IZA DP No. 1716: What Buys Happiness? Analyzing Trends in Subjective Well-Being in 15 European Countries, 1973-2002
published in: Journal of Happiness Studies, 2008, 9 (2), 317-330
Trends in life satisfaction are examined across 15 European countries employing a modified version of Kendall's Tau. Analyses show that GDP growth relative to growth in the preceding period is a significant determinant of the trends; the same holds for the growth in life expectancy while the contemporaneous growth in the current account balance exerts a positive influence. Relative unemployment growth becomes significant when interacted with a measure of the long-run political ideology of the median voter. The effects of relative GDP growth vary with the political ideology variable.