Working paper

The Effect of Geopolitical Region and Development Level on the Relationship Between Economic Freedom and Happiness



Published in:

Munich Personal RePEc Archive


economic freedom
geopolitical regions
Western Europe

This study explores the nuanced relationship between economic freedom and happiness, investigating the influence of geopolitical regions and developmental stages on this association. Utilizing cross-sectional secondary data from 135 countries in 2021, this research employs a regression analysis incorporating economic freedom as the independent variable and happiness as the dependent variable. The model further includes interactions between economic freedom and both the geopolitical region and level of development. Initial findings affirm a positive correlation between economic freedom and happiness across countries. However, when considering interactions, distinct patterns emerge. Contrary to expectations, the impact of economic freedom on happiness does not significantly differ among countries at varying development stages. Conversely, geopolitical context emerges as a critical factor, notably highlighting the significance of economic freedom in fostering happiness within Western Europe compared to other regions.