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Published in: Social Indicators Research 1/2017

08-10-2015

Money, Trust and Happiness in Transition Countries: Evidence from Time Series

Authors: Stefano Bartolini, Małgorzata Mikucka, Francesco Sarracino

Published in: Social Indicators Research | Issue 1/2017

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Abstract

Trends of subjective well-being (SWB) in transition countries are peculiar: they show substantial changes that are more strongly correlated with the trends of GDP than in other developed countries. This paper examines the role of the trends of GDP and of social trust in predicting the trends of well-being. We find that the strength of the relationship between social trust and SWB over the medium-term is comparable to that of GDP. We conclude that in the medium-term, even in countries where material concerns strongly affect well-being, social trust is a powerful predictor of the trends of SWB. However, in the short run the relationship between social trust and SWB does not hold and GDP stands out as the only significant correlate of SWB.

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Appendix
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Footnotes
1
Easterlin and Angelescu (2009) and Easterlin et al. (2010) criticized these results arguing that they fail to distinguish between the long and the short run. In particular, Easterlin and colleagues showed that the positive and significant relation estimated by Stevenson and Wolfers (2008) and Sacks et al. (2010) is generated by the inclusion in the sample of countries with short time-series. Easterlin et al. (2010) documented that GDP matters for SWB in the short run, but that this correlation vanishes in the long-term. The tendency of SWB and GDP to vary together during contractions and expansions has been documented also by Di Tella et al. (2001) and Bartolini and Sarracino (2014).
 
2
See the pioneering studies by Helliwell (2001, 2006) and Helliwell and Putnam (2004), Bruni and Stanca (see also 2008) and Becchetti et al. (2008).
 
3
Opinions about social capital under communism differ. The “dictatorship theory of social capital” states that dictatorship destroys trust and cooperation among citizens (Fidrmuc and Gërxhani 2008; Paldam and Svendsen 2001). On the other hand, Paldam and Svendsen (2001) claims that an inefficient planned economy forced creation of “negative social capital”, i.e. informal networks (gray zones, corruption) that “fixed” the economic system and allowed its functioning despite inefficiencies.
 
5
In the WVS/EVS the distances between two consecutive waves are not regular, ranging from 1 to 8 years. It is therefore impossible to attribute the variations between contiguous surveys to the long, medium and short-term. Having data that are regularly surveyed in time is fundamental to define which time horizon is measured by such intervals.
 
7
This result is also confirmed for models with non standardized variables, see “Appendix 3”.
 
8
Dfbetas measure how much a given coefficient changes after excluding a specific country from the sample (Coxe et al. 2013, p. 49). In the medium run the influential countries are: Hungary, Slovakia and Ukraine (model for happiness) and Estonia and Poland (model for life satisfaction). In the short run the influential countries are: Estonia, Hungary and Ukraine (model for happiness) and Hungary and Bulgaria (model for life satisfaction).
 
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Metadata
Title
Money, Trust and Happiness in Transition Countries: Evidence from Time Series
Authors
Stefano Bartolini
Małgorzata Mikucka
Francesco Sarracino
Publication date
08-10-2015
Publisher
Springer Netherlands
Published in
Social Indicators Research / Issue 1/2017
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI
https://doi.org/10.1007/s11205-015-1130-3

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