Ng, Y. K. (1996). Happiness surveys: Some comparability issues and an exploratory survey based on just perceivable increments. Social Indicators Research, 38(1), 1-27.

Most questionnaires to obtain reports of happiness are primitive with the results obtained of low (interpersonal) comparability. This paper argues that happiness is intrinsically cardinally measurable and comparable though with many difficulties. Moreover, a sophisticated questionnaire was developed and used to obtain more accurate and interpersonally comparable reports of happiness based on the concept of just perceivable increments of pleasure/pain. Comparisons with the traditional questionnaire are also made (by the respondents) to show the superiority of the sophisticated questionnaire.

 

 

Ng, Y. K. (1996). Happiness surveys: Some comparability issues and an exploratory survey based on just perceivable increments. Social Indicators Research, 38(1), 1-27.

https://doi.org/10.1007/BF00293784

 

 

Stutzer, A. (2004). The role of income aspirations in individual happiness. Journal of Economic Behavior &Organization, 54(1), 89-109.

Does individual well-being depend on the absolute level of income and consumption or is it relative to one’s aspirations? In a direct empirical test, it is found that higher income aspirations reduce people’s utility, ceteris paribus. Individual data on reported satisfaction with life are used as a proxy measure for utility, and income evaluation measures are applied as proxies for people’s aspiration levels. Consistent with processes of adaptation and social comparison, income aspirations increase with people’s income as well as with the average income in the community they live in.

 

 

Stutzer, A. (2004). The role of income aspirations in individual happiness. Journal of Economic Behavior &Organization, 54(1), 89-109.

https://doi.org/10.1016/j.jebo.2003.04.003

 

Schneider, F., &Enste, D. H. (2000). Shadow economies: size, causes, and consequences. Journal of economic literature, 38(1), 77-114.

Using various methods, the size of the shadow economy in 76 developing, transition, and OECD countries is estimated. Average size varies from 12 percent of GDP for OECD countries, to 23 percent for transition countries and 39 percent for developing countries. Increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy, especially in OECD countries. According to some findings, corruption has a positive impact on the size of the shadow economy, and a growing shadow economy has a negative effect on official GDP growth.

 

 

Schneider, F., &Enste, D. H. (2000). Shadow economies: size, causes, and consequences. Journal of economic literature, 38(1), 77-114.

DOI: 10.1257/jel.38.1.77

 

Von Hagen, J., &Wolff, G. B. (2006). What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU. Journal of Banking &Finance, 30(12), 3259-3279.

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. [Milesi-Ferretti, G., 2003. Good, bad or ugly? On the effects of fiscal rules with creative accounting, Journal of Public Economics, 88, 377–394] develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this depends on the reputation cost for the government and the economic cost of sticking to the rule. We provide empirical evidence of creative accounting in the European Union. We find that the SGP rules have induced governments to use stock-flow adjustments, a form of creative accounting, to hide deficits. The tendency to substitute stock-flow adjustments for budget deficits is especially strong for the cyclical component of the deficit, as in times of recession the cost of reducing the deficit is particularly large.

 

 

Von Hagen, J., &Wolff, G. B. (2006). What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU. Journal of Banking &Finance, 30(12), 3259-3279.

https://doi.org/10.1016/j.jbankfin.2006.05.011

 

Frey, B. S., &Kirchgässner, G. (1993). Diskursethik, politische oekonomie und volksabstimmungen. Analyse &Kritik, 15(2), 129-149.

First, the approaches of ‘Diskursethik’ (Discourse ethics) and of Modern Political Economy are described. While the latter investigates political decision processes, the former is concerned with the discourse process which takes place before a decision is made. This is shown by using referenda as an example. The discourse which takes place before referenda obviously does not conform to the ideal conditions defined in Diskursethik, but discourse and decisions in the context of referenda come nearer to the intentions of Diskursethik and Political Economy than other decision procedures which are used in representative democracies.

