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Does income matter in the happiness-corruption relationship?

Author

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  • Mak Arvin
  • Byron Lew

Abstract

Purpose - – Empirical evidence on the relation between happiness (life satisfaction) and corruption is barely perceptible in the literature. The purpose of this paper is to contribute to closing this gap by presenting some estimates using a large cross-section of countries over the period 1996-2010. Design/methodology/approach - – The empirical model allows both corruption and per capita income to enter as arguments of a happiness “production function”. The correlation between happiness and corruption is presumed to be non-linear. Findings - – While the results do not support the existence of a Kuznets-type trajectory, the study finds that the level of per capita income determines whether happiness and corruption are related and in what way. The authors estimate cutoff income levels at which corruption has a discernible effect on happiness. The results show that corruption reduces happiness, but only for high-income countries – roughly the upper half of the income range in the sample. Practical implications - – Results nullify the oft-asserted statement that happiness is negatively linked to corruption in all countries. The nature of correlation is more complex. Originality/value - – The paper goes beyond simply testing whether happiness is related to corruption. It conjectures that the relationship between the two variables is non-monotonic. Thus, the analysis considers the notion that the association between happiness and probity is income dependent. A novel feature of the empirical model is that the estimated income cutoff levels are endogenously determined. That is, income thresholds are not pre-determined. The authors also test for the robustness of the results by addressing the issue of potential endogeneity of corruption.

Suggested Citation

  • Mak Arvin & Byron Lew, 2014. "Does income matter in the happiness-corruption relationship?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 41(3), pages 469-490, May.
  • Handle: RePEc:eme:jespps:v:41:y:2014:i:3:p:469-490
    DOI: 10.1108/JES-02-2013-0024
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    Citations

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    Cited by:

    1. Qiang Li & Lian An, 2020. "Corruption Takes Away Happiness: Evidence from a Cross-National Study," Journal of Happiness Studies, Springer, vol. 21(2), pages 485-504, February.
    2. van Deurzen, Ioana, 2017. "And justice for all: Examining corruption as a contextual source of mental illness," Social Science & Medicine, Elsevier, vol. 173(C), pages 26-34.
    3. Chiara Amini & Elodie Douarin, 2020. "Corruption and Life Satisfaction in Transition: Is Corruption a Social Norm in Eastern Europe?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(2), pages 723-766, September.
    4. Krisztina Gero & Daniel Kim, 2020. "Prospective associations between US state-level corruption and individual-level cardiovascular risk factors among middle-aged Americans: The National Longitudinal Survey of Youths 1979," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 65(9), pages 1737-1748, December.
    5. Monica Violeta Achim & Viorela Ligia Văidean & Sorin Nicolae Borlea, 2020. "Corruption and health outcomes within an economic and cultural framework," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(2), pages 195-207, March.
    6. Paleologou, Suzanna-Maria, 2022. "Happiness, democracy and socio-economic conditions: Evidence from a difference GMM estimator," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    7. Amanina Abdur Rahman & Spyridon Stavropoulos & Martijn Burger & Elena Ianchovichina, 2021. "Does Institutional Quality Moderate the Relationship between Corruption and Subjective Well-Being?," Economics Bulletin, AccessEcon, vol. 41(3), pages 975-996.

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