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Is It Culture or Democracy? The Impact of Democracy, Income, and Culture on Happiness

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Author Info
DAVID DORN ()
Justina Fischer ()
GEBHARD KIRCHGÄSSNER ()
ALFONSO SOUSA-POZA ()

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Abstract

We look at the relation between democracy and perceived subjective well-being, taking also into account the impact of income and culture. After briefly reviewing the empirical results for Switzerland, we re-estimate this relationship allowing for the relative income position of individuals and also using a new more recent data from the Swiss Household Panel. No robust relationship between the extent of (direct) democracy and happiness can be observed. In a second step, we conduct a cross-national analysis, covering 28 countries with data from the 1998 International Social Survey Programme (ISSP). There we observe a robust positive and significant relationship between democracy and happiness.

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Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2005 with number 2005-12.

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Length: 36 pages
Date of creation: Jun 2005
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Handle: RePEc:usg:dp2005:2005-12

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Find related papers by JEL classification:
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
H10 - Public Economics - - Structure and Scope of Government - - - General
D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bruno S. Frey & Marcel Kucher & Alois Stutzer, . "Outcome, Process & Power in Direct Democracy," IEW - Working Papers iewwp025, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  2. Lars P. Feld & Justina A.V. Fischer & Gebhard Kirchgassner, 2006. "The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland," CREMA Working Paper Series 2006-24, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
    Other versions:
  3. Christian Bjornskov, 2003. "The Happy Few: Cross--Country Evidence on Social Capital and Life Satisfaction," Kyklos, Blackwell Publishing, vol. 56(1), pages 3-16, February.
  4. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics. [Downloadable!]
    Other versions:
  5. D'Ambrosio, Conchita & Frick, Joachim R., 2004. "Subjective Well-Being and Relative Deprivation: An Empirical Link," IZA Discussion Papers 1351, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Headey, Bruce & Wooden, Mark, 2004. "The Effects of Wealth and Income on Subjective Well-Being and Ill-Being," IZA Discussion Papers 1032, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
    Other versions:
  8. Eddy van Doorslaer & Cristina Masseria, 2004. "Income-Related Inequality in the Use of Medical Care in 21 OECD Countries," OECD Health Working Papers 14, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  9. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    Other versions:
  10. Bruno S. Frey & Alois Stutzer, 2000. "Maximising Happiness?," German Economic Review, Blackwell Publishing, vol. 1(2), pages 145-167, 05. [Downloadable!] (restricted)
    Other versions:
  11. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July. [Downloadable!] (restricted)
  12. Alois Stutzer, . "Demokratieindizes für die Kantone der Schweiz," IEW - Working Papers iewwp023, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  13. Headey, Bruce & Muffels, Ruud & Wooden, Mark, 2004. "Money Doesn’t Buy Happiness - Or Does It? A Reconsideration Based on the Combined Effects of Wealth, Income and Consumption," IZA Discussion Papers 1218, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Pommerehne, Werner W., 1978. "Institutional approaches to public expenditure : Empirical evidence from Swiss municipalities," Journal of Public Economics, Elsevier, vol. 9(2), pages 255-280, April. [Downloadable!] (restricted)
  15. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May. [Downloadable!] (restricted)
  16. Feld, Lars P & Savioz, Marcel R, 1997. "Direct Democracy Matters for Economic Performance: An Empirical Investigation," Kyklos, Blackwell Publishing, vol. 50(4), pages 507-38.
  17. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July. [Downloadable!] (restricted)
  18. William Greene, 2004. "The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects," Econometrics Journal, Royal Economic Society, vol. 7(1), pages 98-119, 06. [Downloadable!] (restricted)
  19. Ruut Veenhoven, 2000. "The Four Qualities of Life," Journal of Happiness Studies, Springer, vol. 1(1), pages 1-39, March. [Downloadable!] (restricted)
  20. Bruce Headey & Ruud Muffels & Mark Wooden, 2004. "Money Doesn't Buy Happiness … or Does It? A Reconsideration Based on the Combined Effects of Wealth, Income and Consumption," Melbourne Institute Working Paper Series wp2004n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  21. Frey, Bruno S. & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  22. Lars P Feld & Gebhard Kirchgässner, 2001. "The political economy of direct legislation: direct democracy and local decision-making," Economic Policy, CEPR, CES, MSH, vol. 16(33), pages 329-367, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Justina A.V. Fischer & Benno Torgler, 2006. "The Effect of Relative Income Position on Social Capital," Economics Bulletin, Economics Bulletin, vol. 26(4), pages 1-20. [Downloadable!]
  2. Christian Bjørnskov & Axel Dreher & Justina A.V. Fischer, 2005. "Cross-Country Determinants of Life Satisfaction: Exploring Different Determinants across Groups in Society," University of St. Gallen Department of Economics working paper series 2005 2005-19, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  3. David Dorn & Justina Fischer & Gebhard Kirchgässner & Alfonso Sousa-Poza, 2008. "Direct democracy and life satisfaction revisited: new evidence for Switzerland," Journal of Happiness Studies, Springer, vol. 9(2), pages 227-255, June. [Downloadable!] (restricted)
  4. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "Relative Income Position and Performance: An Empirical Panel Analysis," Working Papers 2006.39, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  5. Fischer, Justina AV, 2008. "Competition and well-being: does market competition make people unhappy?," Working Paper Series in Economics and Finance 697, Stockholm School of Economics. [Downloadable!]
  6. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact Of Relative Income Position On Social Capital," STICERD - Development Economics Papers 46, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
    Other versions:
  7. David Dorn & Alfonso Sousa-Poza, 2007. "‘Voluntary’ and ‘Involuntary’ Early Retirement: An International Analysis," IZA Discussion Papers 2714, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Lars P. Feld & Justina A.V. Fischer & Gebhard Kirchgässner, 2006. "The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  9. Justina A.V. Fischer & Alfonso Sousa-Poza, 2007. "Personality, Job Satisfaction and Health - The Mediating Influence of Affectivity," University of St. Gallen Department of Economics working paper series 2007 2007-31, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  10. Easterlin, Richard A., 2008. "Lost in Transition: Life Satisfaction on the Road to Capitalism," IZA Discussion Papers 3409, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Thomas Maag, 2008. "Economic Correlates of Suicide Rates in OECD Countries," KOF Working papers 08-207, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
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