TY - UNPB
T1 - Economic Shocks and Subjective Well-being
T2 - Evidence from a Quasi-Experiment
AU - Hariri, Jacob Gerner
AU - Bjørnskov, Christian
AU - Justesen, Mogens Kamp
PY - 2015
Y1 - 2015
N2 - This paper 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, we examine how this monetary shock affects individuals’ evaluations of well-being. We do so by using micro-level survey data, which – incidentally – was collected in the days surrounding the devaluation. The chance occurrence of the devaluation during the time of the survey enables us to use pre-treatment 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.
AB - This paper 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, we examine how this monetary shock affects individuals’ evaluations of well-being. We do so by using micro-level survey data, which – incidentally – was collected in the days surrounding the devaluation. The chance occurrence of the devaluation during the time of the survey enables us to use pre-treatment 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.
M3 - Working paper
T3 - World Bank. Policy Research Working Papers (Online)
BT - Economic Shocks and Subjective Well-being
PB - The World Bank
CY - Washington, DC
ER -