Dissecting happiness: modeling economic determinants of subjective well-being in Europe and Central Asia

Vera Karadjova; Snezhana Dichevska; Aleksandar Trajkov; Sasho Korunovski; Katerina Angelevska-Najdeska

doi:10.71159/icemit2505K

Authors

Vera Karadjova University St. Kliment Ohridski Bitola, Faculty of Tourism and Hospitality Ohrid, N. Macedonia
Snezhana Dichevska University St. Kliment Ohridski Bitola, Faculty of Tourism and Hospitality Ohrid, N. Macedonia
Aleksandar Trajkov University St. Kliment Ohridski Bitola, Faculty of Tourism and Hospitality Ohrid, N. Macedonia
Sasho Korunovski University St. Kliment Ohridski Bitola, Faculty of Tourism and Hospitality Ohrid, N. Macedonia
Katerina Angelevska-Najdeska University St. Kliment Ohridski Bitola, Faculty of Tourism and Hospitality Ohrid, N. Macedonia

DOI:

https://doi.org/10.71159/icemit2505K

Keywords:

Happiness, Subjective Well-Being, Economic Determinants, Europe and Central Asia, Regression Analysis

Abstract

This study investigates the economic determinants of subjective well-being across 49 countries in Europe and Central Asia. Using the Ladder score as a measure of life satisfaction, a multiple linear regression model was applied to assess the impact of key socioeconomic variables, including GDP per capita, unemployment, inflation, urbanization, income inequality (Gini coefficient), life expectancy, health expenditure per capita, and homeownership rates. The results reveal significant negative effects of unemployment and inflation on subjective well-being, while life expectancy and health expenditure per capita positively influence happiness levels. Urbanization and income inequality showed weaker or insignificant effects. These findings underscore the critical role of economic stability and public health investments in enhancing life satisfaction. This research provides a comprehensive, region-specific empirical assessment and valuable insights for policymakers aiming to improve citizens’ quality of life through targeted economic and social policies.

References

Asterlin, R. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David & M. W. Reder (Eds.), Nations and households in economic growth: Essays in honor of Moses Abramovitz (pp. 89–125). Academic Press.

Eurostat. (2025, July 24). Distribution of population by tenure status, type of household and income group (ilc_lvho02). https://doi.org/10.2908/ILC_LVHO02

Eurostat. (2025, July 24). Gini coefficient of equivalised disposable income by age. https://doi.org/10.2908/ILC_DI12

Grieshaber, K., & Manenkov, K. (2025, March 21). Finland is again ranked the happiest country in the world. The US falls to its lowest-ever position. Associated Press. https://apnews.com/article/world-happiness-report-ranking-finland-afghanistan-us-b41c1712448762d98fe9e4f80233c15f

Karadjova, V. (2019). Standard of living, quality of life and happiness score as indicators of economic development. In Z. Nikitović, S. Vujičić, & I. Piljan (Eds.), Employment, education and entrepreneurship – Thematic proceedings: Eighth International Scientific Conference (EEE 2019) (pp. 27–36). Faculty of Business Economics and Entrepreneurship. https://eee-conference.com/wp-content/uploads/2022/12/e2019_sa_naslovnom.pdf

Karadjova, V., & Dicevska, S. (2018). Living standards and microinsurance. In D. Cogoljević, I. Piljan, & A. Salamzadeh (Eds.), Finance and insurance sector industry (EEE 2018) (pp. 29–52). Silver and Smith Publishers. http://www.eee-conference.com/_img/arhiva/2018/knjiga_finansije_i_osiguranje_prelom_final.pdf

Karadjova, V., & Simonceska, L. (2005). Dealing with inflation and unemployment as the most significant macroeconomic problems – A precondition for integration (aspects of the Macedonian economy). In Međunarodni naučni skup “Procesi integracije u Evropi”. https://eprints.uklo.edu.mk/id/eprint/5312/

Karadjova, V., & Spaseska, T. (2025). Assessing the impact of negative balances in current accounts and inflation on the minimum consumer basket: A regression approach. In C. P. Ohrid (Ed.), INSCOSES 2024 (pp. 367–392). CNIR, FTU Ohrid. https://doi.org/10.5281/zenodo.14987801

Karadjova, V., & Trajkov, A. (2022). Basic economic indicators and economic well-being. Horizons – International Scientific Journal, 31(2), 165–181. https://doi.org/10.20544/HORIZONS.A.31.2.22.P13

Statista. (2024, September 5). Homeownership rate in selected European countries in 2023, by country. https://www.statista.com/statistics/246355/home-ownership-rate-in-europe/

UNU-WIDER. (2025, April 28). World Income Inequality Database (WIID) companion dataset (wiidcountry and/or wiidglobal), 30 June 2022. https://doi.org/10.35188/UNU-WIDER/WIIDcomp-300622

World Bank. (2025, January 7). Current health expenditure per capita (current US$) (SH.XPD.CHEX.PC.CD). World Development Indicators. https://databank.worldbank.org/reports.aspx?source=2

World Bank. (2025, January 7). Life expectancy at birth, total (years) (SP.DYN.LE00.IN). World Development Indicators. https://databank.worldbank.org/reports.aspx?source=2

World Bank. (2025, July 1). Gini index (world_bank_gini_income). World Development Indicators. https://databank.worldbank.org/world_bank_gini_income/id/96dff567

World Bank Group. (2025, July 7). World Development Indicators. https://databank.worldbank.org/reports.aspx?source=2