Is there a relationship between a country's level of happiness and its per capita GDP?

Abstract

The main objective of this research project is to test the hypothesis of a relationship between a country’s level of happiness and its per capita GDP. The research is of great importance because if evidence of a relationship arises, the information could be used to develop activities or strategies which could potentially increase a country’s level of happiness by increasing its per capita GDP. The main findings are that there is evidence of a statistically significant relationship between a country’s level of happiness and its per capita GDP. Even though it might be a good result, it is not completely reliable and trustworthy because of our multicollinearity, a problem that could not be solved. A constant variances assumption’s violation was found by performing a variety of different tests. It was solved using robust standard deviations and it proved to add more statistical significance to one of the explanatory variables (Human Rights).