A note on the impact of economic regulation on life satisfaction

Abstract

Are people happier if they experience freedom from regulations, and how do individual attitudes towards liberalization influence personal life satisfaction? Based on the data from European and World Values Surveys and the Economic Freedom of the World project, we find evidence for positive effects of low regulation and pro-market attitudes on life satisfaction. Paradoxically, people who are opposed to market-oriented policies sometimes benefit most from deregulation.

Keywords:

• regulation
• life satisfaction
• ideology
• attitudes

JEL Classification:

• I31
• L51
• H11

Acknowledgements

The authors are indebted to Sebastian Coll, Henrik Lindberg and participants at the 2nd World Meeting of the Public Choice Societies, Miami, April 2012, and the Research Seminar at Ratio Institute, Stockholm, August 2012, for helpful comments and suggestions on previous versions. Hans Pitlik thanks the Ratio Institute for kind hospitality during his stay as Visiting Scholar in Stockholm.

Notes

¹ Note, however, that the results do not change qualitatively in a robustness check with country fixed effects (instead of regional dummy variables and macro control variables). Results are available from the authors upon request.