Exploring Disparities in Happiness Index Rankings: A Comparative Study between Selected Countries

Abstract

This study aims to investigate the impact of economic and certain social and governance factors on the happiness index, with a focus on estimating their relative contribution to disparities among groups of countries classified according to income levels (high, upper-middle, lowermiddle, and low). This study employs a multiple regression technique to analyse data collected from the World Bank database and the World Happiness Report spanning the years 2010 to 2019 to compare the four groups of countries categorized by the World Bank according to their income levels of each income group. The findings of this study show that healthcare expenditure and government effectiveness increase people’s happiness in all four groups of countries. Furthermore, the findings suggest that fiscal contribution matters for people’s happiness only in high income and upper middle-income countries. Additionally, infrastructure, government effectiveness, political stability and absence of violence and terrorism, rule of law and voice and accountability matter for the happiness of people in lower-middle income countries. All variables, except fiscal contribution, have a significant impact on the happiness of people in low-income countries. This paper is the first that analyses how economic and certain social and governance factors relatively impact happiness of peoples in selected four groups of countries that classified according to their all four income levels.