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Evolutionary efficiency and distributive effects of inertia in cross-country life-satisfaction

Abstract : This paper is broadly concerned with understanding the role of evolutionary efficiency in happiness realization. Towards this end, we examine the (distributive and) non-linear effects of inertia in a cross-country setting. We develop a general model of happiness inertia and study its properties in a stochastic and non-linear environment. This allows us to map out the net effects of evolutionary efficiency through ’adaptive capability’ in an environment where stochastic shocks are both mean reverting and non mean-reverting. Our empirical estimation for a set of developed economies demonstrate that the adjustment of realized happiness to a stochastic non-mean reverting shock is non-linear implying the involvement of complex socio-economic processes in happiness perception. Moreover, we also find that the adjustment of current level of happiness to the past follows a heterogeneous distribution once again indicating that the extent of temporal (inter-)dependence is non-unique across the happiness distribution. Our results hold interesting policy implications.
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https://hal.univ-lorraine.fr/hal-01741858
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Submitted on : Friday, March 23, 2018 - 2:51:17 PM
Last modification on : Friday, September 23, 2022 - 4:34:39 AM

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  • HAL Id : hal-01741858, version 1

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Tapas Mishra, Mamata Parhi, Claude Diebolt. Evolutionary efficiency and distributive effects of inertia in cross-country life-satisfaction. Economies et Sociétés. Série AF, Histoire Economique Quantitative, 2014, 49, pp.1335-1356. ⟨hal-01741858⟩

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