 

 

Frey, B. S., &Kirchgässner, G. (1993). Diskursethik, politische oekonomie und volksabstimmungen. Analyse &Kritik, 15(2), 129-149.

https://doi.org/10.1515/auk-1993-0205 

Bohnet, I., &Frey, B. S. (1994). Direct‐democratic rules: the role of discussion. Kyklos, 47(3), 341-354.

Referenda and initiatives are hardly considered as democratic devices for a future Europe. Drawing on experimental evidence and empirical findings for Switzerland, the authors argue that direct democracy performs well for the provision of public goods and redistribution as it institutionalizes the political discussion. Communication induces the citizens to transform a public decision into a private choice and to break the politician’s agenda-setting monopoly: relevant alternatives are no longer exogenously given but emerge in a process of deliberation. This process is needed in a European framework if social dilemmas and redistribution problems are to be solved according to the citizens’ preferences.

 

 

 

Bohnet, I., &Frey, B. S. (1994). Direct‐democratic rules: the role of discussion. Kyklos, 47(3), 341-354.

https://doi.org/10.1111/j.1467-6435.1994.tb02742.x

 

 

Frey, B. S. (2006). Giving and receiving awards. Perspectives on Psychological Science, 1(4), 377-388.

Awards in the form of orders, medals, decorations, prizes, and titles are ubiquitous in monarchies and republics, private organizations, and not-for-profit and profit-oriented firms. Nevertheless, this kind of nonmaterial extrinsic incentive has been given little attention in the social sciences, including psychology. The demand for awards relies on an individual’s desire for distinction, and the supply of awards is governed by the desire to motivate. The technique of analytic narratives is used to show that a number of empirically testable propositions about awards are consistent with observable data.

 

Frey, B. S. (2006). Giving and receiving awards. Perspectives on Psychological Science, 1(4), 377-388.

https://doi.org/10.1111/j.1745-6916.2006.00022.x

 

Henrich, J., &Gil-White, F. J. (2001). The evolution of prestige: Freely conferred deference as a mechanism for enhancing the benefits of cultural transmission.

This paper advances an “information goods” theory that explains prestige processes as an emergent product of psychological adaptations that evolved to improve the quality of information acquired via cultural transmission. Natural selection favored social learners who could evaluate potential models and copy the most successful among them. In order to improve the fidelity and comprehensiveness of such ranked-biased copying, social learners further evolved dispositions to sycophantically ingratiate themselves with their chosen models, so as to gain close proximity to, and prolonged interaction with, these models. Once common, these dispositions created, at the group level, distributions of deference that new entrants may adaptively exploit to decide who to begin copying. This generated a preference for models who seem generally “popular.” Building on social exchange theories, we argue that a wider range of phenomena associated with prestige processes can more plausibly be explained by this simple theory than by others, and we test its predictions with data from throughout the social sciences. In addition, we distinguish carefully between dominance (force or force threat) and prestige (freely conferred deference).

 

 

Henrich, J., &Gil-White, F. J. (2001). The evolution of prestige: Freely conferred deference as a mechanism for enhancing the benefits of cultural transmission. Evolution and human behavior, 22(3), 165-196.

https://doi.org/10.1016/S1090-5138(00)00071-4 

 

Luttmer, E. F. (2005). Neighbors as negatives: Relative earnings and well-being. The Quarterly journal of economics, 120(3), 963-1002.

This paper investigates whether individuals feel worse off when others around them earn more. In other words, do people care about relative position, and does “lagging behind the Joneses” diminish well-being? To answer this question, I match individual-level data containing various indicators of well-being to information about local average earnings. I find that, controlling for an individual’s own income, higher earnings of neighbors are associated with lower levels of self-reported happiness. The data’s panel nature and rich set of measures of well-being and behavior indicate that this association is not driven by selection or by changes in the way people define happiness. There is suggestive evidence that the negative effect of increases in neighbors’ earnings on own well-being is most likely caused by interpersonal preferences, that is, people having utility functions that depend on relative consumption in addition to absolute consumption.

 

 

Luttmer, E. F. (2005). Neighbors as negatives: Relative earnings and well-being. The Quarterly journal of economics, 120(3), 963-1002.

https://doi.org/10.1093/qje/120.3.963