Individual Satisfaction and Economic Growth in an Agent-Based Economy

João Silvestre (), Tanya Araújo and Miguel Aubyn ()
Additional contact information
João Silvestre: University of Lisbon

Computational Economics, 2019, vol. 54, issue 3, No 3, 893-903

Abstract: Abstract We combine macro and microeconomic perspectives in an agent-based endogenous growth model that uses individual satisfaction as a driver of human capital accumulation. The micro perspective is based on individual satisfaction: an utility function computed from the income variation in space (relative to others) and time. The macro perspective emerges from micro decisions that, at an aggregate level, determine an important social decision about the share of the working population engaged in producing ideas (i.e. skilled workers). Underlying our analysis is the Easterlin hypothesis (Easterlin, in: David, Melvin (eds) Nations and households in economic growth: essays in Honor of Moses Abramowitz, Academic Press, New York, 1974, J Econ Behav Organ 27(1):35–47, 1995) which states that individuals care much more about their relative income than about increases in their own income, weakening the link between growth and income. Simulations show that growth and satisfaction levels are higher when relative and absolute incomes are equally weighted in satisfaction computation and are lower when satisfaction only depends on relative incomes.

Keywords: Agent modeling; Education; Human capital; Economic growth; Individual satisfaction (search for similar items in EconPapers)
JEL-codes: C63 E24 E70 O40 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10614-018-9855-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:compec:v:54:y:2019:i:3:d:10.1007_s10614-018-9855-0

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/10614/PS2

DOI: 10.1007/s10614-018-9855-0

Access Statistics for this article

Computational Economics is currently edited by Hans Amman

More articles in Computational Economics from Springer, Society for Computational Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().