Analysis of the Effect of Macroeconomic Variables on Happiness in Indonesia

Abstract

Happiness has become one of the indicators in measuring the level of success of economic development lately. Happiness as an indicator of development success is in line with the new schools of thought in economics, namely economics of happiness and economics of behavior. This happiness indicator is in line with the sustainable development goals driven by the United Nations agency. This study aims to analyze the effect of macroeconomic variables on happiness in Indonesia. The macroeconomic variables are gross regional domestic product per capita, poverty, provincial government expenditures for the education function and for the health function. Happiness data is obtained from the results of a survey of measuring the level of happiness conducted by the Central Statistics Agency which issues a happiness index in 33 provinces in Indonesia. The form of this research is descriptive-quantitative and sourced from secondary data obtained from the publications of the Central Statistics Agency, the Ministry of Education, the Ministry of Health and the National Development Planning Agency. Data analysis uses a panel data regression approach, with serial data in 2014 and 2017 for the number of observations in 33 provinces in Indonesia. The results of the research analysis show: (1) gross regional domestic product per capita has a positive and significant effect on happiness in Indonesia; (2) poverty has a negative and significant effect on happiness in Indonesia; (3) provincial government spending on education function has a positive and significant effect on happiness in Indonesia; (4) provincial government spending on health function has a positive and insignificant effect on happiness in Indonesia. Keywords: Gross Regional Domestic Product per Capita, Poverty, Education Function, .Health Function, Happiness.