The pursuit of happiness: An empirical study of BLI of OECD countries

This paper explores the determinants of the scores of Better Life Index (BLI) of the OECD member countries. The fixed effects model is adopted, by employing the income and its distribution, and gender gap index (GGI), for the period of 2011 to 2015, to explain the variations of the BLI. The estimated results of all the three groups - 34 members of the OECD and the two subsets of the six transition economies (TR) and the 28 non-transition countries (NTR) - show that the estimated coefficients of all explanatory variables are significant at least in some models. A decrease in GGI (under par) and/or an increases in Gini coefficient could deteriorate BLI as expected; while the increase in GDP per capita (at PPP) and/or its quadratic form don´t have significant impact in transition economies. It may be associated with some sentimental feelings of relative changes in socioeconomic status generated by economic reforms. These findings indicate that the inequalities in gender and income distribution play a crucial role in affecting BLI in both transition and non-transition economies. Hence, policies to mitigate income and gender inequalities should be emphasized to improve wellbeing and pursue happiness for most of the OECD countries.