Economic Shocks and Subjective Well-Being: Evidence from a Quasi-Experiment
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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.
Originalsprog | Engelsk |
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Tidsskrift | The World Bank Economic Review |
Vol/bind | 30 |
Udgave nummer | 1 |
Sider (fra-til) | 55-77 |
ISSN | 0258-6770 |
DOI | |
Status | Udgivet - 2015 |
ID: 50310195