Economic Growth and Happiness: A Cross-Nations Path Analysis Model

This paper analysis direct and indirect impacts of economic development indicators that consist of economic growth, human development and global competitiveness, on happiness. Cross-section data on economic growth, human development, global competitiveness and happiness were collected from 123 countries and employed to a path analysis model. The result showed that directly, in Path-1 the impact of economic growth on happiness was negative and significant. Indirectly, the impacts of economic growth on happiness varied depend on the path. In Path-7, P43-P31, the impact of economic growth on happiness through global competitiveness was positive and significant. In Path-8, P43-P32-P21, the impact of economic growth on happiness through global competitiveness and human development was negative, but statistically was not significant. Finally, in Path-9, P42-P21, the impact of economic growth on happiness through human development was negative but statistically was not significant. The implication of this finding was that economic growth no longer important factor in development, especially when development aimed to make people happy.

Pressacademia, 2021

Purpose-The purpose of this study is to analyze the relationship between economic growth (or economic performance) and happiness (life satisfaction, well-being). Happiness economics is a very contemporary research field, attracting economists, sociologists, psychologists and other scientists to investigate it, yet there is many rooms for exploration. Money is not everything, so how much does it matter precisely? This debate has divided the researchers in two parties: the ones who are arguing that economic growth and happiness go hand in hand and the ones who say that there is no relationship between these two concepts and because of this fact the constant aspiration for economic growth lost its meaning, and does more harm than benefit. Methodology-We started by analyzing the accurate and detailed definition of the GDP and include information about it in order to better understand its function and applicability. In the following, we have analyzed the concept of happiness, the way it can be defined and measured. Then, we have analyzed the given economic theories which relate to these two concepts and describe a relationship between them. We analyzed four countries (Denmark, Costa Rica, Romania, and India) mostly based on their economic and well-being situation, and the available indicators which have an effect on well-being. We examined these countries because two of them had a very high level of wellbeing, one had a medium level and one had a low level of well-being. There were examples where the money had a good effect on happiness and also where not. In Denmark and Costa Rica money was not the only (or any reason) because for the high level of well-being, other factors, not really related to money, were high as well. In Romania, the GDP and happiness have increased at the same time. In India, the increasing GDP has brought in fact diminishing happiness. Findings-In our paper, we have found out that there are various theories built upon this question, as controversial studies and opinions. Some researchers say that GDP has no effect on the level of well-being. On the contrary, more recent studies generally prove the other side, that GDP and happiness go hand in hand. There was one common factor in almost every research: money has a diminishing marginal utility on happiness, for a very poor country additional income does bring a high level of happiness, but for a very rich country it is almost invisible. It needs to be mentioned that growth and development do not concern just quantitative increases in production, consumption, income, or any other measures. They generally also involve qualitative changes, like education, healthcare, or political freedom. These factors certainly develop the level of well-being in a country, and for their development, there is a need for economic growth. On the other hand, economic growth does not guarantee the development of these factors, as we can see in the example of India. In my opinion, the best approach is not to focus on economic growth anymore, but on the question, how could we use this growth in GDP in order to improve our conditions and make people happier? Conclusion-Meanwhile measuring happiness is much more complex, although we have many measures trying to assess it: Gross National Wellbeing, Happiness Index, Genuine Wealth Index Happy Planet Index, OECD Better Life Index, Human Development Index, Well-being index, Social Development Index, and many others, but they are not widely accepted because of their subjectivity and non-accuracy. Even more, it is much more difficult to improve these measures in a country because they depend on many factors, some of which are not even entirely clarified than to improve GDP, which relies on objective, strictly numerical measures. The starting point of nearly every happiness and welfare measure is self-reported happiness, which given its nature is very subjective. This fact again provokes skepticism and antipathy in many people's minds and tends to state that these measures are not relevant and should not be based upon. Economic growth is one indicator that is widely used and analyzed, but happiness indicators are not so frequently discussed. On the other hand, we think there is a need to do it, that is why there is an emerging interest among researchers towards it.

Human happiness is based on the overall development of an economy, which is also supported by world happiness index which includes gross domestic product per capital, life expectancy and social support and Freedom. Happiness is considered a proper measure of social progress and goal of public policy. The concept of happiness and well-being are very likely to help guide progress towards sustainable development. If we talk about economic development, it includes overall development of an economy i. e. growth in National income, health facility, education facility and government policy etc. India ranks 117 out of 158 nations on global happiness index. The other countries in top five are Switzerland, Iceland, Denmark, Norway and Canada. By Press trust of India, United published on April 24, 2015. It is a big thing to study, that why there is a big difference among countries. Many LDCs (Lower developed countries) face the problems to decrease the gap among different income groups. The cause of this problem is lack of resources which fulfils the basic need. The study focuses on all facts which affect Indian Economical development, and human happiness. INTRODUCTION If we talk what makes people happy in life? This is a crucial question that has the potential to shake up economic development of an economy. If a person enjoys all the facilities provided by the government and he says that he is happy in his life the thing is that human happiness depends upon the gross domestic product of an economy, life expectancy, social support and freedom. It also considers a proper measure of social pro gress and goal of public policy, and all conditions that make a person happy. Economic development refers to the process whereby the people of the country or region come to utilize the resources available to bring about a sustained increase in per capita production of goods and services; it also includes improvement in health facilities, education facilities, and also increases in National income. There are two terms one is economic growth and the second economic development where Economic growth is a quantitative concept which includes increase in national income, per capita income, while economic development is a qualitative concept which includes o ver all development of people of a country. If we talk about the relation blow economic development and human happiness, we can say that human happiness is totally based on economic development because the terms of economic development and human happiness are same.

