Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects

Justina A. V. Fischer

No 164, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country panel framework that accounts for unobserved, time-invariant country heterogeneity. This study also shows that using supra-national region dummies (by geography or language) in a country-random effects model appears to be a sufficient substitution for omitted country fixed effects.

Keywords: Happiness; life satisfaction; well-being; quality of life; institutions; democracy; rule of law; political constraints; policy implications; panel econometrics (search for similar items in EconPapers)
JEL-codes: C33 H10 H40 I31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-05-28, Revised 2010-05-28
New Economics Papers: this item is included in nep-hap and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects (2010)
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