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

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

World Bank Group, Washington, DC

关键词: subjective well-being;    economic shocks;    currency devaluation;    quasi-experiment;   

DOI  :  10.1596/1813-9450-7209
RP-ID  :  WPS7209

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 developing countries. Using the case of a sudden and unanticipated currency devaluation in Botswana as a quasi-experiment, the article examines how this monetary shock affects individuals' evaluations of well-being. This is done by using microlevel survey data, which—incidentally—were collected in the days surrounding the devaluation. The chance occurrence 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. 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.