Sometimes your best just ain’t good enough: the worldwide evidence on subjective well-being efficiency

0542072 - NHÚ 2022 RIV GB eng J - Journal Article
Nikolova, M. - Popova, Olga
Sometimes your best just ain’t good enough: the worldwide evidence on subjective well-being efficiency.
B E Journal of Economic Analysis & Policy. Roč. 21, č. 1 (2021), s. 83-114. ISSN 1935-1682. E-ISSN 1935-1682
Institutional support: RVO:67985998
Keywords : subjective well-being * efficiency analysis * relative happiness
OECD category: Applied Economics, Econometrics
Impact factor: 0.905, year: 2021
Method of publishing: Open access
https://doi.org/10.1515/bejeap-2019-0396

Most of the studies on subjective well-being focus on the determinants of absolute life satisfaction or happiness levels. This paper asks an important but understudied question, namely, could countries achieve the same or even higher subjective well-being by using the same resources more efficiently? We provide the first country panel evidence on whether nations efficiently transform their endowments (income, education, and health) into subjective well-being and which factors influence the conversion efficiency. Using data on 91 countries from 2009 to 2014, we find that that well-being efficiency gains are possible worldwide. We show that poor labor market conditions as proxied by unemployment and involuntary part-time employment are associated with lower ‘subjective well-being efficiency,’ while social support, freedom, and the rule of law improve it. These findings are useful to policymakers in helping identify inefficiencies, reducing wasteful resource use, and developing policies that promote sustainable development and human well-being. Our results are robust to a battery of sensitivity checks and raise policy-relevant questions about the appropriate instruments to improve subjective well-being efficiency.
Permanent Link: http://hdl.handle.net/11104/0319562