Which Formula for National Happiness?

Socio-Economic Planning Sciences, 2019

23 Pages Posted: 2 May 2019

See all articles by Chris Tofallis

Chris Tofallis

University of Hertfordshire Business School

Date Written: 2019

Abstract

The World Happiness Report is published by the United Nations Sustainable Development Solutions Network and contains an international ranking of national average happiness, as measured by surveys of personal life evaluations. It also contains an analysis which tries to explain the happiness figures from more than 150 countries using data on six key variables. That analysis assumes the factors combine in an additive manner and therefore operate independently of each other. By contrast, we explore a multiplicative model, which allows for interactivity or synergy between factors, as well as the possibility of diminishing marginal benefit at higher levels of achievement. We find that this model provides a better fit to the data and is therefore superior in its explanatory power. The implication for policy-makers is that they should focus on improving those factors which are the lowest for their nation as this will provide greater relative benefits to subjective well-being. At an individual level this means focusing on improving conditions for those who are experiencing the lowest levels of well-being.

Keywords: Happiness, Happiness Index, Subjective Well-Being, Multiplicative Model

JEL Classification: C2, C51, I31

Suggested Citation

Tofallis, Chris, Which Formula for National Happiness? (2019). Socio-Economic Planning Sciences, 2019, Available at SSRN: https://ssrn.com/abstract=3364852 or http://dx.doi.org/10.2139/ssrn.3364852

Chris Tofallis (Contact Author)

University of Hertfordshire Business School ( email )

College Lane
Hatfield, Hertfordshire AL10 9AB
United Kingdom

HOME PAGE: http://tinyurl.com/ChrisTofallis

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