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Free to Be Happy: Economic Freedom and Happiness in US States

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  • Jeremy Jackson

    (North Dakota State University)

Abstract

While the measurement of subjective well-being and its usefulness as a policy objective is a matter of contention, a burgeoning field of happiness economics is emerging. This paper examines the relationship between the institutions of economic freedom and happiness as reported by respondents to the Generalized Social Survey (GSS) in the United States. GSS responses are matched via geocode to state of residence. This allows individual responses in the GSS to be matched to institutional characteristics of the state of residence. A novel contribution of this study is that analysis of the effect of economic freedom on reported happiness is conducted both at the individual level and using state averages. It is found that the level of economic freedom in US states has a positive effect on both individual reported happiness and state average happiness. Dynamic panel analysis is also conducted both as a robustness check and in an effort to control for endogeneity. This confirms the relationship as positive and is suggestive of a causal positive impact of economic freedom on average state happiness.

Suggested Citation

  • Jeremy Jackson, 2017. "Free to Be Happy: Economic Freedom and Happiness in US States," Journal of Happiness Studies, Springer, vol. 18(4), pages 1207-1229, August.
    • Handle: RePEc:spr:jhappi:v:18:y:2017:i:4:d:10.1007_s10902-016-9770-9
    DOI: 10.1007/s10902-016-9770-9
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    References listed on IDEAS

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    Cited by:

    1. Hadsell, Lester & Jones, Adam T, 2020. "The company you keep: Satisfaction with life, economic freedom, and preference-policy mismatch," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 642-657.
    2. Guangyan Chen & Feng Qiu & Xiaowen Dai & Hongxing Lan & Jiahao Song, 2022. "Research on the Influence of Informal Employment on Residents’ Happiness in China: Empirical Analysis Based on CLDS Data," IJERPH, MDPI, vol. 19(15), pages 1-14, July.
    3. Lisa Windsteiger & Michael Ahlheim & Kai A. Konrad, 2022. "Curtailment of Civil Liberties and Subjective Life Satisfaction," Journal of Happiness Studies, Springer, vol. 23(5), pages 2157-2170, June.
    4. Zachary D. Blizard, 2023. "The Interaction Effect of Economic Freedom and Economic Development on Corruption in US States," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 38(Summer 20), pages 17-37.
    5. Ahmadiani, Mona & Hyde, Adam S. & Jackson, Jeremy, 2019. "Creative Destruction, Job Reallocation, and Subjective Well-Being," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 290966, Agricultural and Applied Economics Association.
    6. Jeremy Horpedahl & Jeremy Jackson & David Mitchell, 2019. "Is Economic Freedom the Hidden Path to Social Justice?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 34(Winter 20), pages 55-74.
    7. Jackson, Jeremy, 2019. "Happy partisans and extreme political views: The impact of national versus local representation on well-being," European Journal of Political Economy, Elsevier, vol. 58(C), pages 192-202.
    8. Jackson, Jeremy & Beaulier, Scott, 2023. "Economic freedom and philanthropy," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 148-183.

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