Abstract of PhD Thesis

An economic assessment of the determinants of quality of life

Finbarr Brereton (2006), University College Dublin

The principal objective of this thesis is to create a greater understanding of the determinants of individual well-being, over and above the traditional economic indicators, such as individual or household income and objective living conditions. The literature suggests that socio-economic and socio-demographic characteristics of individuals have profound effects on subjective well-being. Employment status and marital status are two of these characteristics, but several categories of both have been all but ignored in the literature to date. Moreover, the role of location-specific factors in explaining life satisfaction has only recently started being explored and several methodological difficulties exist. This thesis extends the current literature to examine the welfare impacts of additional employment status categories on well-being, including part-time employment, disconnection from the labour force, and being disabled, unable to work. It expands the current research on family formation by examining the impact of adult support in the household on well-being especially in relation to lone parents. A particular focus of the thesis is on advancing understanding of the relationship between location-specific factors and subjective well-being. These factors include climate, environmental and other amenities. Statistical analysis of an Irish dataset is carried out using Ordinary Least Squares (OLS) and Ordered-Probit models. To address the methodological difficulty of linking individuals spatially to their surroundings, a Geographic Information Systems (GIS) approach is used. Data on climate, environmental and other amenities/ disamenities are geo-referenced and merged with the socio-economic and demographic data to provide a spatial dataset, which is analysed econometrically. New insight in this thesis show that being long-term unemployed, disabled and unable to work, or in part-time employment has a significant negative effect on life satisfaction, particularly for males. Additionally, the large negative effect of being a single parent on life satisfaction, found in the literature, is present only in households in which there are no other adults. It also shows that while socio-economic and demographic variables are relevant, consideration of amenities such as climate, environmental and urban conditions, typically employed in hedonic wage and housing regressions, is important when analyzing subjective well-being and their effect on quality of life does not seem to be fully captured by compensating differentials in housing and labour markets as assumed in the hedonic literature. For example, while proximity to disamenities such as landfill sites directly affects well-being, the disamenity value of living close to hazardous waste facilities is fully compensated for in housing and labour markets. Finally, through the use of GIS techniques, the thesis proposes a solution to the methodological difficulty of linking individuals more accurately to their surrounding environment.