eprintid: 13511
rev_number: 6
eprint_status: archive
userid: 1
dir: disk0/00/01/35/11
datestamp: 2012-07-04 14:55:46
lastmod: 2021-06-09 13:25:16
status_changed: 2012-08-15 09:06:25
type: workingPaper
metadata_visibility: show
creators_name: Gehring, Kai
title: Benefit or burden? Unraveling the effect of economic freedom on subjective well-being
ispublished: pub
subjects: ddc-330
divisions: i-181000
keywords: economic freedom , happiness , life Satisfaction , government size 
abstract: Does economic freedom increase the utility of an average citizen? Public choice theory in particular has emphasized the shortcomings of governments and voting processes, and the advantages of relying on markets and individual decision making. However, an increasing amount of people are refusing to accept classical measures like GDP as signs of improvements in welfare. Data on subjective well-being allow economists to test if economic freedom really does improve the overall quality of life. However, existing studies have either failed to control for necessary control variables or lacked theoretical foundation. This paper explains economic and psychological reasons why the influence of economic freedom reaches beyond material well-being. Empirical results from a panel of 86 countries over the 1990-2005 period suggest that economic freedom indeed has a positive effect on happiness. Specifically legal security and property rights, access to sound money, and freedom from excessive regulation are significantly positive throughout the analysis. Regarding freedom to trade, the results show that particularly regulatory trade barriers have a significant negative effect. The positive effect depends on socio-demographic characteristics and is, on average, stronger for poorer countries and left-wing voters, and varies with age. 
class_scheme: jel
class_labels: H11, A13, D60
date: 2012-07
date_type: published
id_scheme: DOI
id_number: 10.11588/heidok.00013511
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0531
ppn_swb: 1651567948
own_urn: urn:nbn:de:bsz:16-opus-135118
language: eng
bibsort: GEHRINGKAIBENEFITORB201207
full_text_status: public
series: Discussion Paper Series / University of Heidelberg, Department of Economics
volume: 0531
citation:   Gehring, Kai  (2012) Benefit or burden? Unraveling the effect of economic freedom on subjective well-being.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/13511/1/Gehring_2012_dp531.pdf