Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39619
Authors: 
DiTella, Rafael
MacCulloch, Robert
Oswald, Andrew J.
Year of Publication: 
1999
Series/Report no.: 
ZEI working paper B 03-1999
Abstract: 
A large literature in macroeconomics assumes a social objective function, W(p, U), where inflation, p, and unemployment, U, are bads. This paper provides some of the first formal evidence for such an approach. It uses data on the reported well-being levels of approximately one quarter of a million randomly sampled Europeans and Americans from the 1970's to the 1990's. After controlling for personal characteristics, year dummies and country fixed effects, we find that the data trace out a W(p, U) function. It is approximately a linearly additive "misery index". The paper calculates the implied dollar value of a low inflation rate. It also examines the structure of happiness equations across countries and time.
Document Type: 
Working Paper

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