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Happiness, Economy and Institutions

Bruno S. Frey
University of Zurich - Faculty of Business Administration - Institute for Empirical Research in Economics (IEW); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Swiss Federal Institute of Technology Zurich

Alois Stutzer
University of Basel - Department of Business and Economics; Institute for the Study of Labor (IZA)

January 2000

CESifo Working Paper Series No. 246

Abstract:
A cross-regional econometric analysis is conducted suggesting 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 are supported. Unemployment among economic variables and bad health among demographic variables have a strongly depressing effect on happiness. Income only significantly raises happiness for higher income groups.

JEL Classifications: D72, H10, I31

Working Paper Series

Date posted: March 20, 2000 ; Last revised: August 10, 2004

Suggested Citation

Frey, Bruno S. and Stutzer, Alois, Happiness, Economy and Institutions (January 2000). CESifo Working Paper Series No. 246. Available at SSRN: http://ssrn.com/abstract=203211

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Contact Information

Bruno S. Frey (Contact Author) University of Zurich - Faculty of Business Administration - Institute for Empirical Research in Economics (IEW) ( email ) Winterthurerstrasse 30 CH-8006 Zurich Switzerland +41 44 634 37 31 (Phone) +41 44 634 35 99 (Fax)
CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Poschinger Str. 5 DE-81679 Munich Germany HOME PAGE: http://www.CESifo.de
Swiss Federal Institute of Technology Zurich ( email ) Zürichbergstrasse 18 8092 Zurich CH-1015 Switzerland
Alois Stutzer University of Basel - Department of Business and Economics ( email ) Petersgraben 51 4003 Basel Switzerland 0041 61 267 3361 (Phone) 0041 61 267 3340 (Fax) HOME PAGE: http://www.wwz.unibas.ch/wifor/staff/as/as.htm
Institute for the Study of Labor (IZA) P.O. Box 7240 D-53072 Bonn Germany