Economic Shocks and Subjective Well-Being : Evidence from a Quasi-Experiment

Hariri, Jacob Gerner ; Bjø ; rnskov, Christian ; Justesen, Mogens K.

Published by Oxford University Press on behalf of the World Bank

关键词: CURRENCY;    DEVALUATION;    MONETARY SHOCKS;    MACROECONOMIC SHOCKS;    WELL-BEING;   

DOI  :  10.1093/wber/lhv004

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This article examines how economic shocks affect individual well-being in developingcountries. Using the case of a sudden and unanticipated currency devaluation inBotswana as a quasi-experiment, we examine how this monetary shock affects individuals’ evaluations of well-being. We do so by using microlevel survey data, which—incidentally—were collected in the days surrounding the devaluation. The chanceoccurrence of the devaluation during the time of the survey enables us to use pretreatment respondents, surveyed before the devaluation, as approximate counterfactuals for post-treatment respondents, surveyed after the devaluation. Our estimates show that the devaluation had a large and significantly negative effect on individuals’ evaluations of subjective well-being. These results suggest that macroeconomic shocks, such as unanticipated currency devaluations, may have significant short-term costs in the form of reductions in people’s sense of well-being.