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

An Analysis of Life Satisfaction in Albania: An Heteroscedastic Ordered Probit Model Approach

  • Julie Litchfield

    ()

    (Department of Economics, University of Sussex)

  • Barry Reilly

    ()

    (Department of Economics, University of Sussex)

  • Mario Veneziani

    (Università Cattolica del Sacro Cuore, Italy)

This paper uses the nationally representative Albanian Living Standards Measurement Survey from 2005 to investigate the determinants of life satisfaction. In common with much of the existing empirical economics literature that models life satisfaction (or subjective well-being) this paper exploits an ordered probit model. In contrast to the existing literature, however, the current study places an important emphasis on regression model evaluation. Diagnostic testing revealed a number of econometric model deficiencies but the explicit incorporation of an heteroscedastic function into the ordered probit model resolved all detected problems. The tenor of the key findings generally reflects that found in the literature on the determinants of life satisfaction for both advanced capitalist and transitional economies. However, a number of additional themes with a strong Albanian dimension were interrogated. In particular, our study revealed evidence of long memories among Albanian respondents with respect to the collapse of that country’s notorious pyramid schemes and the scarring effects of the episode continue to impact on life satisfaction even with the passage of almost eight years. A sizeable effect for communal level crime activity on life satisfaction was also detected. In addition, our econometric estimates provided some empirical insights on the monetary value of friendship and the costs of children.

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://www.sussex.ac.uk/economics/documents/wps-3-2010/pdf
Download Restriction: no

Paper provided by Department of Economics, University of Sussex in its series Working Paper Series with number 0310.

as
in new window

Length:
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:sus:susewp:0310
Contact details of provider: Postal: Jubilee Building G08, Falmer, Brighton, BN1 9SL
Phone: +44 (0) 1273 678889
Fax: +44 (0)1273 873715
Web page: http://www.sussex.ac.uk/economicsEmail:


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. 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.
  2. Bruno S. Frey & Alois Stutzer, . "Happiness, Economy and Institutions," IEW - Working Papers 015, Institute for Empirical Research in Economics - University of Zurich.
  3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  4. Peter Sanfey & Utku Teksoz, 2005. "Does transition make you happy?," Working Papers 91, European Bank for Reconstruction and Development, Office of the Chief Economist.
  5. Eggers, Andrew & Gaddy, Clifford & Graham, Carol, 2006. "Well-being and unemployment in Russia in the 1990s: Can society's suffering be individuals' solace?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 209-242, April.
  6. Stevenson, Betsey & Wolfers, Justin, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," CEPR Discussion Papers 6944, C.E.P.R. Discussion Papers.
  7. Alesina, Alberto F & Di Tella, Rafael & MacCulloch, Robert, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," CEPR Discussion Papers 2877, C.E.P.R. Discussion Papers.
  8. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
  9. Hayo, Bernd, 2007. "Happiness in transition: An empirical study on Eastern Europe," Economic Systems, Elsevier, vol. 31(2), pages 204-221, June.
  10. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  11. Ceema Namazie & Peter Sanfey, 1998. "Happiness in Transition: The Case of Kyrgyzstan," Studies in Economics 9808, School of Economics, University of Kent.
  12. 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.
  13. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  14. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  15. Andrew E. Clark & Orsolya Lelkes, 2005. "Deliver us from evil: religion as insurance," PSE Working Papers halshs-00590570, HAL.
  16. Distante, Roberta, 2010. "Subjective well-being, income and relative concerns in the UK," MPRA Paper 30786, University Library of Munich, Germany.
  17. Machin, Stephen J & Stewart, Mark B, 1990. "Unions and the Financial Performance of British Private Sector Establishments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(4), pages 327-50, Oct.-Dec..
  18. Hayo, Bernd & Seifert, Wolfgang, 2002. "Subjective economic well-being in Eastern Europe," IBES Diskussionsbeiträge 120, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
  19. William Pavot & Ed Diener, 1993. "The affective and cognitive context of self-reported measures of subjective well-being," Social Indicators Research, Springer, vol. 28(1), pages 1-20, January.
  20. Senik, Claudia, 2004. "When information dominates comparison: Learning from Russian subjective panel data," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2099-2123, August.
  21. Simon Peters, 2000. "On the use of the RESET test in microeconometric models," Applied Economics Letters, Taylor & Francis Journals, vol. 7(6), pages 361-365.
  22. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  23. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  24. Holmes, Jessica, 2003. "Measuring the determinants of school completion in Pakistan: analysis of censoring and selection bias," Economics of Education Review, Elsevier, vol. 22(3), pages 249-264, June.
  25. C. Graham & S. Pettinato, 2002. "Frustrated Achievers: Winners, Losers and Subjective Well-Being in New Market Economies," Journal of Development Studies, Taylor & Francis Journals, vol. 38(4), pages 100-140.
  26. repec:hal:wpaper:halshs-00590570 is not listed on IDEAS
  27. Randy Larsen & Ed Diener & Robert Emmons, 1985. "An evaluation of subjective well-being measures," Social Indicators Research, Springer, vol. 17(1), pages 1-17, July.
  28. Orsolya Lelkes, 2002. "Tasting Freedom: Happiness, religion and economic transition," CASE Papers case59, Centre for Analysis of Social Exclusion, LSE.
  29. Chesher, Andrew & Irish, Margaret, 1987. "Residual analysis in the grouped and censored normal linear model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 33-61.
  30. David G. Blanchflower & Richard Freeman, 1997. "The attitudinal legacy of Communist labor relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(3), pages 438-459, April.
  31. Ravallion, Martin & Lokshin, Michael, 2002. "Self-rated economic welfare in Russia," European Economic Review, Elsevier, vol. 46(8), pages 1453-1473, September.
  32. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
  33. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
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:sus:susewp:0310. 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: (Russell Eke)

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.