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

Gandelman, Nestor and Hernandez-Murillo, Ruben, The Impact of Inflation and Unemployment on Subjective Personal and Country Evaluations (May 1, 2009). Federal Reserve Bank of St. Louis Review, May/June 2009, 91(3), pp. 107-26, Available at SSRN: https://ssrn.com/abstract=2296104 or http://dx.doi.org/10.2139/ssrn.2296104

Nestor Gandelman (Contact Author)

Universidad ORT Uruguay ( email )

Bulevar España 2633
Montevideo, 11.300
Uruguay

Ruben Hernandez-Murillo

KeyBank

Headquarters
127 Public Square 0403
Cleveland, OH 44114
United States

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