Abstract:

The study of subjective well-being, i.e. happiness, is very difficult due to its individual characteristic. However, it has recently gained momentum due to increasing data availability and the development of better measures. The present study contributes to this literature by analyzing the determinants of subjective well-being on the global scale, using a Panel Smooth Transition Regression (PSTR) model that enables us to identify possible threshold effects in the different objective dimensions of well-being. We identify several threshold variables for which well-being can be characterized by two extreme regimes. Our results are helpful in classifying any country based on a given dimension of well-being and, more importantly, for using this classification in developing and implementing the most appropriate governmental policies aimed at raising well-being.