Well-being and economic development: a principal components analysis

Kin Ming Wong ()

International Journal of Happiness and Development, 2013, vol. 1, issue 2, 131-141

Abstract: There has been a long-running debate over the relationship between income and happiness. The Easterlin paradox and the paradox of unhappy growth are both discussed at length in the literature. The traditional reduced form regression model, however, limits the structure of relationships that can be estimated. This limitation is the motivation for an alternative approach that can uncover more complicated relationships between well-being and economic development. This study uses principal components analysis to reveal the unobserved latent variables that govern the co-movement of several well-being and economic development variables. Two major components are found: the first has a positive influence on all of the variables, whereas the second has opposite effects on well-being and economic development. Auxiliary regressions suggest that the first component is associated with the level of rule of law and the second is correlated with freedom from regulation.

Keywords: well-being; life satisfaction; happiness; income; GDP per capita; economic development; PCA; principal component analysis; rule of law; freedom from competition. (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=55637 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijhdev:v:1:y:2013:i:2:p:131-141

Access Statistics for this article

More articles in International Journal of Happiness and Development from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().