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Economic Shocks on Subjective Well-Being: Re-assessing the Determinants of Life-Satisfaction After the 2008 Financial Crisis

Author

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  • Aurelie Charles

    (University of Bath)

  • Dongxu Wu

    (Transcontinental Research Institute)

  • Zhongmin Wu

    (Nottingham Trent University)

Abstract

The paper investigates the extent to which life-satisfaction is biased by peer-comparison by looking at the relative value attached to the different domains of life-satisfaction, as suggested by Easterlin (Economics and happiness: framing the analysis, Oxford University Press, New York, 2005), by social group. We postulate that group membership influences the ranking of the satisfaction domains affecting subjective well-being which allows individuals to go back to their individual threshold over time. Using ordered probit models with random effects, the evidence for professional (self-employed vs. employee) and social (male vs. female) groups using the British Household Panel Survey and Understanding Society—UK Household Longitudinal Study from 1996 to 2014 shows that the ranking of the satisfaction domains is group-based suggesting a “keeping up with the Joneses” effect linked to the housing bubble.

Suggested Citation

  • Aurelie Charles & Dongxu Wu & Zhongmin Wu, 2019. "Economic Shocks on Subjective Well-Being: Re-assessing the Determinants of Life-Satisfaction After the 2008 Financial Crisis," Journal of Happiness Studies, Springer, vol. 20(4), pages 1041-1055, April.
    • Handle: RePEc:spr:jhappi:v:20:y:2019:i:4:d:10.1007_s10902-018-9986-y
    DOI: 10.1007/s10902-018-9986-y
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    2. Junpeng Li & Puneet Vatsa & Wanglin Ma, 2023. "Small Acts With Big Impacts: Does Garbage Classification Improve Subjective Well-Being in Rural China?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(3), pages 1337-1363, June.
    3. Alnafrah, Ibrahim & Belyaeva, Zhanna, 2024. "The nonlinear road to happiness: Making sense of ESGD impacts on well-being," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 365-381.
    4. David G. Blanchflower & Carol L. Graham, 2022. "The Mid-Life Dip in Well-Being: a Critique," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 287-344, May.
    5. Zhang, Qi & Gong, Jian & Wang, Ying, 2024. "How resilience capacity and multiple shocks affect rural households’ subjective well-being: A comparative study of the Yangtze and Yellow River Basins in China," Land Use Policy, Elsevier, vol. 142(C).
    6. Luciana Méndez, 2020. "So Dissatisfied to Leave? The Role of Perceptions, Expectations and Beliefs on Youths’ Intention to Migrate: Evidence from a Developing Country," Journal of Happiness Studies, Springer, vol. 21(8), pages 2981-3006, December.
    7. Eleftherios Giovanis, 2022. "The effects of international migration on well-being of natives and immigrants: evidence from Germany, Switzerland and the UK," SN Business & Economics, Springer, vol. 2(6), pages 1-33, June.
    8. Mahendru, Mandeep & Sharma, Gagan Deep & Pereira, Vijay & Gupta, Mansi & Mundi, Hardeep Singh, 2022. "Is it all about money honey? Analyzing and mapping financial well-being research and identifying future research agenda," Journal of Business Research, Elsevier, vol. 150(C), pages 417-436.
    9. Tinghui Li & Junhao Zhong & Mark Xu, 2019. "Does the Credit Cycle Have an Impact on Happiness?," IJERPH, MDPI, vol. 17(1), pages 1-19, December.
    10. Li, Junpeng & Ma, Wanglin & Gong, Binlei, 2023. "Market participation and subjective well-being of maize farmers," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 941-960.

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    More about this item

    Keywords

    Panel data; Subjective well-being; Financial crisis; Group behaviour;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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