Bilecik Şeyh Edebali Üniversitesi Sosyal Bilimler Dergisi, vol.9, no.1, pp.62-78, 2024 (Peer-Reviewed Journal)
Happiness plays a
critical role in determining public policies and increasing the welfare of
society. Therefore, studies on measuring happiness and identifying the factors affecting
happiness are very important to guide policy makers. This study aims to identify the main
determinants of happiness using annual data of 27 European countries for the
period 2005-2022 and to demonstrate the validity of the model appropriate for the
collected data. The indicators used in the study, which are likely to be
explanatory of happiness levels, were selected in accordance with the
theoretical literature and included in the models used. These indicators are
macroeconomic variables such as unemployment, inflation, income inequality,
government expenditures, and economic growth, in addition to those presented in
the World Happiness Report (GDP, healthy life expectancy, social support,
freedom of choice, generosity, perception of corruption, positive impact,
negative impact). Depending on the structure and availability of the compiled
data set, the main indicators affecting the happiness levels of countries were
investigated with classical panel data models and panel quantile regression
models. When all constructed models are compared, it is observed that the panel
quantile regression model is more effective in determining the factors
affecting happiness. One of the important findings of the study is that
corruption perception, positive impact and growth variables, which are
insignificant in classical panel data models, are significant at different
quantile points. While inflation and income inequality variables are
statistically insignificant at 75% and 50% quantile points, respectively, they are
significant at other quantiles. These results show that panel quantile
regression evaluates the determinants of happiness in a more detailed way in
countries with different levels of happiness and aims to make an important
contribution to the literature in terms of guiding policy decisions correctly.