Religiosity and life satisfaction: evidence from the Russian data

Abstract

ABSTRACT Does religiosity make people happy? Many studies document positive associations between religiosity and various forms of subjective well-being. This holds true for general life satisfaction as well, both under normal economic conditions and in the case of economic shocks. However, both life satisfaction and religiosity may be correlated with unobserved individual and household traits or unobserved life shocks, which can relate to reverse causality. These facts result in endogeneity problems and make ordinary least square estimates biased. Endogeneity problems refer to situations in which an explanatory variable is correlated with the error term. They usually happen when an unobserved or omitted variable affects both independent and dependent variables. In this study, we employed two methods to avoid possible endogeneity issues: fixed effects and instrumental variable estimations. Using data from the Russian Longitudinal Monitoring Survey (RLMS-HSE) and different econometric models, we document positive associations between religiosity and life satisfaction. In particular, fixed effect and instrumental variable regressions provide evidence for a positive effect of religiosity.