael Lalive, . "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IEW - Working Papers 051, Institute for Empirical Research in Economics - University of Zurich.
  23. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May.
  24. N Powdthavee, 2008. "I Can’t Smile Without You: Spousal Correlation in Life Satisfaction," Discussion Papers 08/16, Department of Economics, University of York.
  25. van de Stadt, Huib & Kapteyn, Arie & van de Geer, Sara, 1985. "The Relativity of Utility: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 179-87, May.
  26. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  27. Brock,W.A. & Durlauf,S.N., 2000. "Discrete choice with social interactions," Working papers 7, Wisconsin Madison - Social Systems.
  28. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  29. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
  30. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
  31. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
  32. Yannis M. Ioannides & Jeffrey E. Zabel, 2000. "Neighborhood Effects and Housing Demand," Discussion Papers Series, Department of Economics, Tufts University 0012, Department of Economics, Tufts University.
  33. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  34. 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.
  35. Andres Aradillas‐Lopez, 2011. "Nonparametric probability bounds for Nash equilibrium actions in a simultaneous discrete game," Quantitative Economics, Econometric Society, vol. 2(2), pages 135-171, 07.
  36. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  37. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  38. Adrian Bruhin & Rainer Winkelmann, 2007. "Happiness Functions with Preference Interdependence and Heterogeneity: The Case of Altruism within the Family," SOI - Working Papers 0702, Socioeconomic Institute - University of Zurich, revised Feb 2008.
  39. Trogdon, Justin G. & Nonnemaker, James & Pais, Joanne, 2008. "Peer effects in adolescent overweight," Journal of Health Economics, Elsevier, vol. 27(5), pages 1388-1399, September.
  40. Akay, Alpaslan & Martinsson, Peter, 2009. "Sundays Are Blue: Aren’t They? - The Day-of-the-Week Effect on Subjective Well-Being and Socio-Economic Status," Working Papers in Economics 397, University of Gothenburg, Department of Economics.
  41. Semih Tumen & Tugba Zeydanli, 2014. "Social Interactions in Job Satisfaction," Carlo Alberto Notebooks 378, Collegio Carlo Alberto.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:53184. 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: (Ekkehart Schlicht)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.