Impact Of Opinion On Satisfaction With Present State Of Economy In Country: Analysis Using ESS Round 8, 2016 – United Kingdom

Aim

Importance of happiness caused by satisfaction in economy is growing. This is reflected in the number of articles displayed in famous business articles that take into account satisfied with present state of economy in country (SPSE) and its determinants (Bryman, 2016). This document contains a detailed description of this literature. The focus is on articles published in journals since 2010, as well as some important reviews on economy. There are indications that poor health, separation, unemployment and lack of social contacts are closely related to SPSE. However, the assessment raises a number of problems in identifying the causes of SPSE. These include conflict data, concerns about the impact of potentially undiscovered variables, and lack of confidence in the cause. This article should resolve some of these issues when multiple panel data is displayed. However, economists are increasingly concerned that preferences often fail to provide a good indication of satisfaction with economy associated with the consequences of choices and alternative forms of thinking and use (Pittau, Zelli, and Gelman, 2010). The self-reported usage scales are better known in economy. SPSE is often used by economists as a generic term for our economic thinking and feeling of satisfaction.

Aim: The primary objective of the present research was to assess the impact of opinion on Standard of living of unemployed and Government should reduce differences in income levels on satisfaction with present state of economy in country.

Job satisfaction, comprehensive sociological and industrial literature economy and the theory of alienation have been investigated by relatively few economists. First, neglect of parity in job earning reflects professional suspicions of what can be termed subjective variables. The purpose of this document is to examine these problems and to evaluate the effect of living standard of unemployment in labour market analysis. The document begins with a brief description of the satisfaction issues associated with large employee surveys, and then takes into account the use of satisfaction with state of economy as a dependent variable.

From a utilitarian point of view, this document discusses income inequality through the impact on the individual and its subjective satisfaction with economy. Data from the European Social Survey for United Kingdom, round 8 in 2016 assess whether the distribution of monetary resources has a difference due to income differences. Unlike most studies in this field, it focuses on perceived and tries to understand how basic social processes become subjective representations of satisfaction with economy, attention to cognitive mechanisms that can be similar to the cause and how income inequality affects someone’s subjective satisfaction with economy.

Instead of a decision-based approach, the detection of preferences of SPSE brings the satisfaction with economy of a person to a general assessment of their life. Although several changes are correlated with SPSE performed in economic literature, they are usually dependent on many small studies where the list of factors related to interests of the society. Therefore, the scholar focuses on research of the large dataset where several factors can be considered and monitored. There are two techniques to find a strategy. The first is to review all the research works that have examined the elements of SPSE published in financial journals from 2010 to January 2016 including subjective prosperity and satisfaction in life due to economic condition in the country. While it is necessary to satisfy certain aspects of prosperity and to understand the wellbeing, although, these are not perfect measures of economic wellbeing and are therefore not the focus of this work.

Conceptual Framework

The conceptual framework was constructed to be merged with the relevant indicators in previous literatures and to interpret the relationship between them. Devereux, Michael and Alan Sutherland (2011) developed a method for simple approach to calculating country portfolios in dynamic models of macro-general equilibrium. Chauvin, Glaeser, Ma, and Tobio, (2017) found that relation between spatial equilibrium and economic development, which focused on disparity in human capital. Unemployed people are negatively linked to the satisfaction of life, even when it is monitored for income fluctuations. Schröder in 2018 looked at the inconvenience of the unemployed and distinguished between long term income inequality and country wise income inequality for predicting life satisfaction in the empirical results of hybrid regression with World Values survey. The longitudinal research for UK, Australia, and Germany reflected that satisfaction was unaffected by inequality in income.  The subjective well-being is in fact much more sensitive to the fluctuations in unemployment than the public sector employees (Luechinger, Meier, and Stutzer, 2010). Helliwell, and Huang (2014) analysed this tendency in a US survey, where job security was found to be indirectly related to unemployment.

