Navigating the Happiness Economics Landscape: Mapping the Influences on Life Satisfaction and Possible Interventions

Abstract

This study explores factors that influence subjective well-being in low- and middle-income countries by analysing unique individual- and country-level data. The study focuses on several unexplored determinants including personality traits, economic shocks and cultural differences. UtilisingWorld Bank’s STEP household survey and WVS we find that extraversion, agreeableness and emotional stability are positively associated with well-being. Both conscientiousness and decision-making are shown to be negatively correlated with well-being. Furthermore, we find that women’s subjective well-being is more negatively pronounced by increased conscientiousness compared to men, and the same relationship holds for grit. Additionally, we find that children experiencing economic shocks show a lower level of well-being later in life. From a policy perspective, we find a positive and significant relationship between access to health insurance and well-being. Indicating that having access to health insurance contributes to a, on average, higher level of subjective well-being. These findings can be of use to future policymakers but should also be further researched with the aim of causality.