Happiness, Markets, and Democracy: Latin America in Comparative Perspective

Abstract

The literature on subjective well-being highlights the role of relative income differences, an issue which is particularly salient for the emerging market countries. We explore the demographic determinants of happiness in 17 countries in Latin America, as well as the effects of macroeconomic trends and attitudes about the market on happiness. We provide comparative reference with data from Russia and the United States. We find that the determinants of happiness in Latin America are remarkably similar to those in the advanced industrial countries. We also find a marked and negatively skewed perceptions gap between individuals' objective economic situations and their subjective evaluations in both Latin America and Russia. That gap, in turn, has negative effects on happiness. Inflation and unemployment have negative effects on happiness in both contexts, while pro-market attitudes and preference for democracy have positive effects.