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Economic Freedom and Life Satisfaction : A Cross Country Analysis

Author

Listed:
  • Graafland, J.J.

    (Tilburg University, Center For Economic Research)

  • Compen, B.

Abstract

Abstract: This paper estimates the relationship between various sub-indicators of economic freedom and life satisfaction for 122 countries. The estimation results show that life satisfaction is positively related to the quality of the legal system and protection of property rights. For poor countries, freedom of trade fosters life satisfaction as well. Life satisfaction is independent from the size of the government and sound money and tends to be negatively related to low regulation. If the relationship between life satisfaction and economic freedom is controlled for income per capita, life satisfaction is independent from economic freedom. This indicates that the relationship between life satisfaction and economic freedom is mediated by income per capita.

Suggested Citation

  • Graafland, J.J. & Compen, B., 2012. "Economic Freedom and Life Satisfaction : A Cross Country Analysis," Discussion Paper 2012-038, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:b80a9d8e-af55-43fc-bad2-94ef8fa1793e
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    File URL: https://pure.uvt.nl/portal/files/1429564/2012-038.pdf
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    References listed on IDEAS

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    Cited by:

    1. Nikolova, Milena, 2016. "Minding the happiness gap: Political institutions and perceived quality of life in transition," European Journal of Political Economy, Elsevier, vol. 45(S), pages 129-148.

    More about this item

    Keywords

    economic freedom; free trade; government size; income per capita; life satisfaction; regulation; respect of private property; sound money;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D60 - Microeconomics - - Welfare Economics - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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