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Markov switching models for happiness during a pandemic: The New-Zealand experience

Author

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  • Rossouw, Stephanie
  • Greyling, Talita
  • Adhikari, Tamanna
  • Morrison, Phillip S.

Abstract

This paper estimates Markov switching models with daily happiness (GNH) data from New Zealand for a period inclusive of the Covid-19 global health pandemic. This helps us understand the dynamics of happiness due to an external shock and provides valuable information about its future evolution. Furthermore, we determine the probabilities to transition between states of happiness and estimate the duration in these states. In addition, as maximising happiness is a policy priority, we determine the factors that increase happiness, especially during the pandemic to ensure rapid restoration of happiness levels post the Covid-19 shock. The results show New Zealand is currently in an unhappy state which is lasting longer than predicted. To increase the happiness levels to pre-pandemic levels, policymakers could allow free mobility, create economic stimuli, and allow international travel between New Zealand and low-risk Covid-19 countries.

Suggested Citation

  • Rossouw, Stephanie & Greyling, Talita & Adhikari, Tamanna & Morrison, Phillip S., 2020. "Markov switching models for happiness during a pandemic: The New-Zealand experience," GLO Discussion Paper Series 573, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:573
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    References listed on IDEAS

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    Cited by:

    1. Greyling, Talita & Rossouw, Stephanie & Adhikari, Tamanna, 2020. "A tale of three countries: How did Covid-19 lockdown impact happiness?," GLO Discussion Paper Series 584, Global Labor Organization (GLO).
    2. Talita Greyling & Stephanie Rossouw & Tamanna Adhikari, 2021. "A Tale of Three Countries: What is the Relationship Between COVID‐19, Lockdown and Happiness?," South African Journal of Economics, Economic Society of South Africa, vol. 89(1), pages 25-43, March.

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    More about this item

    Keywords

    Happiness; Covid-19; Big data; Markov switching model; New Zealand;
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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