The Easterlin Paradox Revisited: The Moderating Effect of Governance

Abstract

This study examines the moderating role of governance in the income-happiness relationship across 135 countries, utilizing data from the World Happiness Report, World Bank, and Worldwide Governance Indicators. Governance is categorized into basic functions (political stability and rule of law) and advanced functions (control of corruption, government effectiveness, regulatory quality, and freedom of expression). The analysis employs [specify analytical method, e.g., regression analysis or structural equation modeling] to assess these relationships. The results indicate that in non-high-income countries, basic governance amplifies the positive impact of income on happiness, whereas in high-income countries, advanced governance functions as a substitute for income in driving happiness. These findings underscore the importance of income-specific policy approaches to effectively enhance societal well-being.