IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/49364.html
   My bibliography  Save this paper

A Note on Modelling Dynamics in Happiness Estimations

Author

Listed:
  • Piper, Alan

Abstract

This short note discusses two alternative ways to model dynamics in happiness regressions. A explained, this may be important when standard fixed effects estimates have serial correlation in the residuals, but is also potentially useful when serial correlation is not a problem for providing new insights in the happiness of economics area. The note discusses modelling dynamics two ways the note discusses are via a lagged dependent variable, and via an AR(1) process. The usefulness and statistical appropriateness of each is discussed with reference to happiness. Finally, a flow chart is provided summarising key decisions regarding the choice regarding, and potential necessity of, modelling dynamics.

Suggested Citation

  • Piper, Alan, 2013. "A Note on Modelling Dynamics in Happiness Estimations," MPRA Paper 49364, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49364
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/49364/1/MPRA_paper_49364.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/49709/23/MPRA_paper_49709.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alan Piper, 2015. "Heaven knows I'm miserable now: overeducation and reduced life satisfaction," Education Economics, Taylor & Francis Journals, vol. 23(6), pages 677-692, December.
    2. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    3. David Blanchflower & Andrew Oswald & Sarah Stewart-Brown, 2013. "Is Psychological Well-Being Linked to the Consumption of Fruit and Vegetables?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 785-801, December.
    4. Stephen Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    5. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    6. McGuirk, Anya M. & Spanos, Aris, 2004. "Revisiting Error Autocorrelation Correction: Common Factor Restrictions And Granger Causality," 2004 Annual meeting, August 1-4, Denver, CO 20176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Bichaka Fayissa & Shah Danyal & J.S. Butler, 2011. "The Impact of Education on Health Status: Evidence from Longitudinal Survey Data," Working Papers 201101, Middle Tennessee State University, Department of Economics and Finance.
    8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    9. Blanchflower, David G & Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    10. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-1395, November.
    11. Piper, Alan T., 2012. "A Happiness Test of Human Capital Theory," MPRA Paper 43496, University Library of Munich, Germany.
    12. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    13. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    14. Stephen R. Bond, 2002. "Dynamic panel data models: a guide to micro data methods and practice," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 1(2), pages 141-162, August.
    15. David Roodman, 2006. "How to Do xtabond2," North American Stata Users' Group Meetings 2006 8, Stata Users Group.
    16. Piper, Alan T., 2012. "Dynamic Analysis and the Economics of Happiness: Rationale, Results and Rules," MPRA Paper 43248, University Library of Munich, Germany, revised Dec 2012.
    17. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Piper, Alan T., 2013. "Happiness, Dynamics and Adaptation," MPRA Paper 52342, University Library of Munich, Germany.
    2. Piper, Alan T., 2014. "The Benefits, Challenges and Insights of a Dynamic Panel assessment of Life Satisfaction," MPRA Paper 59556, University Library of Munich, Germany.
    3. Piper, Alan T., 2014. "Sliding down the U-shape? An investigation of the age-well-being relationship, with a focus on young adults," MPRA Paper 55819, University Library of Munich, Germany.
    4. Christiana Charalambidou & Steven McIntosh, 2021. "Over‐education in Cyprus: Micro and macro determinants, persistence and state dependence. A dynamic panel analysis," Manchester School, University of Manchester, vol. 89(2), pages 172-189, March.
    5. Piper, Alan T., 2014. "An Investigation into Happiness, Dynamics and Adaptation," MPRA Paper 57778, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Piper, Alan T., 2014. "The Benefits, Challenges and Insights of a Dynamic Panel assessment of Life Satisfaction," MPRA Paper 59556, University Library of Munich, Germany.
    2. Alan Piper, 2018. "Adult life satisfaction largely (though not wholly) contemporaneous," Discussion Papers 028, Europa-Universität Flensburg, International Institute of Management.
    3. Piper, Alan T., 2018. "Adult life satisfaction: largely (though not wholly) contemporaneous? A System General Method of Moments dynamic panel analysis," MPRA Paper 85601, University Library of Munich, Germany.
    4. Piper, Alan T., 2014. "An Investigation into Happiness, Dynamics and Adaptation," MPRA Paper 57778, University Library of Munich, Germany.
    5. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    6. Scott, K. Rebecca, 2011. "Demand and Price Volatility: Rational Habits in International Gasoline Demand," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2q87432b, Department of Agricultural & Resource Economics, UC Berkeley.
    7. Mohcine Bakhat & José M. Labeaga & Xavier Labandeira & Xiral Lñpez, 2013. "Economic Crisis and Elasticities of Car Fuels: Evidence for Spain," Working Papers fa15-2013, Economics for Energy.
    8. Scott, K. Rebecca, 2015. "Demand and price uncertainty: Rational habits in international gasoline demand," Energy, Elsevier, vol. 79(C), pages 40-49.
    9. Bakhat, Mohcine & Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "Elasticities of transport fuels at times of economic crisis: An empirical analysis for Spain," Energy Economics, Elsevier, vol. 68(S1), pages 66-80.
    10. Piper, Alan T., 2013. "Happiness, Dynamics and Adaptation," MPRA Paper 52342, University Library of Munich, Germany.
    11. Möller Joachim & Tubadji Annie, 2009. "The Creative Class, Bohemians and Local Labor Market Performance: A Micro-data Panel Study for Germany 1975–2004," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 270-291, April.
    12. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 601-620, June.
    13. Mateo Zokalj, 2016. "The impact of population aging on public finance in the European Union," Financial Theory and Practice, Institute of Public Finance, vol. 40(4), pages 383-412.
    14. Juan Federico & Joan-Lluis Capelleras, 2015. "The heterogeneous dynamics between growth and profits: the case of young firms," Small Business Economics, Springer, vol. 44(2), pages 231-253, February.
    15. Sylvester C. W. Eijffinger & Benedikt Goderis, 2008. "The Effect of Monetary Policy on Exchange Rates during Currency Crises: the Role of Debt, Institutions, and Financial Openness," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 559-575, August.
    16. Briglauer, Wolfgang, 2014. "The impact of regulation and competition on the migration from old to new communications infrastructure: Recent evidence from EU27 member states," ZEW Discussion Papers 14-085, ZEW - Leibniz Centre for European Economic Research.
    17. Derek Jones & Panu Kalmi & Mikko Mäkinen, 2010. "The productivity effects of stock option schemes: evidence from Finnish panel data," Journal of Productivity Analysis, Springer, vol. 33(1), pages 67-80, February.
    18. Castro, Vítor & Martins, Rodrigo, 2021. "Government ideology and economic freedom," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 73-91.
    19. Miriam Hortas-Rico, 2014. "Urban sprawl and municipal budgets in Spain: A dynamic panel data analysis," Papers in Regional Science, Wiley Blackwell, vol. 93(4), pages 843-864, November.
    20. Grundmann, Rainer & Gries, Thomas, 2015. "Crucial for Modern Sector Development? The Role of Exports and Institutions in Developing Countries," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112962, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Happiness; Dynamics; Lagged Dependent Variable; AR(1) process; Estimation;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:49364. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.