Impact of socioeconomic conditions on happiness: Evidence from emerging market economies

• Published date: 01 December 2022
• Author: Neha Kumari,Naresh Chandra Sahu,Dukhabandhu Sahoo,Pushp Kumar
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2782

RESEARCH ARTICLE

Impact of socioeconomic conditions on happiness:

Evidence from emerging market economies

Neha Kumari | Naresh Chandra Sahu | Dukhabandhu Sahoo | Pushp Kumar

School of Humanities, Social Sciences, and

Management, Indian Institute of Technology

Bhubaneswar, Bhubaneswar, India

Correspondence

Neha Kumari, School of Humanities, Social

Sciences, and Management, Indian Institute of

Technology Bhubaneswar, Bhubaneswar,

Odisha 752050, India.

Email: nk24@iitbbs.ac.in

Funding information

This study did not receive financial support

from any funding agency the public,

commercial, or not for profit organisations/

sectors.

The objective of the present study is to examine the impact of socioeconomic

conditions on happiness in 21 Emerging Market Economies (EMEs) with the help of

three sub-samples comprising America, Asia, and EMEA (Europe, Middle East, and

Africa) countries from 2006 to 2019. For this objective, panel corrected standard

error model is used to resolve the problem of cross-sectional dependence, group-

wise heteroscedasticity, and panel autocorrelation. The results of the study reveal

that economic growth plays a positive role in determining the happiness of EMEs of

America and EMEA sample countries. At the same time, globalisation and inflation

affect the happiness of people in American sample countries in a negative way. In the

sample of Asian countries, social support has a substantial impact on happiness. Cor-

ruption in the government and business sectors reduces the happiness of selected

countries of both Asia and America. This article contributes to the existing literature

by first time considering EMEs which have undergone liberalisation reforms and

experienced transformation in their socioeconomic conditions. In conclusion, the

study suggests that GDP per capita and social support positively stimulates happiness

while the perception of corruption negatively impacts happiness in selected EMEs.

These implications can help in building a line of actions for strengthening

anti-corruption institutions and promoting social integrations among these EMEs.

KEYWORDS

EMEA, EMEs, happiness, liberalisation, PCSE

1|INTRODUCTION AND BACKGROUND

The United Nations (UN) has recognised World Happiness Day on

20th March every year since 2013. Happiness

1

is a multidisciplinary

concept that involves the social, economic, political, cultural, spiritual,

and psychological aspects of a person. Discussions related to happi-

ness are not new in the history of economic thought. Smith (1776)

recognised that relative wealth is a significant determinant of happi-

ness. However, Bentham (1989) advocated that society's goals must

be based on the greatest happiness principle.

2

Later, Jevons (1871)

used the law of diminishing marginal utility of money to explain that

more commodities or wealth cannot consistently increase one's satis-

faction or utility. Later, the views of welfare economists have shifted

the world's perspective of wellbeing from profit maximisation to

welfare maximisation (Pigou, 1912; Scitovsky, 1976; Sen, 1985). But

they only analysed the choices and preferences available to the peo-

ple, which are considered as only the means of happiness (Ng, 1997).

In 1972, Bhutan drew the attention of the world due to its new per-

spective of the Gross National Happiness (GNH) index. This index

aims to maintain the balance between material, that is, money and

property, and non-material, that is, culture, environment, spirituality,

society, and community wellbeing of life (Benth Gupta &

Agrawal, 2017). Afterwards, United Nations General Assembly

accepted happiness as an independent goal for all countries of the

world in 2011.

Emerging Market Economies (EMEs) contain 85% of the world

population and contribute to 59% of total world output. Foremost

EMEs like Brazil, South Korea, Russia, China, India, and Indonesia are

Received: 27 November 2020 Revised: 25 August 2021 Accepted: 1 October 2021

DOI: 10.1002/pa.2782

J Public Affairs. 2022;22(Suppl. 1):e2782. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of15

https://doi.org/10.1002/pa.2782