The Happiness-Economic Well-Being Nexus: New Insights From Global Panel Data
Document Type
Article
Publication Date
10-1-2023
Abstract
This paper explores whether happiness-led growth policies implemented in some countries are viable for achieving better economic well-being proxied by GDP per capita using a panel dataset covering 104 countries from 2006 to 2018. While past studies showed that economic growth promotes happiness, this paper applied the panel Granger causality test to show that GDP per capita is also determined by happiness. Accordingly, the pooled ordinary least squares, random-effects model, fixed-effects model, and two-step generalized method of moments were employed to estimate the effect of changes in happiness on economic growth. The empirical results suggest that economic growth of 1% to 3% can be obtained by increasing happiness. The positive effect of happiness is about four times greater in developed countries than in developing countries. This paper reveals that happiness should be included in conventional economic growth models to achieve a holistic approach in designing development policies.
Keywords
economic growth, economic well-being, generalized method of moments (GMM), Granger causality, happiness
Divisions
Faculty_of_Business_and_Accountancy,universiti
Publication Title
SAGE Open
Volume
13
Issue
4
Publisher
SAGE Publications
Publisher Location
2455 TELLER RD, THOUSAND OAKS, CA 91320 USA