Wu Co-Authors Paper in Review of Economics and Statistics
November 14, 2011
Associate Professor of Economics Stephen Wu's paper "Well-Being Across America" (co-authored with Andrew Oswald, University of Warwick) has been published in the November 2011 issue of the Review of Economics and Statistics (volume 93, number 4, pages 1118-1134).
This paper uses Behavioral Risk Factor Surveillance System data to study life satisfaction and mental health across the states of the USA. The analysis draws upon a sample of 1.3 million citizens. Initially we control for people’s personal characteristics (though not income). There is no correlation between states’ regression-adjusted well-being and their GDP per capita. States like Louisiana and DC have high psychological well-being levels; California and West Virginia have low well-being. When we control for people’s incomes, satisfaction with life is lower in richer states – just as compensating-differentials theory would predict. Nevertheless, some puzzles remain.