Bernard M.S. van Praag

Bio: Bernard M.S. van Praag is an academic researcher from University of Amsterdam. The author has contributed to research in topics: Welfare & Poverty. The author has an hindex of 42, co-authored 99 publications receiving 7048 citations. Previous affiliations of Bernard M.S. van Praag include Erasmus University Rotterdam & Leiden University.

Using happiness surveys to value intangibles: the case of airport noise

Abstract: We assess the monetary value of the noise damage, caused by aircraft noise nuisance around Amsterdam Airport, as the sum of hedonic house price differentials and a residual cost component. The residual costs are assessed from a survey, including an ordinal life satisfaction scale, on which individual respondents have scored. The derived compensation scheme depends on, among other things, the objective noise level, income, the degree to which prices account for noise differences, and the presence of noise insulation.

The poverty line: Concept and measurement

Abstract: In this paper, a new approach to defining the poverty line is proposed in which family heads are asked what they consider a minimal income level for their own family. It was found that the respondents appeared to specify higher amounts, the greater their actual income and family size, and that the relationship was loglinear. For each family size there is an income level at which a respondent's stated minimum income is equal to his actual income. This level is taken as a definition of the poverty line. The poverty line thus defined varies with family size.

A parametric analysis of prospect theory’s functionals for the general population

Abstract: This article presents the results of an experiment that completely measures the utility function and probability weighting function for different positive and negative monetary outcomes, using a representative sample of N = 1,935 from the general public. The results confirm earlier findings in the lab, suggesting that utility is less pronounced than what is found in classical measurements where expected utility is assumed. Utility for losses is found to be convex, consistent with diminishing sensitivity, and the obtained loss-aversion coefficient of 1.6 is moderate but in agreement with contemporary evidence. The estimated probability weighting functions have an inverse-S shape and they imply pessimism in both domains. These results show that probability weighting is also an important phenomenon in the general population. Women and lower educated individuals are found to be more risk averse, in agreement with common findings. In contrast to previous studies that ascribed gender differences in risk attitudes solely to differences in the degree utility curvature, however, our results show that this finding is primarily driven by loss aversion and, for women, also by a more pessimistic psychological response toward the probability of obtaining the best possible outcome.

What Can Economists Learn from Happiness Research

Abstract: Over the past few years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation affect happiness as well as how institutional factors, in particular the type of democracy and the extent of government decentralization, systematically influence how satisfied individuals are with their life. We discuss some of the consequences for economic policy and for economic theory.

Will raising the incomes of all increase the happiness of all

Abstract: Today, as in the past, within a country at a given time those with higher incomes are, on average, happier. However, raising the incomes of all does not increase the happiness of all. This is because the material norms on which judgments of well-being are based increase in the same proportion as the actual income of the society. These conclusions are suggested by data on reported happiness, material norms, and income collected in surveys in a number of countries over the past half century.