Economic transition and happiness and life satisfaction in Algeria, Egypt and Morocco A thesis ...

222 Pages·2012·1.91 MB·English

Economic transition and happiness and life
satisfaction in Algeria, Egypt and Morocco

A thesis submitted for the degree of
Doctor of Philosophy

by
Ikram Djiar

School of Social Sciences
Brunel University
September 2011
Abstract
The present research aims at examining the interaction between transition from
centrally planned economies to market based economies and its subsequent effects
on populations‟ happiness and life satisfaction in Algeria, Egypt and Morocco. It also
aims at advising policy makers on how economic policies may affect population‟s
subjective well-being. It is widely accepted that economic reforms affect individuals‟
lives. In contrast, the populations‟ values, attitudes and perceptions may also play a
major role in the success of these reforms. The first study examines the determinants
of happiness and life satisfaction by gender in Algeria and their attitudes and
perceptions towards economic policies‟ reforms. The survey reports that the female
population in Algeria is happier and more satisfied with life than its male
counterpart. It has been found that healthier individuals and those in the medium
level of income are most likely to be happier and satisfied with their lives. Also,
happiness is inversely “U-shaped” in age for the female population contradicting
previous studies. Although, both genders believe that rapid market reforms do not
have a negative impact on national stability, and are confident with the major
companies, privatisation is found to be most likely having a negative effect on the
life satisfaction among the male population. The second study examines the changes
in the levels of life satisfaction in Egypt and Morocco over the first decade of the
present century. It has been found that Egyptian women‟ satisfaction with life is “U-
shaped” in age, whereas in income that applies only to those at the medium, upper-
medium and high levels of income. By contrast, Egyptian men are satisfied at all
income levels. In Morocco, unemployed men and women are found to be satisfied
with their lives in the beginning of the decade contradicting previous findings. While
in the late 2000s, among the employed populations, females and males at the medium
and the upper medium levels of income are satisfied, along with the lower level for
women and the higher level for men. The third study examines the effect of relative
income on individuals‟ self-reported life satisfaction, assuming that the individual‟s
subjective judgement of his or her life satisfaction depends on both absolute and
relative incomes. Absolute refers to the individual‟s income, relative is the income of
others around him or her called a reference group. The findings are that Algerians
and Moroccans feel ambitious when self-reporting their levels of life satisfaction and
referring their income to others‟ income, but Egyptians feel jealous.
Contents

