The goal of this dissertation is to contribute to the new field of happiness economics which over the past several decades has substantially enhanced our understanding of cognitive judgment, human behavior, and the nature of happiness. Chapter 1 starts with a discussion of the subjective approach to measuring well-being and lays the foundation for the empirical work that follows in chapters 2 and 3. This approach has a strong appeal because ancient and modern cultures, and a long tradition in philosophy, view achieving happiness as the ultimate goal of human existence. It also recognizes that humans are the best judges of their own condition. In this first chapter, I discuss some common ambiguities related to the term happiness and outline some of the most common ways in which subjective well-being (SWB)data is measured. Next, I discuss how reliable subjective well-being data is and what are some of its strengths and weaknesses in the context of economic research. Some major insights from the growing literature on happiness economics are also provided and alternative approaches to measuring quality of life (and well-being) are suggested in the last section. One puzzle in the happiness economics literature has been that although real incomes have substantially improved over the past 40 years, happiness levels in the United States have stagnated. In chapter 2, I show that the rising level of income inequality in the United States since the 1970s can explain the stagnating happiness levels of Americans. First, using subjective well-being data from the General Social Survey, I estimate the concavity of the utility function within a neo-utilitarian framework of welfare analysis and calculate the Atkinson index of inequality. Although the estimates suggests that Americans have become increasingly more inequality-averse over time, the results suggest that the concavity of the utility function alone cannot explain the happiness patterns observed in the past several decades. Once I account for the negative external cost from economic inequality, however, the empirical analysis implies that economic growth has not been sufficient to compensate for the loss of subjective well-being associated with the rising level of inequality. This is consistent with the findings of several different surveys on subjective well-being. Finally, I evaluate the equality-efficiency trade-off in the US, and discover a small and positive trade-off. Chapter 3 considers another important policy topic in recent years -- the increasing cost of college tuition and the scrutinized value of higher education. Using subjective well-being data, I show that higher education has a large non-monetary (happiness) return that goes beyond the benefit of finding a better paid and more satisfying job. A person with a high school degree, for instance, would have to earn \$41,683 more per year to be equally as happy as somebody with a college degree that has a similar socio-economic background. This large non-monetary return is associated with better marriage, health, and parenting choices, and stronger social networks that translate into higher levels of interpersonal trust. The lion's share of this non-monetary return is earned in college while the majority of the returns from graduate school are associated with higher salary. This return varies among the different subgroups of the population. Women, for example, benefit twice as much from a college education as men, and this non-monetary return has slightly increased over time. This may explain, at least partially, the increase in demand for college education over the past 30 years, and the unprecedented rise in the price of college tuition. It is hypothesized that one way in which education works is to change the attitudes, values, and behavior of students. Higher education, for example, makes students more open-minded, tolerant, and risk-averse. Evidence in support of this hypothesis is found by estimating the coefficient of risk (and inequality) aversion. Finally, using subjective well-being data from the European Value Study, the average non-monetary return from higher education is also calculated for Europeans and compared to that in the United States. Although higher education is also found to have a positive effect on happiness in Europe, the non-monetary returns are much larger in the United States. Furthermore, contrary to the United States, the direct effect of education on happiness in Europe is substantial, while the indirect effect is negligible.

Abstract Background: Many studies have demonstrated that health is a function of relative and not absolute income within populations. Canadian studies are not conclusive. There is a need for further investigation of the ‘relative income’ hypothesis in the Canadian population. Objectives: The primary objective of this research was to test the “relative income” hypothesis across Canadian health regions. The second objective was to extend the first hypothesis to consider rural versus urban populations in Canada. Methods: This research involved ecological analyses. The source of the data was the Canadian Community Health Survey, CCHS 2005 cycle 3.1. The units of analysis were health regions of Canada. Health of a region was estimated as the percentage of people who rated their health as good or excellent. The primary exposure variable was the ratio of people whose personal income was less than $15,000 relative to those reporting more than $80,000. Correlation analyses and multiple linear regressions were performed to ascertain the relationship between income inequality and health status in populations, adjusting for important covariates. Results: The measure of relative income inequality alone appeared to explain 18 per cent of the variability in the measure of health status in populations. However, after adding the measure of absolute income to the model, although 29 per cent of the variability was explained, the independent contribution of the inequality measure became non-significant. Linear regression models suggested that the absolute income variable alone could explain 30 per cent of the variance in the health status of populations. Other variables with a statistically significant contribution to the final multiple regression model were education and alcohol consumption. Rural/urban status did not change the individual relationship between relative income inequality or absolute income and the measure of health status in populations. Conclusion: Across Canadian health regions, health status in populations was a function of absolute income but not relative income. Regions with higher levels of education had better levels of self-rated health. A larger percentage of heavy drinkers was also correlated with lower population health status. The study findings have implications for public health, economic policies, and social policies. / Thesis (Master, Community Health & Epidemiology) -- Queen's University, 2008-09-17 15:32:27.341

