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The Relationship between Energy Consumption, Economic Growth and Happiness

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  • Neila Ben Afia

    (University of Sousse, Tunisia)

Abstract

For the important role of happiness in our life, the aim of this study was to investigate empirically the relationship between the consumption of energy, economic growth and happiness. A distinction is drawn between the direct and indirect impact of consumption of energy on happiness which functions throughout the impact of consumption of energy on per capita income and the resulting impact of income on happiness. Using panel data analysis of 47 different countries over 14 years covering the period from 2001 to 2014, both direct and indirect effects of consumption of energy on happiness are estimated. We remedy the potential endogeneity problem when estimating the indirect effect by instrumenting the variable “consumption of energy”. Our results show that the consumption of energy has a significant positive direct impact and indirect effects on happiness resulting in an overall positive effect of consumption of energy on happiness for all countries

Suggested Citation

  • Neila Ben Afia, 2019. "The Relationship between Energy Consumption, Economic Growth and Happiness," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 44(3), pages 41-57, September.
    • Handle: RePEc:jed:journl:v:44:y:2019:i:3:p:41-57
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    Cited by:

    1. Kassim, Fatima & Isik, Abdurrahman, 2020. "The link between energy consumption and economic growth: Evidence from transition economies (1985-2017)," MPRA Paper 101601, University Library of Munich, Germany.

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    More about this item

    Keywords

    Consumption of energy; Income; Happiness; Panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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