Acknowledgments ................................................................................................................... iv
Abbreviation ............................................................................................................................ v
List of tables ............................................................................................................................ vi
List of figures ........................................................................................................................ viii
Chapter 1: Introduction ............................................................................................................ 1
1.1. Introduction: .................................................................................................................. 2
1.2. Aims and objectives: ................................................................................................... 10
1.3. Research questions: ..................................................................................................... 11
1.4. Thesis structure: .......................................................................................................... 12
Chapter 2: Background and literature review ........................................................................ 13
2.1. The historical development of happiness: ................................................................... 14
2.2. The development of the concept of utility in modern economics: .............................. 19
2.3. The resurgence of utility in economics: ...................................................................... 22
2.4. The concept of happiness, its measurment and shortcomings: ................................... 23
2.5. Empirical literature on macroeconomic happiness: .................................................... 31
Chapter 3: The determinants of happiness and life satisfaction in Algeria by gender as a
proviso for the success of its economic reforms .................................................................... 42
Abstract: ................................................................................................................................. 43
3.1 Introduction .................................................................................................................. 43
3.2 Literature review: ......................................................................................................... 51
3.3 Background of the Algerian economy: ........................................................................ 57
3.4. Data and descriptive statistics: .................................................................................... 65
3.4.1. Data: ..................................................................................................................... 65
3.4.2. Descriptive statistics: ........................................................................................... 69
3.5. The empirical model: ................................................................................................ 799
3.6. Results and analysis: ................................................................................................. 797
3.6.1. Determinants of Happiness: ............................................................................... 877
3.6.2. Determinants of Life Satisfaction: ....................................................................... 90
3.7 Conclusion: .................................................................................................................. 94
Chapter 4: Transition and life satisfaction in Egypt and Morocco over the first decade of the
the present century ................................................................................................................. 97
Abstract ................................................................................................................................ 988
4.1. Introduction: .............................................................................................................. 988
4.2. The economic development of Egypt and Morocco: ................................................ 102
ii
4.3. Data and descriptive statistics: .............................................................................. 11313
4.3.1. Data: ............................................................................................................... 11313
4.3.2. Descriptive statistics: ......................................................................................... 116
4.4. The empirical model: ............................................................................................ 12525
4.5. Results and analysis: ............................................................................................. 12527
4.6 Conclusion: ............................................................................................................ 13333
Chapter 5: Ambition versus Jealousy in MENA: the effect of relative income on life
satisfaction ........................................................................................................................... 136
Abstract: ............................................................................................................................. 1377
5.1. Introduction: ............................................................................................................ 1377
5.2. Literature review and background: ......................................................................... 1399
5.3. Data: ........................................................................................................................ 1477
5.3.1. Descriptive statistics: ......................................................................................... 150
5.4. The empirical model: .............................................................................................. 1566
5.5. Results and analysis: ............................................................................................. 16161
5.6. Conclusion: ............................................................................................................. 1677
Chapter 6: Conclusion .......................................................................................................... 168
6.1. Conclusion: ............................................................................................................... 169
6.2. Recommendations to policy makers: ........................................................................ 171
6.3. Areas for further researches: ..................................................................................... 176
6.3. Limitations and shortcomings: .................................................................................. 177
Bibliography ........................................................................................................................ 178
Appendices ........................................................................................................................... 203
Appendix 1: ...................................................................................................................... 203
Appendix 2: ...................................................................................................................... 207
Appendix 3:………………………...…………………………………………………..210

iii
Acknowledgments

Producing the present piece of work has been one of the most important challenges
in my life. A PhD thesis is a unique experience, in which one can feel isolated and
left out in many ways. My supervisors Yannis Georgellis and Matthew Rablen
helped me to overcome all obstacles. Without their patience and continuous
guidance, I would have never reached the present moment to be able to write these
words. Therefore, I would like to show my gratitude and appreciation to them for
being present and supportive in difficult moments, and for tolerating my altering
attitude at different stages of the process of completing this thesis.
Also, the realisation of the present thesis would not have been possible without the
support, the understanding, sympathy and appreciation of Dany Nobus, the head of
School of Social Sciences at Brunel University. I would like to express my thanks
and gratitude in these simple but profound words.
Likewise, John Bennett, Ray Barrell, Fabio Spagnolo, John Hunter, Charles Grant,
Stephen Mullins, Ushma Gudka, Amreen Malik, Sally Trevor, Ann Courtney, Tom
Garvey were all supportive and show sympathy in difficult moments. I would like to
demonstrate appreciation and thanks to all of them.
Special thanks also go to Nick Tsitsanis, Vurain Tabvuma, Mick Brooks, Ali
Tescuman, Ioannis Bournakis, Paul Alison, Craig Enders, Puhani Patrick, Claudia
Senik, Richard Williams, Raphael DiTella, Peter Sanfey, John Hudson, Yacine
Belghitar, M‟hamed, Houseein, Rotimi, Basset, Gholam, Nathalie Van Meurs and
David Kernohan for their precious advices. The few suggestions during the moments
I consulted them were significantly productive. I would like to show my appreciation
to all of them.
The present thesis is dedicated to the most important persons in my life. My parents,
sisters and brothers are without doubts those who were my constant supporters in
every step of the completion of the present work. Their comforting, cheering,
consoling and supporting words illuminated the continuous determination to reach
this present moment. I would like to thank all of them and show my love and
gratitude with these few words.
Last but not least, the psychological support and friendship of Riad, Choukri, Adel,
Amandine, Selma, Sheila, Nesrine, Lamia and Ghanou cannot be forgotten. Isolation
from the social world while focusing on completing the present thesis would have
been intolerable without their constant presence. I owe my deepest gratitude to them.