Issues of pension viability are at the forefront of gerontological debate. The uncertainty of long-term effects of the societal aging process on public pensions and the constant public policy struggle to maintain income levels among pensioners are critical points of discussion. As existing pension policies are examined and amended, policymakers increasingly rely on experts of pension research and income inequality for policy frameworks. Gosta Esping-Andersen's (1990) Three Worlds of Welfare Capitalism has provided the seminal typology for nearly two decades. His typology consists of three regimes: liberal, conservative, and social-democratic. The purpose of this research was to examine and compare the outcomes of historical pension policy in a social-democratic nation (Finland) with pension-receiving cohorts in a comparison nation of each regime: liberal (the United States), conservative (Germany), and social-democratic (Sweden). Specific aims were: to investigate the continuing viability of Esping-Andersen's typology at a national (macro) level; to explore a new analytical approach by disaggregating the population and conducting micro analyses; and to examine the value of using more sensitive inequality indices (Atkinson and Theil) in lieu of the commonly used Gini Index. Finland provides a case study focus of the comparative analysis. Analysis of Luxembourg Income Study (LIS) data confirms that Esping-Andersen's typology remains viable at the macro level for the liberal United States. However, conservative Germany and social-democratic Sweden and Finland may be shifting their respective classifications with possible convergence of the conservative and social-democratic regimes info a European regime.

The concept of economic development has broadened to include environmental quality and population health. Interactions between income and pollution, income and health, and pollution and health have been studied separately by researchers from various disciplines. This study attempts to unify several different research strands and analyze simultaneous interactions between population health, measured by the infant mortality rate, pollution, and income in one endogenous system. Socioeconomic, racial, and rural urban disparities in infant mortality, pollution, and income are analyzed. The simultaneous equation system, estimated using the two-stage least squares method, tests whether pollution effects on infant mortality are outweighed by income effects. The study finds that income is a stronger determinant of infant mortality than pollution. Evidence for the environmental Kuznets curve is ambiguous. Disparities in infant mortality, pollution, and income are correlated with counties rural-urban status, income inequality, and ethnic diversity. Regional patterns identify wide geographical differences in levels of pollution, income, and infant mortality. The Southeast region stands out as a region with the highest infant mortality rate, relatively high levels of air pollution and chemical releases, and low per capita incomes.

The dissertation investigates the effects of real exchange rate undervaluations upon long-run economic growth and development and focuses on three issues. Rodrik (2008) claims that weak institutions hurt the development of the tradable sector more than that of the nontradable sector and that undervaluation can foster growth by diminishing the distortion created by weak institutions between the two sectors. Using the International Country Risk Guide (ICRG) dataset on four components of institutional quality, Chapter One of my dissertation examines the effects of investment profile, law and order, corruption, and bureaucratic quality upon the relative development of the tradable sector to the nontradable sector, which is measured by the ratio of industry value added to services valued added. On the basis of comparison of the two sectors, the panel evidence of 131 countries indicates that none of the four components mentioned above is positively associated with the relative development of the tradable sector to the nontradable sector. That is, the tradable sector does not suffer disproportionately (compared to the nontradable sector) from institutional weaknesses. Our results cast skepticism upon one of Rodrik's explanations on the growth-promoting effects of real undervaluation because the existence of such a distortion is not supported empirically. Chapter Two concentrates on the effect of real undervaluations on one key aspect of economic development, the income distribution. Based upon the recent availability of an undervaluation index and two databases on Gini coefficients, this study investigates how real undervaluations affect levels and changes in income inequality. The panel evidence of 136 countries indicates that real undervaluations are associated with a decline in levels of income inequality but have no significant association with changes in income inequality. Therefore, the relationship between real undervaluations and levels of income inequality is likely to stem from reverse causality. My main findings may help policymakers who attempt to use an undervaluation policy fully realize that real undervaluations will not hurt the distribution of income. Moreover, I also revisit Rodrik's growth regressions so as to investigate whether or not the same positive association between real undervaluations and economic growth held in Rodrik (2008) reoccurs in my sample. The results are somewhat mixed, depending upon which dataset is employed. Motivated by two distinct characteristics in economic performance of East Asia and Latin America in the past half century, Chapter Three explores the possibility that the difference in levels of domestic savings is one of the historical reasons that countries pursued different exchange rate policies. My panel evidence is somewhat mixed. The results based on the sample of all countries are consistent with the theoretical claim that real undervaluations can mitigate more imbalances and stimulate higher growth when the level of domestic savings is high. However, for the sample of developing countries, the results indicate that initial level of domestic savings does not matter for the growth-promoting effect of real undervaluation. On the contrary, it does matter across developed countries where internal imbalances are supposed to be less common relative to developing countries. This study suggests that more theoretical and empirical investigation is necessary in the future to disclose further the mechanism through which real undervaluations boost long-run growth.

