Exploring Disparities in Happiness Index; among Countries with Varied Income Levels

Abstract

This study examines the comparative influence of socioeconomic and governance factors on the happiness index, focusing on their relative contributions to disparities among country groups categorized by income levels: high, upper-middle, lowermiddle, and low. Using multiple regression analysis, data from the World Bank and the World Happiness Report (2010–2019) are analyzed with Fixed and Random effects models to assess the impact of these factors. The findings indicate that GDP per capita and control of corruption positively influence happiness in high-income countries, with fiscal contributions also playing a significant role. Conversely, healthcare expenditure shows a negative correlation with happiness across all income levels, suggesting inefficiencies in healthcare systems. For lower-income countries, infrastructure, governance quality, and regulatory frameworks are crucial determinants of happiness. The research underscores the varying impact of economic, social, and legal factors on happiness across different income levels, with governance improvements and healthcare system reforms identified as key areas for enhancing well-being. The study highlights the importance of context-specific strategies, where low-income countries should focus on infrastructure, corruption control, and healthcare efficiency, while high-income nations may benefit from improving governance and economic stability. This is the first study to analyze the relative impact of these factors across four groups of countries classified by income.