In this paper, we show that incorporating the relational dimension into an otherwise standard OLG model and focusing on dynamic leisure externalities leads to dramatically different predictions. Here we show that when the old perceive private and relational consumption as substitutable goods, a...

In this paper, we show that incorporating the relational dimension into an otherwise standard OLG model and focusing on dynamic leisure externalities leads to dramatically different predictions. Here we show that when the old perceive private and relational consumption as substitutable goods, a...

Paper presented at the Conference “From GDP to Well-Being: Economics on the Road to Sustainability”, Ancona, Italy, 3-5 December 2009. <p> Abstract <p> We develop a dynamic model to analyze the sources and the evolution of social participation and social capital in a growing economy characterized...</p></p>

The standard specification of utility functions in economic models usually neglects the effect of sociability on happiness. Our level and first difference panel estimates show that relational goods have significant and positive effects on self declared life satisfaction, net of the impact of...