Happiness and the Resource Curse

Sabna Ali,Elissaios Papyrakis,Syed Mansoob Murshed

doi:10.1007/s10902-019-00080-3

Sabna Ali, Elissaios Papyrakis + Show 1 more

Open Access

https://doi.org/10.1007/s10902-019-00080-3

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Abstract

There has been increasing interest in the so-called ‘resource curse’: the tendency of resource-rich countries to underperform in several socio-economic outcomes. More recently, several papers have looked beyond the traditional impact on economic growth and instead focused on the effects upon broader human welfare indicators. A separate empirical literature in recent decades has probed into the determinants of happiness and subjective well-being (using either country or household data). Our paper contributes to the literature by bringing these two empirical strands of research together. This is the first study, to our knowledge, that makes use of a large panel dataset to explore the links between changes in happiness across countries and several measures of resource wealth. Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time. This happiness ‘resource curse’ curse appears to be oil-specific and holds both for the levels as well as changes in happiness.

Highlights

In recent years there has been a burgeoning literature researching the links between resource abundance and several measures of economic performance
Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time
In parallel a separate empirical literature in recent decades has probed into the determinants of happiness and subjective well-being

Summary

Introduction

In recent years there has been a burgeoning literature researching the links between resource abundance and several measures of economic performance. Much of the so-called resource curse literature has developed theoretical and empirical research explaining the negative correlation observed between several measures of mineral wealth and long-term. Our paper contributes to the literature by bringing these two empirical streams of research together This is the first study, to our knowledge, that makes use of a large panel dataset to explore the links between changes in happiness across countries and several measures of resource wealth. Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time This happiness ‘resource curse’ curse appears to be oil-specific and holds both for the levels as well as changes in happiness.

A Theoretical Note on Happiness and the Resource Curse

Happiness and the Resource Curse: A Brief Literature Review

Happiness and Resource Wealth

Happiness and Income

Other Correlates

Data and Estimation

Results and Discussion

Resource Abundance

Non‐linear Resource Effects

Growth‐Income Interaction

Endogeneity Issues and Some Additional Robustness Checks

A Synthesis of Results