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Happiness, Economy and Institutions

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Author Info
Bruno S. Frey
Alois Stutzer

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Abstract

A cross-regional econometric analysis suggests that institutional factors in the form of direct democracy (via initiatives and referenda) and of federal structure (local autonomy) systematically and sizeably raise self-reported individual well-being. This positive effect can be attributed to political outcomes closer to voters' preferences, as well as to the procedural utility of political participation. Moreover, the results of "standard" microeconometric well-being functions previously published for other countries are generally supported. Unemployment has a strongly depressing effect on happiness. A higher income level raises happiness, however, only to a small extent.

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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp015.

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Handle: RePEc:zur:iewwpx:015

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Related research
Keywords: subjective well-being; institutions; direct democracy; unemployment;

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Find related papers by JEL classification:
D60 - Microeconomics - - Welfare Economics - - - General
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H10 - Public Economics - - Structure and Scope of Government - - - General
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

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    Other versions:
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  23. Kenny, Charles, 1999. "Does Growth Cause Happiness, or Does Happiness Cause Growth?," Kyklos, Blackwell Publishing, vol. 52(1), pages 3-25.
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