IZA DP No. 15315: Influence of Freedom of Choice on Happiness
The literature on happiness shows that there are many factors that influence a person’s happiness. Extending previous studies, we investigate the role of the freedom of choice as a key contributing construct in influencing a person’s happiness. We define two hypothetical sub-constructs for the freedom of choice to fully develop a model of happiness. We name those hypothetical sub-constructs (latent variables) as volitional and non-volitional choices, each of which is measured by a variety of indicators (observed variables). The selected indicators are mainly from the social dimensions of happiness within working and living environments, which affect the quality-of-life people enjoy. We use the structural equation modeling approach to test our model. We restrict our empirical studies to four East Asian countries, which are South Korea, Japan, Taiwan, and China. The obtained results of this study, confirm that happiness tends to be closely related to interpersonal connectedness and individuals’ experiences within shared relationships in certain countries. Our findings open new insights on how happiness can be considered as an emerging outcome of the interplay between personal characteristics and societal interactions. Findings of this study can be applied in empowering the cognitive dimension of social capital within an organization.