New measures of the costs of unemployment: Evidence from the subjective well-being of 2.3 million Americans

By exploiting two very large samples of US subjective well-being data we are able to obtain comparable estimates of the monetary and other costs of unemployment on the unemployed themselves, while simultaneously estimating the effects of local employment on the subjective well-being of the rest of the population. For those who are unemployed, the subjective well-being consequences can be divided into income and non-income effects, with the latter being five times larger than the former. This is similar to what has been found in many countries, as is our finding that the non-income effects are lower for individuals living in areas of high unemployment. Most importantly, we are able to use the large sample size and variety of questions in the BRFSS and Gallup daily polls to reconcile, and extend to the United States, what had previously seemed to be contradictory results on the size and nature of the spillover effects of unemployment on subjective well-being. At the population level the spillover effects are twice as large as the direct effects, making the total well-being costs of unemployment fifteen times larger than those directly due to the lower incomes of the unemployed.unemployment; well-being

Residential Land Use Regulation and the US Housing Price Cycle Between 2000 and 2009

In a sample covering more than 300 cities in the US between January 2000 and July 2009, we find that more restrictive residential land use regulations and geographic land constraints are linked to larger booms and busts in housing prices. The natural and man-made constraints also amplify price responses to an initial positive mortgage-credit supply shock, leading to greater price increases in the boom and subsequently bigger losses.residential land use regulation; credit expansion; housing prices

New measures of the costs of unemployment: Evidence from the subjective well-being of 3.3 million Americans

Using two large US surveys, we estimate the effects of unemployment on the subjective well-being of the unemployed and the rest of the population. For the unemployed, the non-pecuniary costs of unemployment are several times as large as those due to lower incomes, while the indirect effect at the population level is fifteen times as large. For those who are still employed, a one percentage point increase in local unemployment has an impact on well-being roughly equivalent to a four percent decline in household income. We also find evidence indicating that job security is an important channel for the indirect effects of unemployment.

Constructing Consumer Sentiment Index for U.S. Using Google Searches

We construct a consumer sentiment index for the U.S. using the popularity trends of selected Google searches. The final index consists of four components and is highly correlated with the Index of Consumer Sentiment from the University of Michigan and the Consumer Confidence Index from the Conference Board. Among the three sentiment indices, the Google search-based index (SBI) leads in time and predicts other indices. In terms of forecasting consumer spending, the SBI outperforms both the ICS and the CCI and provides independent information. For robustness, we use multiple measures of consumer spending and a range of statistical specifications. The finding is robust.consumer sentiment; consumer confidence; leading economic indicators

How Did Exchange Rates Affect Employment in US Cities?

We estimate the effects of real exchange rate movements on employment in US cities between 2003 and 2010. We explore the differences in the composition of local industries to construct city-specific changes in exchange rates and estimate their effects on local employment in manufacturing industries and in nonmanufacturing industries. Controlling for year and city fixed effects, we find that a depreciation of the US dollar increased local employment in the manufacturing industries, our proxy for the tradable sector. The depreciation also increased employment in the nonmanufacturing industries, the nontradable sector. Furthermore, the effects on nonmanufacturing employment were stronger in cities that had a higher fraction of manufacturing employment, indicating the exchange rate movements’ indirect effects through the manufacturing industries. We also consider an alternative definition of the tradable sector that is broadened to include five service industries. The findings are similar

Well-being and Trust in the Workplace

This paper summarizes and extends our recent work using life satisfaction regressions to estimate the relative values of financial and non-financial job characteristics. The well-being results show strikingly large values for non-financial job characteristics, especially workplace trust and other measures of the quality of social capital in workplaces. For example, an increase of trust in management that is about one tenth of the scale is equivalent to more than 30% increase in monetary income. We find that these values differ significantly by gender and by union status. We consider the reasons for such large values, and explore their implications for employers, employees, and policy-makers.

International evidence on the social context of well-being

This paper uses the first three waves of the Gallup World Poll to investigate differences across countries, cultures and regions in the factors linked to life satisfaction, paying special attention to the social context. Our principal findings are: First, using the larger pooled sample, we find that answers to the satisfaction with life and Cantril ladder questions provide consistent views of what constitutes a good life, with an average of the two measures providing a clearer picture than either measure on its own. Second, we find strong evidence for the importance of both income and social context variables in explaining within-country and international differences in well-being. For most specifications tested, the combined effects of a few measures of the social and institutional context are as large as those of income in explaining both international and intra-national differences in life satisfaction. Third, the very significant influences of both income and social factors permit the calculation of compensating differentials for social factors. We find very large income-equivalent values for key measures of the social context. Fourth, the international similarity of the estimated equations suggests that the large international differences in average life evaluations are not due to different approaches to the meaning of a good life, but to differing social, institutional, and economic life circumstances

Solving a Fully Fuzzy Linear Programming Problem through Compromise Programming

In the current literatures, there are several models of fully fuzzy linear programming (FFLP) problems where all the parameters and variables were fuzzy numbers but the constraints were crisp equality or inequality. In this paper, an FFLP problem with fuzzy equality constraints is discussed, and a method for solving this FFLP problem is also proposed. We first transform the fuzzy equality constraints into the crisp inequality ones using the measure of the similarity, which is interpreted as the feasibility degree of constrains, and then transform the fuzzy objective into two crisp objectives by considering expected value and uncertainty of fuzzy objective. Since the feasibility degree of constrains is in conflict with the optimal value of objective function, we finally construct an auxiliary three-objective linear programming problem, which is solved through a compromise programming approach, to solve the initial FFLP problem. To illustrate the proposed method, two numerical examples are solved

Happiness and the Quality of Government

This paper uses happiness data to assess the quality of government. Our happiness data are drawn from the Gallup World Poll, starting in 2005 and extending to 2017 or 2018. In our analysis of the panel of more than 150 countries and generally over 1,500 national-level observations, we show that government delivery quality is significantly correlated with national happiness, but democratic quality is not. We also analyze other quality of government indicators. Confidence in government is correlated with happiness, however forms of democracy and government spending seem not. We further discuss three channels (including peace and conflict, trust, and inequality) whereby quality of government and happiness are linked. We finally summarize what has been learned about how government policies could be formed to improve citizens’ happiness

International Evidence on the Social Context of Well-Being

This paper uses the first three waves of the Gallup World Poll to investigate differences across countries, cultures and regions in the factors linked to life satisfaction, paying special attention to the social context. Our principal findings are: First, using the larger pooled sample, we find that answers to the satisfaction with life and Cantril ladder questions provide consistent views of what constitutes a good life, with an average of the two measures providing a clearer picture than either measure on its own. Second, we find strong evidence for the importance of both income and social context variables in explaining within-country and international differences in well-being. For most specifications tested, the combined effects of a few measures of the social and institutional context are as large as those of income in explaining both international and intra-national differences in life satisfaction. Third, the very significant influences of both income and social factors permit the calculation of compensating differentials for social factors. We find very large income-equivalent values for key measures of the social context. Fourth, the international similarity of the estimated equations suggests that the large international differences in average life evaluations are not due to different approaches to the meaning of a good life, but to differing social, institutional, and economic life circumstances.