Unhappiness and Job Finding

It is puzzling that people feel quite unhappy when they become unemployed, while at the same time active labor market policies are needed to bring unemployed back to work more quickly. Using data from the German Socio-Economic Panel, we investigate whether there is indeed such a puzzle. First, we find that nearly half of the unemployed do not experience a drop in happiness, which might explain why at least some workers need to be activated. In addition to that, we find that even though unemployed who experience a drop in happiness search more actively for a job, it does not speed up their job finding. Apparently, there is no link between unhappiness and the speed of job finding. Hence, there is no contradiction between unemployed being unhappy and the need for activation policies.

Leave the Drama on the Stage: The Effect of Cultural Participation on Health

The aim of this study is to estimate the causal effect of cultural participation on health status. Cultural activities may directly impact upon health through palliative coping or substituting health-compromising behaviors. Cultural engagement may also facilitate the development of social networks, which can improve health via social support and the dissemination of social health norms. Previous estimates on the arts-health relationship are potentially biased due to reverse causality and unobserved heterogeneity. Using individual-level data from Germany, we employ propensity-score matching methods. The treatment group is confined to individuals that visit cultural events at least once a month. The participation equation includes a rich set of personal characteristics that cover the respondents' demographic and social background, social capital and leisure-time activities, health-related lifestyle, personality and childhood environment. We explicitly consider reverse causality by including the pre-treatment trends in health outcomes among the covariates. To deal with time-fixed unobserved heterogeneity, we combine the matching model with a difference-indifference approach. We find that frequent cultural-event visits are unrelated to health once we account for unobserved persistent differences across individuals. However, examining the dose-response relationship we find positive mental-health effects of low levels of cultural participation compared to non-attendance. Our results may thus yield important insights on the effectiveness of arts participation as a means to reduce social inequalities in health

Physiconomics for the Identification of Relativistic Satisfaction

Abstract Recent developments in identifying economic and social phenomena within the theory and laws of physics do not provide a sufficient basis of information for economists. In this article, an interdisciplinary analysis in microeconomics, is proposed to overcome this limit by establishing a new economic theory in the way of better analyzing economic problems from the methodological perspectives of physics. This new theoretical approach is tested on a model using individual time use values that identifies how life satisfaction may be defined through economic utility so as to better investigate the income-happiness paradox as pointed out by Easterlin. The theoretical analysis point out that an increase in happiness would depend on the ability to replace subsidiaries with conspicuous consumption so long as they have common characteristics that satisfy the same needs. This consumption pattern implies that consumers would draw more satisfaction from less usage of conspicuous goods than from higher usage of subsidiaries, under given budget and time constraints

How Job Changes Affect People's Lives Evidence from Subjective Well-Being Data

For representative German panel data, we document that voluntary job switching is associated with higher levels of life satisfaction, though only for some time, whereas forced job changes do not affect life satisfaction clearly. Using plant closures as an exogenous trigger of switching to a new employer, we find that job mobility turns out to be harmful for satisfaction with family life. By investigating people's lives beyond their workplaces, our study complements research on the well-being impact of labour mobility, suggesting some positive welfare effects of flexible labour markets, but also a previously undocumented potential for negative implications

The Relative Utility Hypothesis With and Without Self-Reported Reference Wages

This article uses survey data of workers in Japan to study the effects of own and self-reported reference wages on subjective well-being. Higher wages lead to higher life and job satisfaction. When workers perceive that their peers earn higher wages, they report lower well-being. We compare our results with relative utility tests in the literature and develop a generalized version of the classical measurement error model to show that the estimated bias of the reference wage effect can go in both directions. We propose an IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the true effect

A microeconometric study of theatre demand

We develop a model of theatre demand with learning by consuming, and test some of its implications on a large random sample of theatregoers and non-theatregoers. This seems to be the most comprehensive econometric study of demand for the theatre from individual data. We hypothesize that each time the consumer watches a play, he experiences a degree of pleasant or unpleasant surprise on the basis of which he will revise his future expectations of his own taste. The learning phase is likely to be unusually long for highly differentiated cultural goods. Our set of data contains unique information about the full price and the fixed cost of theatre, the objective quality of the outing, past experience of and taste for the theatre, and consumption of substitute leisure activities such as reading, television and cinema. Our methodology and data enable us to infer price elasticity on survey data from knowledge of theatregoing experience and taste. After controlling for many variables, we conclude that demand for the theatre is price-elastic, which contradicts previous estimates on aggregate time-series data. Moreover, we estimate demand conditional on past attendance after controlling for selectivity bias. Satisfaction reported by consumers after the last play is also estimated and interpreted as an ordinal conditional choice. Copyright Kluwer Academic Publishers 1996theatre demand, learning by consuming, individual data, conditional choice and satisfaction (JEL: Z1, L82),