Wellbeing Reading List

We asked the World Wellbeing Panel (WWP) panelists to nominate 5 relevant papers in the wellbeing literature that they believed should be added to our Wellbeing Reading List. The nominations are in, and from now until the end of 2022, we will disclose the 24 most-nominated papers.

Papers will be revealed two at a time, starting with those that had the fewest nominations and using the number of citations in 2021 (according to Google Scholar) when there are ties.

The Wellbeing Reading List is managed by WWP panelist Daniela Andrén (Örebro University) and the managing committee of the World Wellbeing Panel.

Please use the hashtag #WellbeingReadingList on social media to share and comment on the papers.

May 2022

13.

Kahneman, D., P. Wakker, and R. Sarin (1997). Back to Bentham? Explorations of Experienced Utility. The Quarterly Journal of Economics 112(2), 375-406.

Total google scholar citations: 2764

This paper formalized and argued for two different concepts of utility, namely decision and experienced utility, as introduced by Benthman before the marginal revolution. This made the paper an important milestone for the wellbeing literature in transitioning from a 1980s economic point of view (wherein people are super-rational and thus make decisions based on how they will feel about the outcomes) to a more modern behavioural point of view where it is an empirical question whether people's decisions are based on ultimate outcome maximisation. It also alerted the field to the question whether we should count as important what people on reflection think about their life or how they experience it in the moment. The paper also argues for the measurability, with direct questions, of utility. This paper has therefore been very central to the life satisfaction literature.

14.

Luttmer, E.F.P. (2005). Neighbors as negatives: relative earnings and wellbeing. . The Quarterly Journal of Economics, 120(3), 963-1002.

Total google scholar citations: 2757

The two papers of the May reading list were published in the Quarterly Journal of Economics, but while the first paper is largely theoretical, this is an empirical paper. This is one of the first papers to examine the importance of relative concerns by means of a life satisfaction question. Using individual data on wellbeing and information about local average earnings, this paper finds that individuals report lower levels of wellbeing if, everything else constant, their neighbours have higher earnings.

April 2022

The two articles of the Wellbeing Reading List of the month of April focus on aspects related to the importance of unemployment with regard to its negative impact on happiness.

15.

Winkelmann, L., & Winkelmann, R. (1998). Why are the unemployed so unhappy? Evidence from panel data. Economica, 65(257), 1-15.

Total Google Scholar citations in 2021: 2256

This paper focuses on own unemployment. It examined the impact that own unemployment has on happiness using a panel setting with individual fixed effects. The authors find a strong negative correlation of happiness with unemployment. Following this paper, there has been growing evidence not only on the negative impact of unemployment on happiness, but most important, on examining the mechanisms behind this correlation.

16.

Di Tella, R., MacCulloch, R.J., and Oswald, A.J. (2001). Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness. American Economic Review, 91, 335-341.

Total Google Scholar citations in 2021: 2319

This paper represented an important contribution to the literature; it examined for the first time the impact of macro-economic conditions, other than GDP, on happiness. While there were some papers examining the importance of GDP, this paper was the first to focus on other macro-economic indicators to show the importance of unemployment in the country or region. Specifically, it focused on the trade-offs between inflation and unemployment rate, in terms of wellbeing to conclude that unemployment rate has a much larger correlation subjective wellbeing than inflation. While growth shows a much weaker correlation, unemployment has a significant impact on happiness. This is in line with the literature (see paper 15) on the impact of own unemployment in happiness. This paper uses a two step model to show robust standard errors.

March 2022

17.

Blanchflower, David G., and Andrew J. Oswald. (2008). Is Well-being U-shaped over the life cycle? Social science & medicine, 66.8, 1733-1749.

Total Google Scholar citations in 2021: 2073

This paper is one of the first to examine how wellbeing evolves over time, while controlling for other variables that also vary over the life cycle, such as income, labor market status or family composition. This paper presents evidence of wellbeing being U-shaped through life with a minimum in the middle age. The authors argue that they can disentangle the age from the cohort effect. They find the same U-shape with age for mental health. More recent papers have confirmed and explore the channels that explain this U-shaped correlation (Schwandt, 2016, JEBO, 122:75-87), while Frijters and Beatton (2012, JEBO, 82: 525-542) have found that the downturn in mid-life looks much less pronounced when accounting for selectivity, and that there is a large downturn at the end of life when people lose health and approach death. So the whole-life trajectory is more like a wave.

18.

Van Praag, B. M. S., Frijters, P., & Ferrer-i-Carbonell, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior & Organization, 51(1), 29.

