Do people seek to maximize their subjective well-being?

In a new survey we ask respondents, after a standard Subjective Well-Being (SWB) question, if they can think of changes in their lives that would improve their SWB score. If the SWB score is just one argument among others in the respondents’ goals in life, they should easily find ways to improve it, at the expense of other dimensions they care about. Our results suggest that close to 90% of the respondents actually seek to maximize their SWB. The life satisfaction question appears the best contender as the “maximand” in the contest, before the ladder-of-life question and felt happiness. Among the other goals that people pursue and for which they are willing to sacrifice some of their SWB, the prominent appear to be about their relatives and about their future self

The youngest get the pill: misdiagnosis and the production of education in Germany

Attention Deficit/Hyperactivity Disorder (ADHD) is a leading diagnosed health condition among children in many developed countries but the causes underlying these high levels of ADHD remain highly controversial. Recent research for the U.S., Canada and some European countries shows that children who enter school relatively young have higher ADHD rates than their older peers, suggesting that ADHD may be misdiagnosed in the younger children due to their relative immaturity. Using rich administrative health insurance claims data from Germany we study the effects of relative school entry age on ADHD risk in Europe's largest country and relate the effects for Germany to the international evidence. We further analyse different mechanisms that may drive these effects, focusing on physician supply side and demand side factors stemming from the production of education. We find robust evidence for school-entry age related misdiagnosis of ADHD in Germany. Within Germany and internationally, a higher share of misdiagnoses are related to a higher overall ADHD level, suggesting that misdiagnoses may be a driving factor of high ADHD levels. Furthermore, the effects in Germany seem to be driven by teachers and parents in an attempt to facilitate and improve the production of education

Mortality inequality: the good news from a county-level approach

In this essay, we ask whether the distributions of life expectancy and mortality have become generally more unequal, as many seem to believe, and we report some good news. Focusing on groups of counties ranked by their poverty rates, we show that gains in life expectancy at birth have actually been relatively equally distributed between rich and poor areas. Analysts who have concluded that inequality in life expectancy is increasing have generally focused on life expectancy at age 40 to 50. This observation suggests that it is important to examine trends in mortality for younger and older ages separately. Turning to an analysis of age-specific mortality rates, we show that among adults age 50 and over, mortality has declined more quickly in richer areas than in poorer ones, resulting in increased inequality in mortality. This finding is consistent with previous research on the subject. However, among children, mortality has been falling more quickly in poorer areas with the result that inequality in mortality has fallen substantially over time. We also show that there have been stunning declines in mortality rates for African Americans between 1990 and 2010, especially for black men. Finally we offer some hypotheses about causes for the results we see, including a discussion of differential smoking patterns by age and socioeconomic status

How some people can maximize their happiness even though they are not actively pursuing it

One of people’s most important goals tends to be the pursuit of happiness. In a new survey which measures people’s subjective well-being (another way of thinking about happiness), Marc Fleurbaey and Hannes Schwandt find that 90 percent of people are seeking to maximize their subjective well-being, though they are willing to sacrifice some of this in the short term to benefit their families and for their long-term well-being, They also find that the actual subjective well-being of those who are working to maximize it is lower than those who are not, something that they attribute to both disadvantage of opportunity and sacrificing of well-being in the short term to help others and themselves in the future

Inequality in mortality decreased among the young while increasing for older adults, 1990–2010

Many recent studies point to increasing inequality in mortality in the U.S. over the past twenty years. These studies often use mortality rates in middle and old age. Here we study inequality in mortality for all age groups in 1990, 2000, and 2010. Our analysis is based on groups of counties ranked by their poverty levels. Consistent with previous studies, we find increasing inequality in mortality at older ages. For children and young adults below age 20, however, we find strong mortality improvements that are most pronounced in poorer counties, implying a strong decrease in mortality inequality. These younger cohorts will form the future adult U.S. population, so this research suggests that inequality in old age mortality is likely to decline in future

