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Impact of innovation on happiness

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  • Sharon Hadad

Abstract

This study examines the relation between national innovation and national happiness using cross-sectional data from 127 countries. Innovation is measured by the Innovation Output Sub-Index from the Global Innovation Index, whereas happiness is proxied by the Ladder Score in the 2024 World Happiness Report. To address potential endogeneity, we apply two-stage least squares estimation, using the Innovation Input Sub-Index as an instrument. The results suggest that innovation has a significant positive effect on happiness, particularly in countries with lower gross domestic product (GDP) per capita. However, the marginal benefit declines as income rises, becoming negligible or even negative beyond a GDP per capita of approximately USD 62,500. These findings suggest that innovation's impact on national happiness varies systematically with economic development, with stronger effects observed in lower-income countries. This study contributes to the economics of happiness by identifying income-based heterogeneity in the innovation-happiness link and offering relevant policy insights.

Suggested Citation

  • Sharon Hadad, 2026. "Impact of innovation on happiness," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 10(3), pages 279-296.
    • Handle: RePEc:ids:ijhdev:v:10:y:2026:i:3:p:279-296
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