Intertemporal material deprivation: a proposal and an application to EU countries

in Dasgupta, Indraneel; Mitra, Manipushpak (Eds.) Deprivation, Inequality and Polarization: Essays in Honour of Satya Ranjan Chakravarty (2019)

This paper analyzes the effects of the inclusion of past experiences in measuring current material deprivation. The method followed generalizes the proposal of Bossert, Ceriani, Chakravarty and D'Ambrosio ... [more ▼]

This paper analyzes the effects of the inclusion of past experiences in measuring current material deprivation. The method followed generalizes the proposal of Bossert, Ceriani, Chakravarty and D'Ambrosio (2014) by adapting the class of indices on the measurement of poverty over time of Dutta, Roope and Zank (2013). An application to the analysis of material deprivation within EU countries is then provided. Following the path of material deprivation experienced by each individual over time yields a picture which differs from that in the annual results. Since the measurement of material deprivation is used by the EU member states and the European Commission to monitor national and EU progress in the fight against poverty and social exclusion, the results suggest that time cannot be neglected. Countries should not only be compared based on their year-by-year results, but additional information is gained by following individuals over time and producing an aggregate measure once dynamic considerations are taken into consideration. [less ▲]

Unfairness at Work: Well-Being and Quits

in Labour Economics (2018), 51

We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective ... [more ▼]

We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective future job quitting. In six waves of German Socio-Economic Panel data, the extent to which own labour income is perceived to be unfair is significantly negatively correlated with subjective well-being, both in terms of cognitive evaluations (life and job satisfaction) and affect (the frequency of feeling happy, sad and angry). Perceived unfairness also translates into objective labour-market behaviour, with current unfair income predicting future job quits. [less ▲]

Estimating the Mental Health Effects of Social Isolation

in Applied Research in Quality of Life (2016), 11

It is frequently hypothesized that feelings of social isolation are detrimental for an individual's mental health, however standard statistical models cannot estimate this effect due to reverse causality ... [more ▼]

It is frequently hypothesized that feelings of social isolation are detrimental for an individual's mental health, however standard statistical models cannot estimate this effect due to reverse causality between the independent and dependent variables. In this paper we present endogeneity-corrected estimates of the mental health consequences of isolation (based on self-assessed loneliness scores) using Australian panel data. The central identification strategy comes from a natural source of variation where some people within our sample are required by work or study commitments to move home. This relocation may break individuals' social ties, resulting in significantly higher reported feelings of loneliness and consequently may lower mental health scores. The method gives results that are significant, robust and pass a battery of diagnostic tests. Estimates indicate that feelings of isolation have large negative consequences for psychological well-being, and that the effects are larger for women and older people. The results suggest that at current levels, a 10% reduction applied to all individuals would reduce annual expenditure on mental illness in Australia by approximately $3B AUD, or around $150 AUD per person. [less ▲]

An Overview of Intertemporal Measures of Individual Well-Being: Can They Explain Life Satisfaction Better?

in Tachibanaki, Toshiaki (Ed.) Advances in Happiness Research: A Comparative Perspective (2016)

Traditional economic modeling has neglected the basic fact that individual well-being depends on one’s own life course and on comparisons with others. These assumptions have been challenged by an ... [more ▼]

Traditional economic modeling has neglected the basic fact that individual well-being depends on one’s own life course and on comparisons with others. These assumptions have been challenged by an increasing number of contributions in the income-distribution literature on the measurement of individual well-being. These have proposed various indices which allow different aspects of past experiences to be brought into the analysis of the phenomenon under consideration. This chapter is a review of these measures with the aim of offering some guidance to the recent developments of the parallel literature on happiness. [less ▲]

Adaptation to Poverty in Long-Run Panel Data

in Review of Economics and Statistics (2016), 98

We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to ... [more ▼]

We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation. [less ▲]

Growing up during a financial crisis: The effect of family financial distress on child development

in SOLIDAR (Ed.) Progressive Structural Reforms. Proposals for European reforms to reduce inequalities and promote jobs, growth and social investment (2015)

Poverty Profiles and Well-Being: Panel Evidence from Germany

in Research on Economic Inequality (2015), 23

We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three ... [more ▼]

We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. Second, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of years in poverty, satisfaction is lower when the years are linked together. As such, poverty persistence reduces well-being. These effects differ by population subgroups. [less ▲]

Richness Orderings

in Journal of Economic Inequality (2014), 12

An index of richness in a society is a measure of the extent of its affluence. This paper presents an analytical discussion on several indices of richness and their properties. It also develops criteria ... [more ▼]

An index of richness in a society is a measure of the extent of its affluence. This paper presents an analytical discussion on several indices of richness and their properties. It also develops criteria for ordering alternative distributions of income in terms of their richness. Given a line of richness, an income level above which a person is regarded as rich, and depending on the redistributive principle, it is shown that the ranking relation can be implemented by seeking dominance with respect to the generalized Lorenz curve of the rich or the affluence pro file of the society. When the line of richness is assumed to be variable, we need to employ the stochastic dominance conditions for ordering the income distributions. [less ▲]

Intertemporal Material Deprivation

in Betti, Gianni; Lemmi, Achille (Eds.) Poverty and Social Exclusion (2014)

Individual well-being is multidimensional and various aspects of the quality of life need to be jointly considered in its measurement. The literature on the subject has proposed many indices of ... [more ▼]

Individual well-being is multidimensional and various aspects of the quality of life need to be jointly considered in its measurement. The literature on the subject has proposed many indices of multidimensional poverty and deprivation and explored the properties that are at the basis of these measures. The purpose of this chapter is to add intertemporal considerations to the analysis of material deprivation. We employ the EU-SILC panel data set, which includes information on different aspects of well-being over time. EU countries are compared based on measures that take this additional intertemporal information into consideration. If we follow the path of material deprivation experienced by each individual over time we obtain a picture which differs from the annual results. Since the measurement of material deprivation is used by the EU member states and the European Commission to monitor national and EU progress in the fight against poverty and social exclusion, our results suggest that time cannot be neglected. Countries should not only be compared based on their year by year results but additional information is gained by following individuals over time and producing an aggregate measure once time is taken into account. [less ▲]

The Distribution of Economic Insecurity: Italy and the USA over the Great Recession

in Review of Income and Wealth (2014), 60(S1), 33-52

We estimate the distribution of economic insecurity in Italy and the USA using data from 1994 to 2010. Economic insecurity for each individual is assumed to depend on both current wealth and the changes ... [more ▼]

We estimate the distribution of economic insecurity in Italy and the USA using data from 1994 to 2010. Economic insecurity for each individual is assumed to depend on both current wealth and the changes in wealth that have been experienced in the past. The first element plays the role of the buffer stock that can be relied on in the case of an adverse future event. The second element reflects the individual's confidence in his ability to overcome any losses in the future. With respect to this second element, experiences in the recent past are given greater weight than experiences that occurred in the more distant past. The results confirm that the great recession has had a dramatic effect on the distribution of economic insecurity in both countries with the effect being much stronger in the USA. [less ▲]