Economic Determinants of Happiness

TL;DR

This paper investigates the complex relationship between economic indicators and national happiness levels, challenging traditional assumptions by analyzing survey data and constructing a measure of US happiness over time.

Contribution

It introduces a new method to measure US national happiness annually and examines its correlation with economic indicators, providing fresh insights into their relationship.

Findings

Higher happiness in less developed Latin American countries than in North America.

Economic indicators do not always align with perceived happiness levels.

The US happiness measure varies independently of certain economic factors.

Abstract

Many scholars have recently begun to dispute the assumed link between individual wellbeing and economic conditions and the extent to which the latter matters (Easterlin, 1995; Stevenson and Wolfers 2008; Tella and MacCulloch 2008). This dilemma is empirically demonstrated in the Latin America Public Opinion Project (LAPOP, 2011), which surveyed North and Latin America in terms of perceived life satisfaction. Higher measures found in the less developed countries of Brazil, Costa Rica, and Panama than in North America pose an intriguing quandary to traditional economic theory. In light of this predicament this paper aims to construct a sensible measure of the national happiness level for the United States on a year by year basis; and regress this against indicators of the national economy to provide insight into this puzzling enigma between national happiness and economic forces