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|contributor.advisor||Scandizzo, Pasquale Lucio||-|
|description.abstract||The aim of this work is twofold. Firstly, we add some new empirical evidence about concepts and socio-economic determinants of happiness, by introducing either some definitions of happiness or some new explanatory variables (risk aversion, perceived level of inflation and unemployment, perceived quality of public services) not considered before in the literature. One original feature of this first part of the work is also the attempt to put together these two branches of economic literature on concepts and socio-economic determinants of happiness. Secondly, we try to model the effects of virtuous behaviour on happiness and satisfaction. We are interested in those consumption choices of material goods, monetary donations and altruistic behaviour that lead individuals to reach the maximum level of happiness and satisfaction over their lifetimes.
In order to reach the first objective, we formulate a questionnaire that allows us either to ask what are the concepts of happiness that individuals share, or to look for the determinants of happiness. By following the conceptual referent theory of happiness (CRT) of Rojas (2005), we focus on some concepts of happiness (pleasure, virtue, tranquillity, life satisfaction, self-realization and human flourishing and the practice of virtue) considered by the author, adding some other concepts (fortune, harmony, bliss and laetitia) we believe useful for our purpose. We then divide the different theories of happiness into two categories: those based on the hypothesis of the existence of happiness produced by external entities, and those based on the hypothesis of an endogenous process of internal bliss.
Besides these two groups of definitions of happiness we introduce two questions about happiness as desires and important events in life. Desires can be grouped as wishes for material objects (money, house), desire for more free time, or satisfaction with what one has achieved in life. We do the same for events: to buy a house is considered an objective event, to take a degree or to overcome a difficulty is considered a personal achievement, and to marry and have children are thought of as relational events. For people choosing different events or desires, we try to identify which are the determinants of happiness and satisfaction.
What we find is that for people having objective concepts of happiness, income and job are significant variables, while for persons who prefer subjective concepts of happiness income is not significant. This outcome emerges also when we consider people’s preference for objective and subjective desires. In the first situation income is significant, while it is not in the second hypothesis.
Our results are in line with theoretical predictions. Income, employment, marital status, some relational goods and altruism produce a positive effect on the probability of being very happy. Education and age, on the contrary, have a negative effect, due for the age variable to the prevalence of middle-aged persons in our sample, and for education to the strong correlation with income. The curvilinear relation between happiness and income also appears to be confirmed. An explanation of this result is given by the presence in our sample of a number of students, with a low income. A new piece of evidence we have obtained is that relative to risk aversion: people who are risk averse are less happy.
We also find evidence of the importance of relational goods as a source of happiness in the sample of those interviewed. Not only did the family emerge as the first source of happiness in their lives, but family, friends and sex were also the most frequently chosen aspects classified as “very important” and “quite important” in individuals’ lives. This confirms the results present in literature (Bruni and Stanca 2006, Becchetti et al. 2006).
The second purpose of our work is to show the implications of altruism and accumulation of virtuous capital on individual behaviour. We are interested in those consumption choices of material goods, monetary donations and altruistic behaviour that lead individuals to reach the maximum level of happiness and satisfaction. By using the concepts of consumption capital and addictional goods we model virtuous behaviour and introduce it as an argument of the utility function. By virtuous behaviour we mean an altruistic conduct that manifests itself with monetary donations and involvement in volunteering organizations. We consider donations as addictional goods: past donations influence the satisfaction individuals obtain from what is given today, thanks to the virtuous capital accumulated.
Our reference model is that of Scandizzo (1992), which analyses the relation between cultural goods and economic growth. While Scandizzo introduces cultural goods consumption as a control variable, we focus our attention on monetary donations. In particular, they determine a double effect on the utility function. On the one hand, monetary donations directly influence an individual’s utility because they appear as an explanatory variable in the utility function; on the other hand, they indirectly influence an individual’s utility by raising the stock of virtuous capital. Moreover, the higher the stock of virtuous capital, the greater the satisfaction individuals will receive from future donations. Consumption of material goods also raises an individual’s utility. However a trade-off exists between donations and material goods consumption, given the wealth constraint. A higher stock of virtuous capital also allows the individual to obtain more pleasure from material goods consumption, and it can influence the amount of material goods consumed, or the composition of the bundle. The effect on an individual’s utility function is therefore difficult to establish, because of the opposite effect determined by the stock of virtuous behaviour. The model is quite complex and difficult to solve. It is not well-behaved and the system of differential equations we obtain after the dynamic optimization is tricky.
However, given the features of monetary donations, we find that they change over time, by responding to the following needs: i) to replace the stock of virtuous capital lost by delaying its production because of time preferences; ii) to account for the fact that donations are a substitute for material goods consumption in generating utility; iii) to take advantage of the positive externalities that accumulating virtues generates for utility. In particular, they are inversely related to the net rate of time preference and the marginal utility of virtuous capital, while the complementarity between d and V determines the opposite effect on the rate of growth of donations.
With respect to the consumption of material goods, it grows with the rate of return on wealth, while it decreases with the rate of time preferences. A higher ρ determines greater possibilities of consumption of material goods. An increase in the rate of time preferences makes today’s material goods consumption more expensive. Complementarity between x and V produces a positive effect on the rate of growth of x, while marginal utility of material goods decreases as the quantity of x rises.
Finally, we empirically check the testable version of the two differential equations, introducing also socio-economic variables as regressors. The intuitions of our model are confirmed. We find that the return on wealth positively affects both material goods consumption and monetary donations, while the rate of interest negatively affects the two independent variables. Finally, we obtain that in the median term people engaged in volunteering activities have a consumption higher by 20,8% with respect to individuals not involved in those kinds of activities, while in the median term people engaged in volunteering activities make donations higher by 42,47% with respect to individuals not involved in those activities.||en|
|subject.classification||SECS-P/01 Economia politica||en|
|title||Testing theories on happiness: a survey and a model||en|
|degree.name||Dottorato in teoria economica e istituzioni||en|
|degree.discipline||Facoltà di economia||en|
|degree.grantor||Università degli studi di Roma Tor Vergata||en|
|Appears in Collections:||Tesi di dottorato in economia|
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