Are optimistic expectations keeping the Chinese happy?

Paul Frijters, Yuk Liu, Xin Meng

    Research output: Contribution to journalArticle

    Abstract

    In this paper we study the effect of optimistic income expectations on life satisfaction amongst the Chinese population. Using a large scale household survey conducted in 2002 we find that the level of optimism about the future is particularly strong in the countryside and amongst rural-to-urban migrants. The importance of these expectations for life satisfaction is particularly pronounced in the urban areas, though also highly significant for the rural area. If expectations were to reverse from positive to negative, we calculate that this would have doubled the proportion of unhappy people and reduced proportion of very happy people by 48 per cent. We perform several robustness checks to see if the results are driven by variations in precautionary savings or reverse causality.
    Original languageEnglish
    Pages (from-to)159-171
    JournalJournal of Economic Behavior and Organization
    Volume81
    Issue number1
    DOIs
    Publication statusPublished - 2012

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