The Role of Macro-Economic Variables for Determining Happiness: The Empirical Evidence from South Asian Region

Abstract

To be happy is a crucial matter for individuals. A person starving cannot be happy unless he or she is a priest. Rather there is no guarantee that a person with countless wealth is happy. All these uncertainties may possess a generalization in a macro sense. The objective of this paper is to check how much relevant the macroeconomic variables are in the case of happiness determination at a macro level. To determine this, we would go for Random Effect Panel data regression for six countries for nine years. These countries are Bangladesh, India, Pakistan, Sri Lanka, Nepal and Afghanistan. Bhutan and Maldives are omitted for the lack of the availability of data. The time series lie between 2007 to 2015. The chosen macro-economic variables are money supply, labor force size, HDI and GDP components in expenditure approach. According to Forbs citation, Legatum Prosperity Index is used as happiness indicator as GNH dataset is not available. Initial panel regression result has already showed positive evidence toward such determination and this result would encourage macroeconomic policymakers to formulate policy maintaining close relation to happiness.