X and Z

The X variables contain the measures for the opined standard of living in UK and the Z variable represents the SPSE in UK.

It was assumed that high standard of living and better monetary condition of the unemployed will be positively related with SPSE.

Y and Z

The ordinal variable Y contains the views on the Government control on parity of income levels. The scholar assumed that the ordinal predictor Y also had positive correlation with SPSE (Z).

The literature review was narrowed down to the present scenario with only two independent predictors. The conceptual model of the research has been provided in figure1, where the two independent ordinal factors were hypothesized to be positively associated with the SPSE. The two NULL hypotheses of the present study are as follows:

H01: Opinion on “Government should reduce differences in income levels” was assumed to be uncorrelated with SPSE.

H02: Views on “Standard of living of unemployed” was hypothesized to have no significant association with SPSE.

The analysis was based on data from the European Social Survey (ESS) data for United Kingdom, round 8 in 2016. The ESS is international survey collaboration; it contains information on representative national studies. Recent survey was conducted in several countries through personal interviews with citizens aged 18 to 99 who live in private homes. Based on stratified probabilistic tests, the project involved 1959 people in United Kingdom in 2016. The sample contains 872 male cases and 1087 female subjects for analysis in United Kingdom.

Table 2: Gender Distribution of the respondents of the ESS survey in UK

The subjective satisfaction with economy is measured by the dependent factor, opinions on satisfaction with the present economy in UK. Respondents were asked regarding their satisfaction with economic situation, and the ordinal answers ranging from a “totally dissatisfied” to a “fully satisfied” levels. To determine the relationship between SPSE and standard of living of the unemployed, the effect on human behaviour will likely depend on longitudinal impact of unemployment. The effects of social security or minimum wage provided by the government and other determinants of standard of unemployed are examined in relation to the satisfaction with the economic condition of the country (Creswell, 2008).

Methodology

While social perceptions improve understanding of how economic effects can affect individuals, they do not explain why inequality in income affects individuals’ subjective satisfaction with economy. In order to achieve this understanding, the scholar took into account certain preferences of social mobility (Mori, and Christodoulou, 2012).

The relations between the two independent variables and the dependent variable were assessed by Spearman’s correlation because of the ordinal nature of the three variables.  A linear regression model with was constructed with standard of living of the unemployed and income disparity regulated by government as two independent predictors. The model was constructed to estimate the satisfaction of the citizens with present economy in United Kingdom, in 2016.

All the variables were investigated for possible outliers in the ordinal data. Hence, linear relation between the variables was assumed (Hair, 2006). All the three variables in the study were ordinal in nature, and no significant outliers were identified. Living standard of unemployed was scaled between extremely bad (level 1) to extremely good (level 10). Government should reduce differences in income levels was assessed through strongly agree to strongly disagree (1- 5). The dependent variable, satisfaction on present economy was also measured on a scale of 0 to 10, where 0 denoted extremely dissatisfied and 10 denoted extremely satisfied.

The variables were checked for normality by Shapiro – Wilk test. Statistically significant strong evidences existed for non-normality of the three variables. From Table 1 it can be noted that the level of significance in Shapiro – Wilk test were all less than 0.01. hence, using Central Limit theorem (CLT) the variables were assumed to be normal as the sample size was greater than 30 (N = 1873).

Table 1: Normality Check for the Variables

From bivariate correlation, the coefficients of correlations (Table 4) were found to be way smaller than 1, and no multicollinearity was observed in the data. The homoscedasticity assumption was checked from the scatter plot of the regression model. The analysis was done in regression modelling.  

It is necessary to define dependent and independent research variables. They must also describe the effect of interesting variables. The satisfaction with economy of the ESS is measured on the basis of the problem of overall satisfaction with economic life in the country. On a scale of 0 – 10, average satisfaction with present economy was nearly 5 (M = 5.01, SD = 2.06) for 1931 citizens. One a scale of 1 – 5, the average score of opinion on government bringing parity in income levels was 2.33 (SD = 0.99). The average views on standard of unemployed youth was 4.61 (SD = 1.95) on a scale of 1 – 10. 1941 British citizens shared their views on government bringing parity in income levels, and 1909 opined on standard of living of the unemployed.

