Investigating The Effect Of Per Capita Income On How Economic Factors Affect Happiness

Abstract

Due to the great effect that happiness has on general dynamism and mobility and as a result increase efficiency and productivity and ultimately economic growth and development, recognizing and analyzing the factors affecting happiness is of particular importance. In the present study, the effect of per capita income on how variables such as per capita income, income inequality and government expenditure affect happiness for 100 countries in the period 2005 to 2016 has been analyzed by the panel threshold regression method in the form of three hypotheses. The results, in line with previous studies, show that the relationship between happiness and per capita income, health spending and government expenditure is positive and the relationship between happiness and income inequality, inflation and unemployment is negative. In each hypothesis, only one threshold value for per capita income was identified as a threshold variable. With increasing per capita income (threshold variable), the amount of per capita income impact on happiness has decreased and the amount of impact of government expenditure on happiness has increased and the amount of income inequality impact on happiness has decreased. Therefore, it seems that the development of appropriate policies to reduce income inequality and increase government expenditure, can lead to greater happiness and vitality for society, which in turn, will increase productivity and economic growth.