Dynamic Analysis of Social and Macro Determinants of Happiness Across Varying Income Countries (2006-2023)
DOI:
https://doi.org/10.70730/tureview.v29i1.241295Keywords:
Money, Happiness, Bayesian Variable Selection, Bayesian Nonlinear Multivariate PanelAbstract
Since 2011, a more holistic approach to development has been adopted by the UN which introduced the concept of “happiness”, and subsequent claims have been made to loosen the link between material wealth, particularly money, and “happiness”. This study explores the dynamic effect of the role of money in generating happiness using Gallup World Pool (GWP) survey data. The sample size includes a total of 78 countries consists of 17 higher income economies, 25 upper-middle income economies, 14 lower-middle income economies and 22 lower income economies from 2006 to 2023. First, we determined important covariates influencing happiness in addition to income and GDP growth by using Bayesian additive regression trees and Bayesian variable selection with shrinking and diffusing prior models. Second, we used a Bayesian dynamic nonlinear multivariate panel model to estimate the time-variant and time-varying effects of income and growth on happiness. Our main results show (1) freedom to make life choices, generosity and perception of corruption in higher income countries, generosity and healthy life expectancy at birth in upper middle-income countries, freedom to make life choices and generosity in lower middle-income countries, and healthy life expectancy at birth and freedom to make life choices in lower income countries are found to be important factors on happiness or subjective well-being (SWB), (2) income and real GDP growth have mixed and small effects on SWB across countries with varying income levels, and (3) generosity and freedom to make life choices were found to have the highest positive and significant effects on SWB. These results reveal that happiness is heavily affected by multidimensional factors beyond money. This study adds to the existing empirical literature on the role of money in generating happiness across nations with varying income levels.
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