Correlational findings

Study Rode (2013): study ZZ World samples 1995

18+ years, general public, 87 countries, 1995-2005
Survey name:
WorldValuesSurvey 1994-2008
N = 180000
Non Response:
Interview: face-to-face


Authors's label
Economic freedom
Our Classification
Consists of five domains:
a: Size of government
b: Legal system and property rights
c: Sound money
d: Freedom to trade internationally
e: Regulation

Economic freedom = (a+b+c+d+e)/5

Ranges from 1 (least free) to 10 (most free).

Observed Relation with Happiness

Happiness Measure Statistics Elaboration / Remarks O-SLW-c-sq-n-10-a b = +.28 p < .01 AVERAGE happiness by economic freedom
In 87 nations

b controls for:
-average memberships
-importance of God
-log GDP per capita (PPP)
-unemployment rate
-divorce rate
O-SLW-c-sq-n-10-a b = +.22 p < .01 b additionally controls for:
-regional dummies
-period dummies
O-SLW-c-sq-n-10-a b = +.19 p < .10 In 61 poor countries (GDP per capita less than $20,000) O-SLW-c-sq-n-10-a b = +.15 ns In 43 rich countries (GDP per capita more than $10,000)

Similar results are obtained when economic freedom is instrumented by:
- air distance to New York, Rotterdam, and Tokyo
- the fraction of the population that speaks English as a mother tongue

In sum: Economic freedom is positively associated with average life satisfaction in nations.