Does the Credit Cycle Have an Impact on Happiness?

Tinghui Li, Junhao Zhong and Mark Xu
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Tinghui Li: School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China
Junhao Zhong: School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China
Mark Xu: Portsmouth Business School, University of Portsmouth, Portsmouth PO1 3DE, UK

IJERPH, 2019, vol. 17, issue 1, 1-19

Abstract: The 2008 international financial crisis triggered a heated discussion of the relationship between public health and the economic environment. We test the relationship between the credit cycle and happiness using the fixed effects model and explore the transmission channels between them by adding the moderating effect. The results show the following empirical regularities. First, the credit cycle has a negative correlation with happiness. This means that credit growth will reduce the overall happiness score in a country/region. Second, the transmission channels between the credit cycle and happiness are different during credit expansion and recession. Life expectancy and generosity can moderate the relationship between the credit cycle and happiness only during credit expansion. GDP per capita can moderate this relationship only during credit recession. Social support, freedom, and positive affect can moderate this relationship throughout the credit cycle. Third, the total impact of the credit cycle on happiness will become positive by the changes in the moderating effects. In general, we can improve subjective well-being if one of the following five conditions holds: (1) with the adequate support from the family and society, (2) with enough freedom, (3) with social generosity, (4) with a positive and optimistic outlook, and (5) with a high level of GDP per capita.

Keywords: the credit cycle; happiness; moderating effect; credit expansion; credit recession (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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