Economy and happiness in Russia: Empirical analysis

Abstract

The article examines the influence of economic factors on life satisfaction in Russia. To conduct this study, we took RLMS­HSE data from 1994 to 2019. We applied the panel data ordered logit model on the samples of men and women. It has been confirmed that the level of life satisfaction is the higher, the better the financial situation of an individual in absolute and relative terms. Maintaining a balance in the distribution of time between work and leisure also has a significantly positive effect on the level of life satisfaction. However, the impact of objective economic factors on life satisfaction in Russia is mediated by their subjective perception, which plays a decisive role. Since when it includes in the model, the objective parameters become insignificant. The results are consistent with similar works conducted on other countries’ data and spatial data. They deepen the understanding of the impact of the economic component on the subjective well­being of Russians. The conclusion about the significant influence of the subjective perception of economic reality on happiness in Russia is of practical importance for the guidelines of economic and social policy.