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

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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

  • Justina AV Fischer, 2010. "Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects," CEIS Research Paper 164, Tor Vergata University, CEIS, revised 28 May 2010.
  • Handle: RePEc:rtv:ceisrp:164
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    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
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    Cited by:

    1. repec:zbw:hohpro:343 is not listed on IDEAS
    2. repec:zbw:hohpro:342 is not listed on IDEAS
    3. Fischer, Justina AV, 2010. "Immigration, integration and terrorism: is there a clash of cultures?," MPRA Paper 27690, University Library of Munich, Germany.
    4. Haining Wang & Zhiming Cheng & Russell Smyth, 2016. "Language, Health Outcomes and Health Inequality," Monash Economics Working Papers 43-16, Monash University, Department of Economics.
    5. repec:old:wpaper:342 is not listed on IDEAS
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. repec:old:wpaper:343 is not listed on IDEAS
    11. 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.
    12. 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.
    13. 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.

    More about this item

    Keywords

    Happiness; life satisfaction; well-being; quality of life; institutions; democracy; rule of law; political constraints; policy implications; panel econometrics;

    JEL classification:

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

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