Short and long-term effects of unemployment on fertility

Scholars have been examining the relationship between fertility and unemployment for more than a century. Most studies find that fertility falls with unemployment in the short run, but it is not known whether these negative effects persist since women may simply postpone child bearing to better economics times. Using over 140 million U.S. birth records for the period 1975 to 2010, we analyze both the short and long-run effects of unemployment on fertility. We follow fixed cohorts of U.S. born women defined by their own state and year of birth, and relate their fertility to the unemployment rate experienced by each cohort at different ages. We focus on conceptions that result in a live birth. We find that women in their early 20s are most affected by high unemployment rates in the short-run and that the negative effects on fertility grow over time. A one percentage point increase in the unemployment rate experienced between the ages of 20 and 24 reduces the short-run fertility of women in this age range by 6 conceptions per 1,000 women. When we follow these women to age 40, we find that a one percentage point increase in the unemployment rate experienced at 20 to 24 leads to an overall loss of 14.2 conceptions. This long-run effect is driven largely by women who remain childless and thus do not have either first births or higher order births

Wealth shocks and health outcomes: evidence from stock market fluctuations

Do wealth shocks affect the health of the elderly in developed countries? The economic literature is skeptical about such effects which have so far only been found for poor retirees in poor countries. In this paper I show that wealth shocks also matter for the health of wealthy retirees in the US. I exploit the booms and busts in the US stock market as a natural experiment that generated considerable gains and losses in the wealth of stock-holding retirees. Using data from the Health and Retirement Study I construct wealth shocks as the interaction of stock holdings with stock market changes. These constructed wealth shocks are highly predictive of changes in reported wealth. And they strongly affect health outcomes. A 10% wealth shock leads to an improvement of 2-3% of a standard deviation in physical health, mental health and survival rates. Effects are heterogeneous across physical health conditions, with most pronounced effects for the incidence of high blood pressure, smaller effects for heart problems and no effects for arthritis, diabetes, lung diseases and cancer. The comparison with the cross-sectional relationship of wealth and health suggests that the estimated effects of wealth shocks are larger than the long-run wealth elasticity of health

Poorly measured confounders are more useful on the left than on the right

Researchers frequently test identifying assumptions in regression based research designs (which include instrumental variables or difference-in-differences models) by adding additional control variables on the right hand side of the regression. If such additions do not affect the coefficient of interest (much) a study is presumed to be reliable. We caution that such invariance may result from the fact that the observed variables used in such robustness checks are often poor measures of the potential underlying confounders. In this case, a more powerful test of the identifying assumption is to put the variable on the left hand side of the candidate regression. We provide derivations for the estimators and test statistics involved, as well as power calculations, which can help applied researchers interpret their findings. We illustrate these results in the context of estimating the returns to schooling

Optimasi Portofolio Resiko Menggunakan Model Markowitz MVO Dikaitkan dengan Keterbatasan Manusia dalam Memprediksi Masa Depan dalam Perspektif Al-Qur`an

Risk portfolio on modern finance has become increasingly technical, requiring the use of sophisticated mathematical tools in both research and practice. Since companies cannot insure themselves completely against risk, as human incompetence in predicting the future precisely that written in Al-Quran surah Luqman verse 34, they have to manage it to yield an optimal portfolio. The objective here is to minimize the variance among all portfolios, or alternatively, to maximize expected return among all portfolios that has at least a certain expected return. Furthermore, this study focuses on optimizing risk portfolio so called Markowitz MVO (Mean-Variance Optimization). Some theoretical frameworks for analysis are arithmetic mean, geometric mean, variance, covariance, linear programming, and quadratic programming. Moreover, finding a minimum variance portfolio produces a convex quadratic programming, that is minimizing the objective function ðð¥with constraintsð ð 𥠥 ðandð´ð¥ = ð. The outcome of this research is the solution of optimal risk portofolio in some investments that could be finished smoothly using MATLAB R2007b software together with its graphic analysis