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Happiness, Economy and Institutions

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  • Bruno S. Frey
  • Alois Stutzer

Abstract

A cross-regional econometric analysis suggests that institutional factors in the form of direct democracy (via initiatives and referenda) and of federal structure (local autonomy) systematically and sizeably raise s elf-reported individual well-being. This positive effect can be attributed to political outcomes closer to voters' preferences, as well as to the procedural utility of political participation. Moreover, the results of "standard" microeconometric well-bein g functions previously published for other countries are generally supported. Unemployment has a strongly depressing effect on happiness. A higher income level raises happiness, however, only to a small extent.

Suggested Citation

  • Bruno S. Frey & Alois Stutzer, 2000. "Happiness, Economy and Institutions," CESifo Working Paper Series 246, CESifo.
    • Handle: RePEc:ces:ceswps:_246
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    More about this item

    Keywords

    Subjective well-being; institutions; direct democracy; unemployment;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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