Sustainable development and happiness

Abstract

This study reviews Easterlin Paradox by replacing sustainable development with economic growth for 27 developed and 25 developing countries during 2006-2018 with a dynamic panel model. The results indicate GDP per capita has a positive weak effect on life satisfaction in both developed and developing countries. Moreover, although the positive strong impact of sustainable development on life satisfaction is confirmed in developed countries, this hypothesis is rejected in developing countries. Finally, the hypothesis indicating an inverse U relationship between economic growth and sustainable development with life satisfaction is confirmed in developed countries; however, it is rejected in developing countries. Hence, in developing countries social and environmental dimensions of sustainable development along with improvement in democracy and corruption control should not be ignored to promote happiness. Moreover, in developed countries for avoiding a decrease in happiness, social, economic, political and environmental empowering-encouraging policies should be simultaneously pursued by policy makers.