This dissertation examined the California Music Project Teacher Training Program, which was designed to address inequities of music education in high poverty schools, support music teachers so they remained in those schools, and encourage preservice music teachers to build personal and professional capacity for work in under-resourced school environments. I viewed CMP within a broader framework of income inequality that directly impacted children, families and neighborhoods, and through those mechanisms indirectly impacted school functions and educational attainment for children. In light of a body of research on interventions in poverty and income inequality designed to stabilize school operations and thus improve children's educational attainment, I framed CMP as a similar intervention, designed to stabilize music programs and music teaching in the San Jose area. The San Jose site of CMP thus became the case of interest and I sought a broad cross-section of mentors and fellows associated with that site to inform the research. Data analysis revealed two systemic impacts on CMP schools: 1) California had low per-pupil spending overall, and in some CMP schools, per pupil spending was lower than the state average; and 2) most CMP schools were required to provide remedial instruction for large numbers of students. Due to budgetary pressures from remedial programs, there were few funds available for music programs, and due to the many students who needed remedial instruction in CMP schools, overall music enrollment was low, yet class sizes were large. The mentors were sustained in several ways by having fellows who helped in their music classrooms; however, mentors did not attribute their longevity to CMP, and several CMP mentors left their teaching positions in under-resourced schools. Prior to 2012, most fellows initially became employed as music teachers in under-resourced schools, but only a few remained in those positions.

Submitted by Bruno Teixeira (brunost@fgvmail.br) on 2010-08-08T00:49:57Z No. of bitstreams: 1 dissertacao_BST.pdf: 686654 bytes, checksum: dbe7eb1e4db75c845b33d0a1017c5910 (MD5) / Approved for entry into archive by Andrea Virginio Machado(andrea.machado@fgv.br) on 2010-08-09T11:51:33Z (GMT) No. of bitstreams: 1 dissertacao_BST.pdf: 686654 bytes, checksum: dbe7eb1e4db75c845b33d0a1017c5910 (MD5) / Made available in DSpace on 2010-08-11T12:40:57Z (GMT). No. of bitstreams: 1 dissertacao_BST.pdf: 686654 bytes, checksum: dbe7eb1e4db75c845b33d0a1017c5910 (MD5) Previous issue date: 2010-06-24 / A version of the Aiyagari (1994) model with a liquidity shock is developed in this work. The model has Huggett (1993) and Aiyagari (1994) as particular cases, but the general one allows for two assets in the economy, a liquid and an illiquid one. Using two di erent assets implies in two returns clearing the market, so the computational strategy used by Aiyagari and Hugget does not work here. Therefore, Scarf's triangulation algorithm replaces it. Our computational experiment shows that the equilibrium return of the liquid asset is smaller than the return of the illiquid one. In addition, poor people carry relatively more of the liquid asset, which is a source of inequality that is not present in the Aiyagari's work. / Neste trabalho é desenvolvida uma versão do modelo de Aiyagari (1994) com choque de liquidez. Este modelo tem Huggett (1993) e Aiyagari (1994) como casos particulares, mas esta generalização permite dois ativos distintos na economia, um líquido e outro ilíquido. Usar dois ativos diferentes implica em dois retornos afetando o 'market clearing', logo, a estratégia computacional usada por Aiyagari e Hugget não funciona. Consequentemente, a triangulação de Scarf substitui o algoritmo. Este experimento computacional mostra que o retorno em equilíbrio do ativo líquido é menor do que o retorno do ilíquido. Além disso, pessoas pobres carregam relativamente mais o ativo líquido, e essa desigualdade não aparece no modelo de Aiyagari.

