The Impact of Inflation and Unemployment on Subjective Personal and Country Evaluations
Federal Reserve Bank of St. Louis Review, May/June 2009, 91(3), pp. 107-26
20 Pages Posted: 20 Jul 2013
Date Written: May 1, 2009
Abstract
The authors use data from the Gallup World Poll to analyze what determines individual assessments of past, present, and future personal and country well-being. These measures allow the analysis of two dimensions of happiness data not previously examined in the literature: the better-than-average effect and optimism. The authors find that individuals tend to evaluate their personal well-being as being better than their country’s and tend to expect that their future well-being will improve. The authors also analyze the impact of inflation and unemployment on these subjective measures and find that both variables have a negative effect on individuals’ assessments of past and present well-being for themselves and their country; in contrast with other studies, however, they do not find that the effect of unemployment is significantly different from that of inflation.
JEL Classification: D60, I30, E31, E24, Z13
Suggested Citation: Suggested Citation
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