How Important is Methodology for the Estimates of the Determinants of Happiness?

19 Pages Posted: 20 Jul 2004

See all articles by Ada Ferrer-i-Carbonell

Ada Ferrer-i-Carbonell

Institut d'Anàlisi Econòmica (IAE-CSIC), Barcelona

Paul Frijters

Queensland University of Technology - School of Economics and Finance

Abstract

Psychologists and sociologists usually interpret happiness scores as cardinal and comparable across respondents, and thus run OLS regressions on happiness and changes in happiness. Economists usually assume only ordinality and have mainly used ordered latent response models, thereby not taking satisfactory account of fixed individual traits. We address this problem by developing a conditional estimator for the fixed-effect ordered logit model. We find that assuming ordinality or cardinality of happiness scores makes little difference, whilst allowing for fixed-effects does change results substantially. We call for more research into the determinants of the personality traits making up these fixed-effects.

Suggested Citation

Ferrer-i-Carbonell, Ada and Frijters, Paul, How Important is Methodology for the Estimates of the Determinants of Happiness?. Economic Journal, Vol. 114, No. 497, pp. 641-659, July 2004. Available at SSRN: https://ssrn.com/abstract=559289

Ada Ferrer-i-Carbonell (Contact Author)

Institut d'Anàlisi Econòmica (IAE-CSIC), Barcelona ( email )

Barcelona, Bellaterra 08193
Spain

Paul Frijters

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia
(07) 3864 9364 (Phone)
(07) 3864 1500 (Fax)

HOME PAGE: http://www.bus.qut.edu.au/paulfrijters/index.jsp

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