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Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects

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  • Fischer, Justina AV

Abstract

Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country panel framework that accounts for unobserved, time-invariant country heterogeneity. This study also shows that using supra-national region dummies (by geography or language) in a country-random effects model appears to be a sufficient substitution for omitted country fixed effects.

Suggested Citation

  • Fischer, Justina AV, 2010. "Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects," MPRA Paper 22272, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:22272
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    14. David Dorn & Justina Fischer & Gebhard Kirchgässner & Alfonso Sousa-Poza, 2008. "Direct democracy and life satisfaction revisited: new evidence for Switzerland," Journal of Happiness Studies, Springer, vol. 9(2), pages 227-255, June.
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    17. Fischer, Justina AV, 2009. "Subjective Well-Being as Welfare Measure: Concepts and Methodology," MPRA Paper 16619, University Library of Munich, Germany.
    18. Bjørnskov, Christian & Drehe, Axel & Fischer, Justina A.V., 2008. "On decentralization and life satisfaction," Economics Letters, Elsevier, vol. 99(1), pages 147-151, April.
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    Cited by:

    1. Fischer, Justina AV, 2010. "Immigration, integration and terrorism: is there a clash of cultures?," MPRA Paper 27690, University Library of Munich, Germany.
    2. Abiodun Omidiji & Nives Botica Redmayne & Dimu Ehalaiye & Ernest Gyapong, 2024. "Internal audit in microfinance institutions‐ evidence from transitional and developing economies," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(1), pages 109-141, January.
    3. repec:old:wpaper:342 is not listed on IDEAS
    4. Heinz Welsch & Jan Kühling, 2011. "Anti-Inflation Policy Benefits the Poor: Evidence from Subjective Well-Being Data," Working Papers V-343-11, University of Oldenburg, Department of Economics, revised Dec 2011.
    5. Olayemi M. Olabiyi, 2020. "Electoral participation and household food insecurity in sub‐Saharan Africa," African Development Review, African Development Bank, vol. 32(3), pages 392-403, September.
    6. Klöble, Katrin, 2021. "A behavioural perspective on the drivers of migration: Studying economic and social preferences using the Gallup World Poll," IDOS Discussion Papers 4/2021, German Institute of Development and Sustainability (IDOS).
    7. Gehring, Kai, 2014. "Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being," Working Papers 531, University of Heidelberg, Department of Economics.
    8. Iddisah Sulemana, 2015. "The Effect of Fear of Crime and Crime Victimization on Subjective Well-Being in Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(3), pages 849-872, April.
    9. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2019. "Health outcomes, health inequality and Mandarin proficiency in urban China," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    10. repec:zbw:hohpro:343 is not listed on IDEAS
    11. repec:zbw:hohpro:342 is not listed on IDEAS
    12. Haining Wang & Zhiming Cheng & Russell Smyth, 2016. "Language, Health Outcomes and Health Inequality," Monash Economics Working Papers 43-16, Monash University, Department of Economics.
    13. Gehring, Kai, 2013. "Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being," World Development, Elsevier, vol. 50(C), pages 74-90.
    14. Heinz Welsch & Jan K¨¹hling, 2015. "Macroeconomic Preferences by Income and Education Level: Evidence from Subjective Well-Being Data," Review of Economics & Finance, Better Advances Press, Canada, vol. 5, pages 15-32, August.
    15. Olayemi M. Olabiyi, 2022. "The effect of bureaucratic corruption on household food insecurity: evidence from Sub-Saharan Africa," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(2), pages 437-450, April.
    16. Gehring, Kai, 2012. "Benefit or burden? Unraveling the effect of economic freedom on subjective well-being," Working Papers 0531, University of Heidelberg, Department of Economics.
    17. repec:old:wpaper:343 is not listed on IDEAS
    18. Heinz Welsch & Jan Kühling, 2011. "Comparative Economic Performance and Institutional Change in OECD Countries: Evidence from Subjective Well-Being Data," Working Papers V-342-11, University of Oldenburg, Department of Economics, revised Dec 2011.

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    More about this item

    Keywords

    Happiness; life satisfaction; subjective well-being; quality of life; institutions; democracy; rule of law; political constraints; policy implications; panel econometrics;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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