(Un)Happiness, where are you? Evaluating the relationship between urbanity, life satisfaction and economic development in a regional context

Prior literature suggests that, among the so-called ‘developed economies’, residing in urban contexts is associated with lower life satisfaction. Using data from the European Social Survey (ESS) and Eurostat, we contribute to this literature by focusing on three different indicators of urbanity (subjective domicile, population density and living in a dominant urban region) in a multilevel modelling context in order to define where exactly the relatively lower life satisfaction can be found. Moreover, we account for the level of economic development at both regional and national levels. The results show that subjective domicile is strongly associated with life satisfaction, whereas regional gross domestic product (GDP) and other urbanity indicators are insignificant. Our results also highlight the relatively higher life satisfaction in rural surroundings in more developed countries. We conclude by noting that future contributions to the literature on urban–rural life satisfaction differences should utilize panel data, making it possible to address the spatial sorting versus contextual effects debate, and focus on investigating the higher level determinants at the country level that define the existence of urban–rural differences in life satisfaction within a country.