Empirical research on the role of economic institutions for subjective well-being is still widely lacking, while recent economic-experimental outcomes suggest that experienced utility may depend on the intensity of market competition. This paper is the first to empirically analyze the implication of market competition for subjective well-being using real-life survey data on 80,000 individuals in more than 60 countries from the World Values Survey 1997-2001. In support of our hypothesis, we find that market competition aggravates the impact of individual’s bargaining position in economic transactions on her subjective well-being – compared to the least powerful in society. Put differently, we find that market competition enlarges the happiness differences caused by cleavages in socio-economic position. Our results also suggest that competition induced welfare changes are not gender-specific, while a stronger rule of law appears to prevent the generation of such additional benefits or losses. Particularly the latter results call for further economic-experimental corroboration in the laboratory, but also bear important policy implications.
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Length: 48 pages Date of creation: 20 Mar 2008 Date of revision: Handle: RePEc:hhs:hastef:0697
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Find related papers by JEL classification: C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations D40 - Microeconomics - - Market Structure and Pricing - - - General I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
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