Esta dissertação busca avaliar o comportamento da renda mediana e da desigualdade de rendimentos tratando o problema de seleção, através de uma abordagem ainda não utilizada em estudos semelhantes no Brasil. A metodologia empregada busca tratar o problema de seleção utilizando apenas hipóteses fracas e pautadas em argumentos econômicos, estimando os menores intervalos possíveis para a distribuição de renda da população. Os resultados obtidos mostram que as medianas dos rendimentos potenciais em 2002 e 2004 eram inferiores aos de 1996. Adicionalmente, a desigualdade de renda potencial recuou no Brasil entre 1996 e 2006. / This dissertation aims to evaluate the median income and income inequality behavior treating the selection problem with an approach not yet used in similar studies in Brazil. The present methodology tries to address the selection problem using only weak assumptions based on economic arguments, estimating the smallest possible intervals for the population income distribution. The results show that the mean potential income of 2002 and 2004 was smaller than the one of 1996. Additionally, the potential income inequality in Brazil fell from 1996 to 2006.

Este trabalho estima o efeito da polarização de renda sobre os índices de criminalidade para avaliar se a polarização é mais relevante que as medidas de desigualdade tradicionais na explicação da criminalidade. Para o cálculo da polarização foi utilizada a medida proposta por Duclos et al. (2004). Foram estimados modelos com dados de corte transversal e em painel, utilizando dados dos municípios paulistas, empregando-se modelos de auto-correlação espacial e System GMM. A principal conclusão deste trabalho é que a medida de polarização de renda tem efeito positivo e significativo sobre a taxa de crimes contra o patrimônio, assim como esperado inicialmente. Este resultado é robusto a alterações no peso do sentimento de identificação entre os indivíduos, α, e aos diferentes métodos econométricos e variáveis de renda utilizadas para calcular as medidas de desigualdade. / This paper estimates the effect of polarization of income on crime rates to assessing whether the polarization is more relevant than traditional measures of inequality in the explanation of crime. To calculate the polarization was used to measure proposed by Duclos et al. (2004). Models were estimated with cross-sectional and panel datas using models of spatial autocorrelation and System GMM. The main conclusion of this study is that the measure of income polarization has positive and significant effect on the rate of property crimes, as originally hoped. This result is robust to weight changes the feeling of identification among individuals, α, and different econometric methods and income variables used for calculate measures of inequality.

The purpose of this dissertation is to examine three distributional issues in macroeconomics. First I explore the effects fiscal federalism on economic growth across regions in China. Using the comprehensive official data set of China for 31 regions from 1952 until 1999, I investigate a number of indicators used by the literature to measure federalism and find robust support for only one such measure: the ratio of local total revenue to local tax revenue. Using a difference-in-difference approach and exploiting the two-year gap in the implementation of a tax reform across different regions of China, I also identify a positive relationship between fiscal federalism and regional economic growth. The second paper hypothesizes that an inequitable distribution of income negatively affects the rule of law in resource-rich economies and provides robust evidence in support of this hypothesis. By investigating a data set that contains 193 countries and using econometric methodologies such as the fixed effects estimator and the generalized method of moments estimator, I find that resource-abundance improves the quality of institutions, as long as income and wealth disparity remains below a certain threshold. When inequality moves beyond this threshold, the positive effects of the resource-abundance level on institutions diminish quickly and turn negative eventually. This paper, thus, provides robust evidence about the endogeneity of institutions and the role income and wealth inequality plays in the determination of long-run growth rates. The third paper sets up a dynamic general equilibrium model with heterogeneous agents to investigate the causal channels which run from a concern for international status to long-run economic growth. The simulation results show that the initial distribution of income and wealth play an important role in whether agents gain or lose from globalization.