Economic policy and happiness: an empirical analysis of panel data from the MENA region

Abstract

The controversy over the scientific evidence for subjective well-being has raged unabated for over a century. A considerable amount of literature has been published focusing on the economics of happiness only in developed economies. The aim of our article is to provide an up-to-date understanding of the theoretical underpinnings and empirical analyses that underpin the policy-driven use of the term "happiness economics".

Aware of the existence of divergences and mismatches between developed and emerging economies, we have attempted to shed new light on the determinants of the happiness economy in selected MENA countries. Furthermore, this research represents a crucial starting point that can help academics and researchers test the hypotheses of our model using different measures of variables and making a comparison between the results in order to demystify the determinants of subjective well-being.

The study focused on a single context, the MENA region, specifically 13 countries, including the Moroccan context over seven years (2013-2019). In addition, data were collected from the annual reports of the United Nations and the World Bank. Given the longitudinal nature of the data, our research model was estimated using Ordinary Least Squares, Fixed Effects and Random Effects Model.

Based on the results obtained, there are positive and significant relationships between the development index, gross domestic product per capita and the happiness index. However, mortality rate, unemployment rate and corruption have a significant negative impact on the level of happiness.

Our study, like previous studies, has certain limitations such as low sample size, measurement of variables.

In addition, the results of the study can be used by decision-makers to work on activities that tend towards the realization of the happiness economy for the MENA region.

Keywords: Happiness, Subjective well-being, Economic policies. Panel data

JEL Classification: D68, J 08, I30

Paper type: Empirical research