Does psychological well-being mediate economic well-being? short-term evidence from a multifaceted program in the Philippines

ABSTRACT

Can changes in psychological well-being lead to changes in economic well-being? Across many settings, the view that inexpensive psychological interventions can lead to meaningful change in economic well-being has become popular. Examining data from participants of a multifaceted program in the Philippines we find that program participants experience (i) positive changes in income and expenditures, (ii) relatively large changes in measures of psychological well-being, but that (iii) these changes in psychological well-being do not mediate changes in economic well-being. This suggests, at least in the short-term, that changes in psychological attributes may have small effects on measures of economic well-being.

KEYWORDS:

• Psychological well-being
• poverty alleviation
• mediation
• programme evaluation

Disclosure of potential conflicts of interest

No potential conflict of interest was reported by the author(s).

Notes

1. See Section 2 for more details about the Transform program.

2. See Bellemare and Wichman (2020) for derivations of interpreting regression coefficients with a dependent variable transformed through the inverse hyperbolic sine function.

3. We use the user-written Stata command ‘psacalc.’

Additional information

Notes on contributors

Jeffrey R. Bloem

Jeffrey R. Bloem is a Research Economist with the US Department of Agriculture's Economic Research Service (USDA ERS) within the International Trade and Development Branch. Jeffrey earned his Ph.D. from the University of Minnesota's Department of Applied Economics in 2020. His research focuses on applied development microeconomics with applications in agriculture, conflict, and psychology.

Rashmita Gandhe

Rashmita Gandhe is a third-year undergraduate student at the University of Michigan. She is currently pursuing a major in business administration through the Ross School of Business and minoring in Computer Science, Asian Studies, and Multidisciplinary Design. Rashmita's professional experiences and interests lie in the intersection of business, healthcare, and technology.