Working Paper: NBER ID: w24853
Authors: Timothy N. Bond; Kevin Lang
Abstract: We replicate nine key results from the happiness literature: the Easterlin Paradox, the ‘U-shaped’ relation between happiness and age, the happiness trade-off between inflation and unemployment, cross-country comparisons of happiness, the impact of the Moving to Opportunity program on happiness, the impact of marriage and children on happiness, the ‘paradox’ of declining female happiness, and the effect of disability on happiness. We show that none of the findings can be obtained relying only on nonparametric identification. The findings in the literature are highly dependent on one's beliefs about the underlying distribution of happiness in society, or the social welfare function one chooses to adopt. Furthermore, any conclusions reached from these parametric approaches rely on the assumption that all individuals report their happiness in the same way. When the data permit, we test for equal reporting functions, conditional on the existence of a common cardinalization from the normal family. We reject this assumption in all cases in which we test it.
Keywords: happiness; empirical results; Easterlin Paradox; U-shaped relation; inflation and unemployment; cross-country comparisons
JEL Codes: D63; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Age (J14) | Happiness (I31) |
| Working years (J26) | Happiness (I31) |
| Inflation (E31) | Happiness (I31) |
| Unemployment (J64) | Happiness (I31) |
| Higher income (D31) | Happiness (I31) |
| National income (P44) | Mean happiness in the United States (I31) |