Extreme bounds of subjective well-being: economic development and micro determinants of life satisfaction

What is it about?

We track the literature for different proposed determinants of life satisfaction and test whether they are robust across a large number of countries based on their levels of economic development. We find several universal determinants of life satisfaction - health status; income; savings; religiosity; perceptions of societal democraticness, fairness and freedom of choice and control; pride in nationality; confidence in government and justice system; and views about science and technology. There is evidence that as countries develop, the determinants also change in a largely sequential manner.

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Why is it important?

This paper studies the robustness of various literature driven determinants of individual life satisfaction to empirical controls and sample selection. It offers guidance to happiness researchers and policymakers about which variables are important to control for in their analyses. It stresses the need for taking a country's level of economic development into consideration and warns against spurious "statistical significance" of results in the absence of proper robustness checks and inclusion of controls. We also provide some empirical evidence on how economic development affects the determinants of life satisfaction that requires further research and exploration.