Subjective Well-Being and Its Macroeconomic and Institutional Predictors: A Panel Data Analysis of South Asian Countries

Abstract

Most studies that investigated the impact of macro-economic factors (GDP per capita, income inequality, inflation, unemployment, health expenditure, etc.) and institutional factors (i.e., gender equality, corruption etc.) focused on the global context or developed countries or European countries. There was little information about the impact of these objective variables on the subjective well-being of South Asian countries. Simultaneously, these studies focused on the cognitive component of subjective well-being (i.e., life satisfaction, happiness, etc.) and ignored the affective components (i.e., positive affect and negative affect). This study assessed the impact of these objective factors on subjective well-being (including cognitive and affective components) in South Asian countries. The country-level panel data for the study variables from 2007 to 2019 (13 years) were used in this study. Pooled ordinal least square model, fixed-effects model, and random-effects model with fixed-year effect and clustered standard error were estimated. The results suggested that log GDP per capita, income inequality, unemployment, and gender equality were significant predictors of life satisfaction. GDP per capita and gender equality were substantial predictors of positive affect; inflation, health expenditure, and gender equality were significant predictors of negative affect. These findings have importance in policy discussions to improve the well-being of south Asian people. There were some differences in the findings with previous studies investigating the association between study variables in global or developed country contexts. These differences emphasize considering the cultural differences in studying subjective well-being.