Summary of findings

The main estimates are summarized in three tables. The first one analyses explained individual level variance and country level variance that can be explained by compositional effects. The second table documents how much of the country level variance is explained by adding five continuous country variables and a country classification. If the results were to be published, the main results in these two tables could be presented in a single table. The third table presents the estimates of the fixed (regression coefficients) and random parameters (variance components) for two selected models. With the exception of the column with the variable names, the table could be published as it is.

Together, the three groups of variables - demographic, socioeconomic and social support indicators - explain about 13 per cent of the individual level (within-country) variation in reported happiness scores. The socioeconomic variables, especially ‘coping well on present income’, appear to be the most important ones in relation to individual differences in happiness. About half of the between-country variation in happiness scores is explained by the individual level explanatory variables. This can be interpreted as a compositional effect. Again, the socioeconomic variables are the most important ones, and especially coping on present income.

The second table shows that the gender empowerment measure works best in terms of further explaining the between-country variation in happiness. With this variable added to the full individual level model, around 80 per cent of the between-country variation is explained. Since the country characteristics are rather strongly correlated, only one of them can be added at a time. This also means that, on average, countries that are strong in relation to gender empowerment are also rich, have long life expectancy and low income inequality.

Table 5.6a. Variance components for model with individual level explanatory variables
Null model + Demographic variables + Socioeconomic variables + Social support variables
Individual level variance 3.772 3.701 3.398 3.268
Between-country variance 0.586 0.578 0.345 0.292
Explained individual level variance 0.000 0.019 0.099 0.133
Explained country level variance 0.000 0.013 0.410 0.502

Table 5.7. Explaining the country level variation in hapiness scores
Null Full inda GDP Gini Lifeb Hdi Empowc Welstated
Remaining country level variance 0.586 0.292 0.131 0.166 0.128 0.109 0.103 0.131
Explained country level variance 0.000 0.502 0.777 0.717 0.782 0.814 0.824 0.776
a. Full ind = Full individual level model b. Life = Life expectancy at birth c. Empow = Gender empowerment measure d Welstate = The welfare state classification

Table 5.8. The final model and the model with the welfare state classification
Variable names Estimates of fixed parameters B S.e. t Sig.
Intercept 2.704 0.380 7.123 0.000
Agec Age in years, centred -0.011 0.000 -22.008 0.000
agec2 Age centred squared 0.001 0.000 23.588 0.000
Female Female gender 0.159 0.017 9.433 0.000
Primary education (reference category) 0.000
seced Secondary education 0.126 0.022 5.595 0.000
Terted Tertiary education 0.219 0.024 9.137 0.000
Low household income (reference category) 0.000
Missinc Missing household income 0.287 0.026 11.134 0.000
Medinc Medium household income 0.229 0.024 9.608 0.000
Highinc High household income 0.420 0.027 15.692 0.000
Copeinc Coping on present income 0.920 0.021 43.853 0.000
Cohab Living with a partner 0.713 0.020 36.504 0.000
Social Meeting often socially 0.496 0.018 27.141 0.000
c_gem_2009 Gender empowerment measure 3.423 0.511 6.697 0.000
Estimates of random parameters
Residual variance, individual level 3.268
Residual variance, country level 0.103
Estimates of fixed parameters
(estimates for age to social omitted)
Welstate = 1 Nordic 1.065 0.216 4.928 0.000
Welstate = 2 Liberal 0.530 0.282 1.879 0.072
Welstate = 3 Continental 0.755 0.200 3.777 0.001
Welstate = 4 Southern 0.498 0.216 2.309 0.029
Welstate = 5 Eastern (reference category) 0.000
Estimates of random parameters
Residual variance, individual level 3.268
Residual variance, country level 0.131

The model in which the gender empowerment measure is replaced by the welfare state classification seems to be inferior to the final model with three more fixed parameters. They show that the Eastern countries fare worst and have the lowest level of happiness after controlling for all individual level explanatory variables. The Southern and Liberal welfare regime countries score about half a point higher (on a scale from 0 to 10) than the Eastern regime. In the Nordic regime, the average score is about one point higher than in Eastern Europe.

Finally, some comments on the individual level explanatory variables. Age is the most difficult to interpret since its effects are represented by two variables: age centred and age centred squared. The linear coefficient t is negative and the coefficient for the square term is positive. This indicates that young people are most happy and that the level of happiness decreases until about the age of 53.5 years, when the bottom is reached, before again increasing. The high point is about 5.96 for persons in the reference categories for all dummy variables and in countries with an average level of gender empowerment. The low point is about 5.12, a maximum difference of about 0.84 points. The graph describes the relationship between happiness and age, controlling for all other variables:

Figure 5.1. Relationship between happiness and age controlling for all other variables

Women report being slightly happier than men. The expected gradients in happiness by education and income are observed, the steepest one for income. Note that education could well have indirect effects on happiness through the remaining variables in the table, where only the direct effects are reported. The subjective measure of whether one is coping (well) on present household income has a rather strong effect, even when controlling for income. Those who are coping well report about one point higher happiness than those who have difficulties coping on their present income. Finally, both living together with a partner and meeting often socially with friends is positively related to reporting happiness.

Final words

The analysis of happiness in Europe rests on an important and perhaps unrealistic assumption that all individual level explanatory variables are similarly related to happiness in all countries. There are at least two ways of testing this implicit assumption: firstly, by testing whether one or more of the explanatory variables can be defined as random and, secondly, by estimating one-level models for groups of countries. I leave it as an open exercise to examine this assumption.

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