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

31 Pages Posted: 1 Jun 2010

See all articles by Justina A. V. Fischer

Justina A. V. Fischer

Organization for Economic Co-Operation and Development (OECD); Stockholm School of Economics; University of Hohenheim

Date Written: April 31, 2010

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 supranational 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

JEL Classification: I31, H10, H40, C33

Suggested Citation

Fischer, Justina A.V., Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects Versus Region Fixed Effects (April 31, 2010). CEIS Working Paper No. 164. Available at SSRN: https://ssrn.com/abstract=1618212 or http://dx.doi.org/10.2139/ssrn.1618212

Justina A.V. Fischer (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Stockholm School of Economics

PO Box 6501
Stockholm, 11383
Sweden

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
139
Abstract Views
1,227
rank
207,846
PlumX Metrics