Considering Happiness for Economic Development: Determinants of Happiness in Indonesia

61 Pages Posted: 1 Sep 2014

See all articles by Kitae Sohn

Kitae Sohn

Korea Institute for International Economic Policy

Date Written: December 30, 2010

Abstract

Happiness is often ignored in development economics even though it is generally considered the ultimate goal in life. Using the Indonesia Family Life Survey, this paper elucidates factors related to happiness in Indonesia in an ordered probit analysis. Some factors yield results consistent with those in the literature, but other factors such as unemployment and female gender turn out to be not robust. Exogenous measures are introduced for past income mobility, social trust, and political environment. Also, measures with a more immediate impact on happiness are exploited for social trust and political environment. The sign of the coefficient on past income mobility is reversed once the variable is purged of endogeneity. Also, social trust and political environment are found to have little relationship with happiness. The last finding stands in stark contrast to the findings in the literature that uses measures only remotely related to happiness.

Keywords: Economic growth, Development, Indonesia, Happiness

JEL Classification: D10, D60, I31, J01, O53

Suggested Citation

Sohn, Kitae, Considering Happiness for Economic Development: Determinants of Happiness in Indonesia (December 30, 2010). KIEP Research Paper No. Working Papers-10-09. Available at SSRN: https://ssrn.com/abstract=2489785 or http://dx.doi.org/10.2139/ssrn.2489785

Kitae Sohn (Contact Author)

Korea Institute for International Economic Policy ( email )

Seoul 137-602

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