Why Some People Are Not As Happy As They Could Be: The Role of Unobservable Subjective Factors

Adalgiso Amendola (), Roberto Dell'Anno and Lavinia Parisi ()
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Adalgiso Amendola: CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy, Postal: via Giovanni Paolo II, 132, 84084 - Fisciano (SA), ITALY, https://docenti.unisa.it/001291/home

No 162, CELPE Discussion Papers from CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy

Abstract: This paper investigates the relative importance of unobservable subjective factors (i.e., genetic, personality, cognitive traits) on happiness. We apply a residual-based approach to distinguish between the direct and indirect effects of unobservable subjective traits on happiness. We refer to the “indirect” effects as the effects of unobservable variables on happiness mediated by social, economic and family factors. We find that these “indirect” effects only explain approximately 25% of the happiness variation at the individual level, while unobserved (i.e. genetic and personality) traits may explain up to 75% of the differences in happiness. We also find that socioeconomic, demographical and institutional factors better explain the variance of happy versus unhappy people. The empirical analysis is based on the European Quality of Life Survey dataset.

Keywords: Happiness; Unobservable traits; Subjective well-being; Unhappiness; Genes (search for similar items in EconPapers)
JEL-codes: A12 D91 I31 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2020-01-13
New Economics Papers: this item is included in nep-eur and nep-hap
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Related works:
Journal Article: Why some people are not as happy as they could be: the role of unobservable subjective factors (2022)
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