Table 3: Descriptive statistics of the dependent and the independent factors

The results of the comparison between the satisfaction with present economy in 2016 for UK and standard living of unemployed, and opinion on Government should reduce differences in income levels were measured by Spearman’s rank correlation.  Both correlations show a very low positive correlation, which were statistically significant also. This indicated that there existed some significant positive relations between the variables. With improvement in standard of unemployed and with Government reducing the income levels, the satisfaction on economic status of the country was expected to grow. The low correlation indicated existence of the factors in the data set, which could positively impact the satisfaction with economy of UK in 2016. The perception of social mobility provides additional information to approve the sales procedures. In this case, the results also show differences between the subgroups. Higher level of standard of living of the unemployed had higher correlation compared to the opinions on Government reducing disparity between income levels. From the correlation results, both the null hypotheses were rejected at 1% level of significance against the alternate hypotheses indicating statistically significant relation between the dependent and independent factors.  

Table 2

Table 4: Spearman’s’ rank correlation between the variables

From previous studies, we know that satisfaction with economic status varies according to demographic and socioeconomic traits. However, when analysing satisfaction, disparity in income levels and socioeconomic condition of unemployed are two key factors to be assessed, which are structurally defined. Table 5 shows the analysis of linear regression model in the context of the problem. The model includes the two control variables. The results are in line with previous surveys on satisfaction. The linear regression model was found to be statistically significant (F = 61.09, p < 0.01) at 1% level of significance. The two independent factors were able to explain 6.1% variation (R-square) in satisfaction with status of economy in 2016. It has to be noted that among various independent factors in the survey, the scholar had selected two amongst them. Hence, explanation of 6.1% variation was quite considerable.

From figure 3, the normally distributed residuals were noted, and from scatterplot in Figure 4 the homoscedasticity assumption was checked. It was found that residuals were almost equally spread across the axes. Hence, no homoscedasticity was observed. The estimated linear equation of the model was found to be as:

Satisfaction with economy = 0.332 * Opinion on Government should reduce differences in income levels + 0.174 * Standard of living of unemployed + 3.443.

Table 5: Linear regression model for predicting satisfied with present state of economy in country

Conclusion

This document takes into account the impact of income inequality and living standard of unemployed on the satisfaction with economy of individuals and argues that economic cognition in the form of social perceptions. Good financial life founds that perceptions of legitimacy, either in terms of income inequality or social mobility (unemployed living standard), were significant. As the results show legitimacy of income inequality and living standard of unemployed, this result is crucial for two reasons. First, the empirical focus on social environmental (living standard of unemployed) aspect has shifted to directly affect individuals. Studies with multi-variable environment or with the characteristics of the social environment have consequences in favour of social equality. This article tried to show that subjective variables such as life satisfaction of unemployed, which economists traditionally consider suspicions contain useful information for predicting overall satisfaction on economy of the country. But, the model also causes complexity, because of dependence of standard of unemployed on inequality of income levels. Empirical analysis has shown that parity in income is an important factor in the satisfaction that is based on the subjective nature of the variable. Hence, a structural equation modelling (SEM) was required to evaluate the impact of the influence factors on the demographic as well other social factors, related to economic status of a country (Saunders et al., 2016).

As a limitation of the study, it can be pointed out that the linear modelling was not appropriate for an ordinal outcome variable. An ordinal regression would have yielded an appropriate model. Future research with SEM with other social factors constituting the variables of the present study would frame a statistically strong exemplary (Breakwell, & Hammond, 2006),

References

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Creswell, J.W. (2008), Research Design: Qualitative, Quantitative and Mixed Method Approaches, (3^rd ed.), London, Sage.

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