fascinating calculation on subjective utility

[michael <michael@xxxxxxxxxxxxxxxxx>]

read the last note for the kicker.


Blanchflower, David G. and Andrew J. Oswald. 2004. "Well-Being Over Time
in Britain and the USA." Journal of Public Economics, Vol. 88, pp. 1359-86.

Reported levels of well-being have declined over the last quarter of a
century in the US; life satisfaction has run approximately flat through
time in Britain.

1366: "In the early 1970s, 34% of those interviewed in the General
Social Survey described themselves as `very happy'.  By the late 1990s,
the figure was 30%.  For women, the numbers go from 36% at the start of
the period, to 29% a quarter of a century later."

1366: "Men report lower happiness scores than women, although the size
of the difference between males and females appears to be small.  Blacks
and other non-white races are less happy than whites.  This effect is
large and well-defined."

1371: "Work and marital status variables have large and well-defined
effects.  The single greatest depressant of reported happiness is the
variable `separated'; this is closely followed by `widowed'.  Being
unemployed is apparently almost as bad, and also has a small standard
error.  According to the estimates, the joblessness effect is close in
size to the unhappiness associated with divorce."

1373: "If high income goes with more happiness, and characteristics
such as unemployment and being black go with less happiness, it is
reasonable to wonder whether a monetary value could be put on some of
the other things that are associated with disutility.  Further
calculation suggests that to `compensate' men exactly for unemployment
would take a rise in income of f$60,000 per annum, and to `compensate'
for being black would take $30,000 extra per annum. These are large
sums, and in a sense are a reflection of a low (happiness) value of
extra income."

--

Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
530-898-5321
fax 530-898-5901