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Journal Article

Is happiness contagious? Separating spillover externalities from the group-level social context


Publication date

Jun 2015


We investigate whether individuals feel happier when others
around them are happier in broadly defined worker groups. This will be a formal
test of spillovers in happiness. Answering this question requires a careful
handling of the reflection problem, as it may not be possible to separate the
endogenous spillover effects from contextual effects unless an appropriately
designed identification strategy is employed. Implementing such a strategy and
using the 2008 release of the British Housing Panel Survey, we show that the
group-level happiness does not have a statistically significant endogenous
effect on individual-level happiness in the Great Britain. We report, however,
statistically significant contextual effects in various dimensions including
age, education, employer status, and health. These results suggest that higher
group-level happiness does not spill over to the individual level in neither negative nor positive sense, while the individual-level happiness is instead
determined by social context (i.e., the group-level counterparts of certain
observed covariates). We also test the relevance of the “Easterlin paradox” and
find that our result regarding the effect of income on happiness—controlling
for social interactions effects—is the group-level analogue of Easterlin’s
original results.

Published in

Journal of Happiness Studies

Volume and page numbers

16 , 719 -744





Well Being and Social Psychology


Not held in Research Library - bibliographic reference only


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