Predicting the gross domestic product (GDP) of 289 NUTS regions in Europe with subjective indicators for human and social capital

Most of the aggregate-level analyses of the relationship between objective and subjective measures for well-being have limited themselves to the measures of national gross domestic product (GDP) and mean life satisfaction. We develop this line of research by embedding the analysis into the context of 289 NUTS (Nomenclature des Unités Territoriales Statistiques) regions in Europe and replacing the simple life satisfaction measure with measures of active human functioning. We suggest that the measures of personal and social well-being, as they are operationalized in the 6th Round of the European Social Survey (ESS) questionnaire, can be treated as subjective indicators for social and human capital and, thereby, can be associated with the regional level GDP in cross-sectional analysis. The empirical analysis shows that the indicator for ‘social trust’ appears to have a positive and significant correlation with regional GDP. The analysis also distinguishes another form of social capital; ‘social contact and support’, reflecting the relative frequency and quantity of social support, which also shows a positive relationship with regional GDP. Concerning subjective human capital, the strongest predictor for regional GDP appears to be the aggregated sense of ‘competence and meaning’ in the regions. These effects proved robust after including the objective control variables (population density, intramural research and development (R&D) expenditure, share of tertiary-educated population and employment).