Factors Explaining Life Satisfaction Across Countries
Koh, Jong Rak
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The factors explaining the happiness level at large scale are still unclear and debated. In this paper, we discuss a potential causal relationship between wealth and life satisfaction at the national level. Using the Gallup Global Well-Being Poll data on self-reported life satisfaction and the World Bank database, we study the extent to which wealth, measured by GDP per capita, influences the average level of happiness in 146 countries. In our first model, the simple regression highlights a significant relationship between GDP per capita and self-reported index for happiness. Second, we try to challenge the causal relationship by assessing whether GDP per capita would not actually be a proxy for other factors. However, our results show that GDP per capita remains a significant determinant of happiness when controlling for natural risks, education (measured by the literacy rate), and access to health care (measured by life expectancy), all of which are statistically significant in explaining the level of well-being.