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The Impact of Institutions and Development on Happiness

  • Duha T. Altindag
  • Junyue Xu

This paper demonstrates that institutional factors influence the subjective well-being of individuals differently in rich versus poor countries. A lower level of corruption, a more democratic government and better civil rights increase the well-being of individuals in rich countries, whereas an increase in per capita income has no impact. On the contrary, in poor countries the extent of corruption, democracy and civil rights has no influence on happiness, but an increase in per capita income impacts happiness positively. This stark contrast may be due to the difference of preferences over income and institutional factors.

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File URL: http://cla.auburn.edu/econwp/Archives/2011/2011-08.pdf
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Paper provided by Department of Economics, Auburn University in its series Auburn Economics Working Paper Series with number auwp2011-08.

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Date of creation: Aug 2011
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Handle: RePEc:abn:wpaper:auwp2011-08
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