iv
Abbreviation

BHPS: The British Housing Panel Survey
EU: The European Union
EVS: The European Value Survey
GSOEP: The German Socio-Economic Panel (Sozio-Oekonomisches Panel)
GSS: The General Social Survey
IFIs: International Financial Institutions
IMF: International Monetary Fund
KHPS: The Keio Household Panel Survey
MENA: Middle East and North Africa
RLMS: The Russian Longitudinal Monitoring Survey
SAPs: Structural Adjustment Programs
SHP: The Swiss Household Panel
SWB: Subjective Well-Being
UN: United Nations
W-B: Well-Being, and also wellbeing
WB: World Bank
WVS: The World Value Survey
v
List of tables

3.1 Survey‟s Age distribution by Gender in Algeria (2002)………………….........69
3.2 Feeling of Happiness by Gender in Algeria (2002)…………………………....70
3.3 Life Satisfaction by Gender in Algeria (2002)………………………………....71
3.4 Aim of Country by Algerian by Gender (2002)…………………………….....73
3.5 Aim of Algerians‟ Respondents by Gender (2002)…………………………....73
3.6 Most Important for Algerians by Gender (2002)……………………………....74
3.7 Effect of Rapid Market Reforms on National Stability according to Algerians…75
3.8 Effect of Market Reforms by Gender in Algeria (2002)………………………..76
3.9 Algerians Respondents‟ Confidence in Major Companies by Gender………….76
3.10 Private versus State Ownership of Business in Algeria by Gender (2002)…….77
3.11 Variables used in the empirical modelling…………………………………….86
3.12 Children are a Need for Women‟s fulfilments in Algeria (2002)……………......88
3.13 Happiness and Life Satisfaction in Algeria (2002) (Ordered Probit)……………93
4.1 Life Satisfaction in Egypt and Morocco (waves 4-5)…………………………117
4.2 Aim of Country for Egyptians and Moroccans (waves 4-5)………………….119
4.3 Most Important for Egyptians and Moroccans (waves 4-5)…………………..120
4.4 Aim of Egyptian and Moroccan Respondents (waves 4-5)…………………...121
4.5 Egyptians‟ and Moroccans‟ Confidence in Major Companies (waves 4-5)…..121
4.6 Private versus State Ownership of Business in Egypt and Morocco………….122
4.7 Competition, Good or Harmful for Egyptians and Moroccans (waves 5)…….123
4.8 Life Satisfaction in Egypt (2000/2008) Ordered Probit …..…………………..131
4.9 Life Satisfaction in Morocco (2001/2007) Ordered Probit ………….…………132
5.1 Satisfaction with Households‟ Income in Egypt and Morocco (waves 4-5)…….151
5.2 Income Inequality in Egypt and Morocco (waves 4-5)………………………...153
5.3 Income Distribution in Egypt and Morocco……………………………………154
5.4 Wealth Accumulation in Egypt and Morocco (wave 5)………………………155

vi
5.5 Relative Income in Algeria, Egypt and Morocco (OLS) (waves 4 and 5)…….165
5.6 Life Satisfaction and Relative Income in Algeria, Egypt and Morocco…......166

vii
List of figures

3.1 GDP growth versus Oil prices (1980-2008)………………………………………..58
3.2 GDP Growth (%) versus Oil Prices (1990-2001)…………………………………..60
3.3 Inflation and Unemployment in Algeria (1989-2008)…………………………….....62
3.4 GDP Growth per Capita (PPP) versus Oil Prices (1980-2008)……………………..63
3.5 Happiness and life satisfaction by gender in Algeria (2002)……………..………72
4.1 Inflation and Unemployment in Egypt (1980-2008) (Current International $)………106
4.2 GDP growth (%) and GDP/Capita (%) in Egypt (1980-2008)…………….………107
4.3 GDP per Capita in Egypt (1980-2008)…………………………………………..…108
4.4 GDP growth and GDP/Capita in Morocco (1980-2008)………………………..…109
4.5 Inflation and Unemployment in Morocco (1980-2008) (Current International $) 110
4.6 GDP per Capita (PPP) in Morocco (1980-2008)………………………………..….112

viii
Chapter 1: Introduction