Competition and well-being: does market competition make people unhappy?

Justina A. V. Fischer

No 697, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Empirical research on the role of economic institutions for subjective well-being is still widely lacking, while recent economic-experimental outcomes suggest that experienced utility may depend on the intensity of market competition. This paper is the first to empirically analyze the implication of market competition for subjective well-being using real-life survey data on 80,000 individuals in more than 60 countries from the World Values Survey 1997-2001. In support of our hypothesis, we find that market competition aggravates the impact of individual’s bargaining position in economic transactions on her subjective well-being – compared to the least powerful in society. Put differently, we find that market competition enlarges the happiness differences caused by cleavages in socio-economic position. Our results also suggest that competition induced welfare changes are not gender-specific, while a stronger rule of law appears to prevent the generation of such additional benefits or losses. Particularly the latter results call for further economic-experimental corroboration in the laboratory, but also bear important policy implications.

Keywords: Subjective well-being; happiness; utility; competition; rule of law; completeness of contract; laboratory experiment; World Values Survey (search for similar items in EconPapers)
JEL-codes: C99 D02 D40 I31 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2008-03-20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0697

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