What Makes People Happy

Borooah, Vani (2024): What Makes People Happy. Published in: Routledge Studies in Development Economics (2024): pp. 10-37.

Abstract

The twin issues of what makes people “happy,” and the relative strength of these happiness affecting factors, have in the recent past become a staple of economic analysis and goes under the rubric of “happiness research”. The aim of such research is to understand what the determinants of happiness are and how these vary across population groups, distinguished by a variety of socio-economic and demographic factors (for example, education, marital status, economic position, social class, and geographic location). A key component of this research is a person’s subjective assessment of their state of happiness and this assessment is sought to be correlated, using methods of multiple regression, with the multitude of factors hypothesised to affect it. The purpose of this chapter is to use data from the World Values Survey to provide a self-contained overview of this research, discussing the many variables that are conventionally included in the “happiness equation”, the justification for their inclusion, and the strength of their effect.

• Item Type: MPRA Paper
• Language: English
• Keywords: Determinants of Happiness
• Subjects: H - Public Economics > H0 - General; I - Health, Education, and Welfare > I0 - General; I - Health, Education, and Welfare > I0 - General > I00 - General; I - Health, Education, and Welfare > I2 - Education and Research Institutions

References

Adshade, M. (2019), “Does Marriage Really Make US Healthier and Happier?”, Women’s Health Research Cluster, Vancouver: University of British Columbia. https://ifstudies.org/blog/does-marriage-really-make-us-healthier-and-happier (accessed 16 July 2022).

Amérigo, M., and Aragonés, J.I. (1997), “A Theoretical and Methodological Approach to the Study of Residential Satisfaction”, Journal of Environmental Psychology, 17: 47–57.

Anderson C, Kraus MW, Galinsky AD, Keltner D (2012), “The local-ladder effect: social status and subjective well-being”, Psychological Science, 23:764-71.

Bertoni, M. and Brunello, G (2014), Pappa Ante Portas: The Retired Husband Syndrome in Japan, IZA Discussion Paper No. 8350, Available at SSRN: https://ssrn.com/abstract=2475318 or http://dx.doi.org/10.2139/ssrn.2475318.

Blanchflower, D.G., and Oswald, A.J. (2017), Do Humans Suffer a Psychological Low in Midlife? Two Approaches (With and Without Controls) in Seven Data Sets, IZA Discussion Papers, No. 10958, Institute of Labor Economics (IZA), Bonn.

Borooah, V.K. (2006), “What Makes People Happy? Some Evidence from Northern Ireland”, Journal of Happiness Studies, 7: 427–465.

Butkovic, A., Tomas, J., and Spanic, A.M. (2020), “Emerging Adults versus Middle Aged Adults: Do They Differ in Psychological Needs, Self-esteem and Life Satisfaction”, Journal of Happiness Studies, 21, 779–798. https://doi.org/10.1007/s10902-019-00106-w.

Clark, A.E., Frijters, P., and Shields, M.A. (2008), “Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles”, Journal of Economic Literature, 46: 95–144.

Cramm, J.M., Bornscheuer, L., Selivanova, A., and Lee, J. (2015), “The Health of India’s Elderly Population: A Comparative Assessment Using Subjective and Objective Health Outcomes”, Population Ageing, 8: 245–259.

Cummins, R.A., and Nistico, H. (2002), “Maintaining Life Satisfaction: The Role of Positive Cognitive Bias”, Journal of Happiness Studies, 3: 37–69.

Cuñado, J., and Pérez de Garcia, F. (2011), “Does Education Affect Happiness? Evidence from Spain”, Social Indicators Research, 108: 185–196.

Deaton, A., and Stone, A.A. (2014), “Evaluative and Hedonic Well-Being Among Those With and Without Children at Home”, Proceedings of the National Academy of Sciences, 111: 1328–1333.

Domar, E.D. (1957), Essays in the Theory of Economic Growth, Westport, CT: Greenwood.

Easterlin, R.A. (1974), “Does Economic Growth Improve the Human Lot? Some Empirical Evidence”, in P.A. David and M.W. Reder (eds.), Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, pp. 89–125. New York: Academic Press, Inc.

Easterlin, R.A. (2001), “Income and Happiness: Towards a Unified Theory”, Economic Journal, 111: 465–484. Easterlin, R.A., and O’Connor, K.J. (2020), The Easterlin Paradox, Bonn: IZA Institute of Labor Economics.

Frey, B.S., and Stutzer, A. (2002), Happiness and Economics, Princeton, NJ: Princeton University Press.

Forrest, R., and Kearns, A. (2001), “Social Cohesion, Social Capital and the Neighbourhood”, Urban Studies, 38: 2125–2143.

Gilbert, D. (2006), Stumbling on Happiness, London: Harper Collins.

Gilbert, D. (2012), “The Science Behind the Smile”, Harvard Business Review, January–February 2012: 85–90.

Glaeser, E.L., Gottlieb, J.D., and Ziv, O. (2016), “Unhappy Cities”, Journal of Labor Economics, 34: S129–S182.

Graham, C., and Chattopadhyay, S. (2013) “Gender and Well-being Around the World”, International Journal of Happiness and Development, 1: 212–232.

Graham, C. (2021), Are Women Happier than Men? Washington DC: The Brookings Institution. Greene, W.H. (2000), Econometric Analysis, Englewood Cliffs, NJ: Prentice Hall.

Grover, S., and Helliwell, J. (2019), “How’s Life at Home? New Evidence on Marriage and the Set Point for Happiness,” Journal of Happiness Studies, 20: 373–390.