2009

Based on point-of-time comparisons of happiness in richer and poorer countries, it is commonly asserted that economic growth will have a significant positive impact on happiness in poorer countries, if not richer. The time trends of subjective well-being (SWB) in 13 developing countries, however, are not significantly related to predictions derived from the cross sectional relation of happiness to GDP per capita. The point-of-time comparison leads to the expectation that the same absolute increase in GDP per capita will have a bigger impact on SWB in a poorer than a richer country. In fact there is no significant relation between actual trends in SWB and those predicted from the cross sectional relationship. Nor is a higher percentage rate of growth in GDP per capita significantly positively associated with a greater improvement in SWB. In the developing countries studied here a greater increase in happiness does not accompany more rapid economic growth. These conclusions hold true ...

2016

The era of GNP and GDP has been characterized by a huge global rise in living standards and in wealth. At the moment, though, GDP is embattled. Economists and national leaders are increasingly talking about measuring a country’s status with other metrics and even with a squishy-seeming concept like “happiness.” Any GDP expansion should “focus on economic aspects of non-market and near-market activities and not attempt to measure the welfare effect of such interactions.” Even then, they warned, “it is critical that such an expansion of the scope of the accounts not occur at the expense of funds needed to maintain, update, and improve the existing GDP accounts.” Money can’t buy happiness. But it could perhaps buy the ability to measure it. So we need to improve social indicators to make society happy. This study is conducted to explore how economic development and happiness is interrelated to each other and that help many countries in their planning, strategies and policies to overcom...

Global Handbook of Quality of Life, 2014

Happiness and Economic Growth: The Evidence * Long term trends in happiness and income are not related; short term fluctuations in happiness and income are positively associated. Evidence for this is found in time series data for developed countries, transition countries, and less developed countries, whether analyzed separately or pooled. Skeptics, who claim that the long term time series trend relationship is positive, are mistaking the short term association for the long term one, or are misguided by a statistical artifact. Some analysts assert that in less developed countries happiness and economic growth are positively related "up to some point," beyond which the association tends to become nil, but time series data do not support this view. The most striking contradiction is China where, despite a fourfold multiplication in two decades in real GDP per capita from a low initial level, life satisfaction has not improved.

Economic Inquiry, 2013

If society's goal is to increase people's feelings of well-being, economic growth in itself will not do the job. Full employment and a generous and comprehensive social safety net do increase happiness. Such policies are arguably affordable not only in higher income nations but also in countries that account for most of the population of the less-developed world. These conclusions are suggested by an analysis of a wide range of evidence on happiness in countries throughout the world.

This paper is aimed to report a research that analyse the relation between human development, global competitiveness and happiness as well as the impact of human development, both direct and indirect impacts, on happiness, with global competitiveness as moderator variable. Cross-nation data on human development, global competitiveness and happiness indices were collected from 123 countries and employed in a path analysis model. The results show that the correlation between human development and happiness was positive and very strong. The countries that had high happiness index were the countries with high human development index. The correlation between human development and global competitiveness was positive and very strong. The correlation between global competitiveness and happiness was also positive and strong. The direct impact of human development on happiness was positive and significant. The indirect impact of human development on happiness, again, was positive and significant. It is then suggested that human development sustainably be promoted in order to make nations competitive globally and then make the people happy.

IASSI Quarterly: Contributions to Indian Social Science, 2022

Does development lead to happiness, this is the main question which we attempted to analyze in this paper. Researchers trying to measure the association between happiness and development widely differ in their observations depending upon the data (whether cross sectional or time series; short-term or long-term) and measure of development (level of development or pace of development) used by them. Our argument is that level of development (not the pace of development) has stronger positive linkages with the level of happiness across the nations whether developed or developing. The study also argues that slow economic growth alone is not sufficient to bring measurable changes in happiness. The reason is that people consider lower economic growth as insignificant from the perspective of making changes in their standard of living and they attach lower happiness weight. Using World Development Indicators (WDI) database of the World Bank, the paper applies panel data econometrics and parametric tests for data analysis. The study concludes that development does lead to happiness and nations experiencing long episodes of high economic growth exhibit high positive rise in happiness