Understanding fixed effects in human well-being
Boyce, Christopher J.. (2009) Understanding fixed effects in human well-being. Journal of Economic Psychology, 31 (1). pp. 1-16. ISSN 0167-4870
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Official URL: http://dx.doi.org/10.1016/j.joep.2009.08.009
In studies of subjective well-being, economists and other researchers typically use a fixed or random effect estimation to control for unobservable heterogeneity across individuals. Such individual heterogeneity, although substantially reducing the estimated effect of many characteristics, is little understood. This paper shows that personality measures can account for 20% of this heterogeneity and a further 13% can be accounted for by other observable between-person information. This paper then demonstrates that the use of personality measures, in a new technique developed by [Plumper, T., Troeger, V.E. (2007). Efficient estimation of time-invariant and rarely changing variables in finite sample panel analyses with unit fixed effects, Political Analysis, 15(2), 124-139.], can help researchers obtain improved estimates for important characteristics such as marital status, disability and income. The paper argues that this has important practical implications.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HB Economic Theory
B Philosophy. Psychology. Religion > BF Psychology
|Divisions:||Other > Institute of Advanced Study
Faculty of Science > Psychology
|Library of Congress Subject Headings (LCSH):||Deutsches Institut für Wirtschaftsforschung. Projektgruppe "Das Sozio-ökonomische Panel", Satisfaction -- Research, Personality, Conduct of life, Consumer satisfaction -- Research|
|Journal or Publication Title:||Journal of Economic Psychology|
|Official Date:||6 September 2009|
|Page Range:||pp. 1-16|
|Access rights to Published version:||Open Access|
|Funder:||Economic and Social Research Council (Great Britain) (ESRC)|
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