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Happiness, Economy and Institutions

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Author Info
Frey, Bruno S.
Stutzer, Alois

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Abstract

A cross-regional econometric analysis suggests that institutional factors in the form of direct democracy (via initiatives and referenda) and of federal structure (local autonomy) systematically and sizeably raise s elf-reported individual well-being. This positive effect can be attributed to political outcomes closer to voters' preferences, as well as to the procedural utility of political participation. Moreover, the results of "standard" microeconometric well-bein g functions previously published for other countries are generally supported. Unemployment has a strongly depressing effect on happiness. A higher income level raises happiness, however, only to a small extent.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 246.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_246

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Related research
Keywords: Subjective well-being; institutions; direct democracy; unemployment;

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Find related papers by JEL classification:
D60 - Microeconomics - - Welfare Economics - - - General
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H10 - Public Economics - - Structure and Scope of Government - - - General
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

References listed on IDEAS
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  1. Frank A. Cowell, 1990. "Cheating the Government: The Economics of Evasion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262532484, January.
  2. Nannestad, Peter & Paldam, Martin, 1994. " The VP-Function: A Survey of the Literature on Vote and Popularity Functions after 25 Years," Public Choice, Springer, vol. 79(3-4), pages 213-45, June.
  3. Santerre, Rexford E, 1993. " Representative versus Direct Democracy: The Role of Public Bureaucrats," Public Choice, Springer, vol. 76(3), pages 189-98, July.
  4. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June. [Downloadable!] (restricted)
  5. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics. [Downloadable!]
    Other versions:
  6. Iris Bohnet & Bruno S. Frey, 1999. "Social Distance and Other-Regarding Behavior in Dictator Games: Comment," American Economic Review, American Economic Association, vol. 89(1), pages 335-339, March. [Downloadable!] (restricted)
  7. Makin, John H, 1976. "Constraints on Formulation of Models for Measuring Revealed Preferences of Policy Makers," Kyklos, Blackwell Publishing, vol. 29(4), pages 709-32.
  8. Pommerehne, Werner W., 1990. "The empirical relevance of comparative institutional analysis," European Economic Review, Elsevier, vol. 34(2-3), pages 458-469, May. [Downloadable!] (restricted)
  9. Pommerehne, Werner W & Weck-Hannemann, Hannelore, 1996. " Tax Rates, Tax Administration and Income Tax Evasion in Switzerland," Public Choice, Springer, vol. 88(1-2), pages 161-70, July.
  10. Alois Stutzer, . "Demokratieindizes für die Kantone der Schweiz," IEW - Working Papers iewwp023, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  11. Pommerehne, Werner W., 1978. "Institutional approaches to public expenditure : Empirical evidence from Swiss municipalities," Journal of Public Economics, Elsevier, vol. 9(2), pages 255-280, April. [Downloadable!] (restricted)
  12. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May. [Downloadable!] (restricted)
  13. Jong-Il Kim & Lawrence J. Lau, 1996. "The sources of Asian Pacific economic growth," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 448-54, April. [Downloadable!] (restricted)
  14. Feld, Lars P & Savioz, Marcel R, 1997. "Direct Democracy Matters for Economic Performance: An Empirical Investigation," Kyklos, Blackwell Publishing, vol. 50(4), pages 507-38.
  15. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics. [Downloadable!]
    Other versions:
  16. Frey, Bruno S, 1994. "Direct Democracy: Politico-economic Lessons from Swiss Experience," American Economic Review, American Economic Association, vol. 84(2), pages 338-42, May. [Downloadable!] (restricted)
  17. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, vol. 107(445), pages 1832-47, November. [Downloadable!] (restricted)
  18. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-53, July. [Downloadable!] (restricted)
  19. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  20. Ng, Yew-Kwang, 1997. "A Case for Happiness, Cardinalism, and Interpersonal Comparability," Economic Journal, Royal Economic Society, vol. 107(445), pages 1848-58, November. [Downloadable!] (restricted)
    Other versions:
  21. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May. [Downloadable!] (restricted)
  22. Matsusaka, John G, 1995. "Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 587-623, June. [Downloadable!] (restricted)
  23. Kenny, Charles, 1999. "Does Growth Cause Happiness, or Does Happiness Cause Growth?," Kyklos, Blackwell Publishing, vol. 52(1), pages 3-25.
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