Total Google Scholar citations in 2021: 1199

This paper presented a full model of wellbeing in which, for the first time, a two-layer model was proposed. In this model, wellbeing depends on the different subjective domain satisfactions (such as health, financial situation, job, leisure, housing, and environment) which, in turn, depend on individual or household objectively measurable variables, such as age, income, or family composition.

February 2022

Both papers this month are the first ones in the literature to examine the causal relationship between individual circumstances (income and relative income) and satisfaction.

19.

Card, D., Mas, A., Moretti, E., & Saez, E. (2012). Inequality at work: The effect of peer salaries on job satisfaction. American Economic Review, 102, 2981-3003.

Total Google Scholar citations in 2021: 1040

This paper is the first to causally examine the importance of relative comparisons for workers’ satisfaction and their job search intentions. In contrast with the 20th paper on the Wellbeing Reading List, this one does not derive from a natural experiment. Instead the authors developed an experiment based on a randomized manipulation of access to information. The treatment group are those employees who were informed about the existence of a web page in which they could search for the pay of other university employees. Those employees with salaries below the median reported lower job and pay satisfaction as well as an increase in the likelihood of looking for a new job. Those with salaries above the median experienced no significant change in pay satisfaction or reported job search.

20.

Frijters, P., Haisken-DeNew, J.P., & Shields, M.A. (2004). Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification. American Economic Review, 94, 730-740.

Total Google Scholar citations in 2021: 786

This paper was the first to examine the causal impact between income and life satisfaction in East Germany by exploiting the reunification of Germany. This unanticipated change provides an exogenous and large income increase in East Germany that allows the authors to estimate the causal impact of income on different outcomes. The methodology accounts for fixed individual traits. The authors document that household income increase by 60% between 1990 and 2001, explaining 35–40 percent of the within-covariates variation in life satisfaction. This is a substantial impact.

January 2022

21.

Luechinger, S. (2009). Valuing air quality using the life satisfaction approach. The Economic Journal, 119, 482–515.

Total Google Scholar citations in 2021: 570

This paper was among the first to use a life satisfaction questions from survey data, combined with administrative data on pollution, to estimate the monetary value of a non-market good, air quality. Luechinger suggested that because the life satisfaction data contain useful information on individuals’ preferences and hedonic experience of public goods, the life satisfaction approach expands economists’ toolbox in the area of non-market valuation, complementing the methods to monetarise non-market good for cost benefit analysis and policy design.

See also the WWP December 2021 survey on the WELLBY cost-benefit methodology

22.

Diener, E (1984). Subjective Well-Being. Psychological Bulletin, 95, 542–575.

Total Google Scholar citations in 2021: 5

Professor Diener is one of the best-known happiness scholars and his article was his first paper in subjective wellbeing. The paper reviews the literature since 1967 and ends by setting the priorities for future research, notably emphasizing the need to combine data with theoretical prepositions and to integrate the different theories.

We lost Professor Diener in 2021. See the July 2021 World Wellbeing Panel survey dedicated to his work and his memory: Is happiness a way of life, shared with others?

December 2021 

The 23rd and 24th papers in the Wellbeing Reading List were written by three psychologists. The 24th paper was written in 1989, a time in which the use of self-reported happiness was yet not widespread in social sciences.

23.

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55, 68-78.

Total Google Scholar citations in 2021: 48,388

This paper focuses on psychological health and examines the factors that enhance (rather than undermine) intrinsic motivation and wellbeing: competence, autonomy, and relatedness. In contrast, the paper finds that excessive control, nonoptimal challenges, and lack of connectedness reduces individual initiative and responsibility and leads to distress and ill wellbeing. This paper is very relevant to those individuals that have strong influence on others’ behaviors, e.g. parents and educators, and managers as mentioned by Ryan and Deci.

24.

Ryff, C. D. (1989). Happiness is everything, or is it? Explorations on the meaning of psychological well-being. Journal of Personality and Social Psychology, 57, 1069-1081.

Total Google Scholar citations in 2021: 18,167

This paper uses survey data to operationalize what constitutes positive psychological functioning with six dimensions (self-acceptance, positive relations with others, autonomy, environmental mastery, purpose in life, and personal growth) and empirically estimate its importance on determining life satisfaction and six other measures of wellbeing. This is, a multidimensional model of psychological wellbeing. Ryff argues that these measures of psychological wellbeing represent more enduring life challenges than happiness. Ryff concluded that the most recurrent criterion for positive well-being has been the individual's sense of self acceptance or self-esteem.