Markov switching models for happiness in New-Zealand during the pandemic

A new GLO Discussion Paper determines the factors that could increase happiness in New Zealand during the pandemic to ensure rapid restoration of levels before the Covid-19 shock. Results show that the country is in an unhappy state which is lasting longer than predicted.

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GLO Discussion Paper No. 573, 2020

Markov switching models for happiness during a pandemic: The New-Zealand experience Download PDF
Rossouw, Stephanie & Greyling, Talita & Adhikari, Tamanna & Morrison, Phillip S.

GLO Fellows Talita Greyling & Stephanie Rossouw

Author Abstract: This paper estimates Markov switching models with daily happiness (GNH) data from New Zealand for a period inclusive of the Covid-19 global health pandemic. This helps us understand the dynamics of happiness due to an external shock and provides valuable information about its future evolution. Furthermore, we determine the probabilities to transition between states of happiness and estimate the duration in these states. In addition, as maximizing happiness is a policy priority, we determine the factors that increase happiness, especially during the pandemic to ensure rapid restoration of happiness levels post the Covid-19 shock. The results show New Zealand is currently in an unhappy state which is lasting longer than predicted. To increase the happiness levels to pre-pandemic levels, policymakers could allow free mobility, create economic stimuli, and allow international travel between New Zealand and low-risk Covid-19 countries.

More from the GLO Coronavirus Cluster

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.


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