Abstract

http://ssrn.com/abstract=1064261
 
 

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Macroeconomics and Life Satisfaction: Revisiting the 'Misery Index'


Heinz Welsch


University of Oldenburg; ZenTra - Center for Transnational Studies


Journal of Applied Economics, Vol. 10, No. 2, pp. 237-251, November 2007

Abstract:     
Using data from surveys of life satisfaction, evidence has been presented that European citizens' subjective well-being is inversely related to inflation and unemployment. Motivated by the Barro Misery Index, this paper reconsiders the relationship between macroeconomics and subjective well-being by including the growth rate and the long-term interest rate as additional variables in life satisfaction regressions. The paper finds that people care about growth and employment on the one hand and stability on the other, where stability may alternatively be captured by the inflation rate or the long-term interest rate. Stability, measured in whichever of these ways, does not seem to be less important to European citizens than growth and employment.

Keywords: misery index, social welfare function, inflation, unemployment, subjective wellbeing, life satisfaction

JEL Classification: E61, I31

Accepted Paper Series


Not Available For Download

Date posted: December 6, 2007  

Suggested Citation

Welsch, Heinz, Macroeconomics and Life Satisfaction: Revisiting the 'Misery Index'. Journal of Applied Economics, Vol. 10, No. 2, pp. 237-251, November 2007. Available at SSRN: http://ssrn.com/abstract=1064261

Contact Information

Heinz Welsch (Contact Author)
University of Oldenburg ( email )
Oldenburg, D-26111
Germany
ZenTra - Center for Transnational Studies ( email )
Ammerländer Heerstraße 138
Oldenburg, 26131
Germany
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