Are optimistic expectations keeping the Chinese happy?

Paul Frijters (), Amy Y.C. Liu () and Xin Meng ()

No 37, NCER Working Paper Series from National Centre for Econometric Research

Abstract: In this paper we study the e¤ect of optimistic income expectations on life satisfaction amongst the Chinese population. Using a large scale household survey conducted in 2002 we find that the level of optimism about the future is particularly strong in the countryside and amongst rural-to-urban migrants. The importance of these expectations for life satisfaction is particularly pronounced in the urban areas, though also highly significant for the rural area. If expectations were to reverse from positive to negative, we calculate that this would have doubled the proportion of unhappy people and reduced proportion of very happy people by 48%. We perform several robustness checks to see if the results are driven by variations in precautionary savings or reverse causality.

Keywords: Expectations; Happiness; Consumption and Savings; China; Political Economy (search for similar items in EconPapers)
JEL-codes: C35 D63 D91 P2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-hap, nep-soc and nep-tra
Date: 2008-11-24
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Persistent link: http://EconPapers.repec.org/RePEc:qut:auncer:2008-26

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