Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111043
Authors: 
Chadi, Adrian
Year of Publication: 
2015
Series/Report no.: 
IAAEU Discussion Paper Series in Economics 03/2015
Abstract: 
This empirical study investigates if people's concerns about the euro currency affect their life satisfaction. A minority of very concerned individuals appear to be unhappy, which cannot be explained by personality or other observable factors typically affecting well-being. As a novelty, this investigation exploits exogenous variation in reported concerns by using the intensity of media coverage on the euro crisis with its extraordinary events throughout the year 2011 as an instrument. Results from the application of several empirical approaches confirm that there is an effect from being concerned about the euro on people's satisfaction with life. The first potential explanation is that perceived economic insecurity works as a transmission channel, but this is not fully supported by the empirical evidence. A second explanation suggests that political beliefs and euro-skeptic attitudes are at play and may trigger unhappiness as a consequence of a perceived lack of representation in German politics. In line with this argument, a regional analysis links the variation in unhappiness among concerned citizens to the actual votes for Germany's first major anti-euro party in the subsequent federal elections.
Subjects: 
life satisfaction
euro crisis
currency
concerns
political protest
sensitive information
media coverage
instrumental variable
SOEP
JEL: 
D72
H11
I31
Document Type: 
Working Paper

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