Haerpfer, C., Inglehart, R., Moreno, A., Welzel, C., Kizilova, K., Diez-Medrano J., Lagos, M., Norris, P., Ponarin, E., and Puranen, B. (eds.). (2022), World Values Survey: Round Seven. Country-Pooled Datafile Version 4.0., Madrid, Spain & Vienna, Austria: JD Systems Institute & WVSA Secretariat. doi:10.14281/18241.18.

Harrod, R.F. (1948), Towards a Dynamic Economics: Some Recent Developments of Economic Theory and Their Application to Policy, London: Macmillan.

Hudson, N.W., Lucas, R.E., and Donellan, M.B. (2020), “Are we Happier with Others? An Investigation of the Links Between Spending Time with Others and Subjective Well-Being”, Journal of Personality and Social Psychology, 119: 672–694.

Hur, M., and Morrow-Jones, H. (2008), “Factors that Influence Residents’ Satisfaction with Neighborhoods”, Environment and Behavior, 40: 619–635.

Hur, M., Nasar, J.L., and Chun, B. (2010), “Neighborhood Satisfaction, Physical and Perceived Naturalness and Openness”, Journal of Environmental Psychology, 30: 52–59.

Kahneman, D., Krueger, A.B., Schkade, D.A., Schwarz, N., and Stone, A.A. (2004), “A Survey Method for Characterizing Daily Life Experience: The Day Reconstruction Method”, Science, 306: 1776–1780.

Kahneman, D., Krueger, A.B., Schkade, D., Schwarz, N., and Stone, A.A. (2006), “Would You Be Happier If You Were Richer? A Focusing Illusion”, Science, 312: 1908–1910.

Kahneman, D., and Deaton, A. (2010), “High Income Improves Evaluation of Life but not Emotional Well-Being”, Proceedings of the National Academy of Sciences, 107: 16489–16493.

Kennedy, D.P., and Adolphs, R. (2011), “Social Neuroscience: Stress and the City”, Nature, 474: 452–453. Kenyon, P. (2006), “Retired Husband Syndrome”, British Broadcasting Corporation 13 November http://news.bbc.co.uk/1/hi/programmes/this_world/6143010.stm (accessed 16 July 2022).

Kets De Vries, M. (2003), “The Retirement Syndrome: The Psychology of Letting Go”, European Management Journal, 21: 707–716.

Kotan, M. (2010), “Freedom or Happiness? Agency and Subjective Well-Being in the Capability Approach”, The Journal of Socioeconomics, 39: 369–375.

Kuper, S. (2021), “How to Climb Down Gracefully and not Become an Old Bore”, Financial Times, 7 October https://www.ft.com/content/950cf73a-9bd8-473d-988c-ec2a4d0726b7 (accessed 16 July 2022).

Lim, C., and Putman, R.D. (2010), “Religion, Social Networks, and Life Satisfaction”, American Sociological Review, 75: 915–933.

Long, J.S., and Freese, J. (2014), Regression Models for Categorical Dependent Variables using Stata, College Station, TX: Stata Press.

Maddox, G. L., & Douglass, E. B. (1973). Self-assessment of health: a longitudinal study of elderly subjects. Journal of Health and Social Behavior, 14: 87–93.

Navarro-Carrillio, G., Alonso-Ferres, M., Moya, M., and Valor-Segura, I. (2020), “Socioeconomic Status and Psychological Well-Being: Revisiting the Role of Subjective Socioeconomic Status”, Frontiers in Psychology, 11: Article 1303 doi: 10.3389/fpsyg.2020.01303.

Ng, Y-K. (2022), Happiness – Concept, Measurement, Promotion, Singapore: Springer.

Oswald, A. (1997), “Happiness and Economic Performance”, Economic Journal, 107: 1815–1831.

Papachristou, I.A., and Rosas-Casals, M. (2015), “Making the Neighbourhood a Better Place to Live: A SWB Approach Implementing Fundamental Human Needs”, On the W@terfront, 40: 31–50.

Ponocny, I., Weis Mayer, Ch., Stross, B., and Dressler, S.G. (2016), “Are Most People Happy? Exploring the Meaning of Subjective Well-Being Ratings”, Journal of Happiness Studies, 17: 2635–2653.

PRC (2019), Religion’s Relationship to Happiness, Civic Engagement and Health Around the World, Washington DC: Pew Research Center (www.pewresearch.org).

Ruiu, G., and Ruiu, M. (2019), “The Complex Relationship Between Education and Happiness: The Case of Highly Educated Individuals in Italy”, Journal of Happiness Studies, 20: 2631–2653.

Sen, A.K. (2002), “Health: Perception versus Observation”, British Medical Journal 324 (7342): 860–861.

Senior, J. (2014), All Joy and No Fun: The Paradox of Modern Parenthood, London: Virago.

Smith, T.W. (1979), “Happiness: Time Trends, Seasonal Variations, Inter-survey Differences, and Other Mysteries”, Social Psychology Quarterly 42 (1):18–30.

Theil, H. (1970), “On the Estimation of Variables Involving Qualitative Variables”, American Journal of Sociology, 76: 103–154.

Twenge, J., and Bell Cooper, A. (2022), “The Expanding Class Divide in Happiness in the United States”, Emotion, 22: 701–713.

Vieira-Lima, S. (2013), Essays on the Economics of Happiness, Ph.D. Thesis, Department of Economics, Management and Statistics, Milan: University of Milano-Bicocca.