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The Asymmetric Effects of Macroeconomic Performance on Happiness: Evidence for the EU

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  • Edsel L. Beja

    (Ateneo de Manila University)

Abstract

An analysis of data from the Eurobarometer finds evidence of the asymmetric effects of macroeconomic performance on happiness. The evidence reveals that the negative effect of an economic recession on happiness can be at least twice the positive effect of economic growth. In short, a single year of recession can undo the happiness gains from years of economic growth. Moreover, while this evidence focuses on a short-run asymmetry, it nonetheless supports the Easterlin paradox of a nil relationship between macroeconomic performance and happiness. The evidence indicates that stable rather than rapid economic growth is a more sensible target for policymakers, because macroeconomic stability can lead to conditions that allow the pursuit of happiness and thus secure greater well-being.

Suggested Citation

  • Edsel L. Beja, 2017. "The Asymmetric Effects of Macroeconomic Performance on Happiness: Evidence for the EU," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 52(3), pages 184-190, May.
    • Handle: RePEc:spr:intere:v:52:y:2017:i:3:d:10.1007_s10272-017-0670-y
    DOI: 10.1007/s10272-017-0670-y
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    Cited by:

    1. Edsel L. Beja Jr., 2018. "Testing the easterlin paradox: Results and policy implications," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(2), pages 79-83, September.
    2. Beja, Edsel Jr., 2019. "Consumer Expectations Survey and Quarterly Social Weather Survey: Evidence of Convergent Validity and Causality," MPRA Paper 101074, University Library of Munich, Germany.
    3. David Patiño & Francisco Gómez-García & Alejandro Marín-Serrano, 2022. "Subjective Well-Being and Aversion to Macroeconomic Losses: New Evidence," Journal of Happiness Studies, Springer, vol. 23(2), pages 359-375, February.
    4. Beja, Edsel Jr., 2018. "Testing the Easterlin Paradox: Results and Policy Implications," MPRA Paper 101075, University Library of Munich, Germany.
    5. Iban Ortuzar & Gemma Renart & Angels Xabadia, 2021. "Effects of Public Healthcare Budget Cuts on Life Satisfaction in Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(1), pages 311-337, July.

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    More about this item

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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