A Microeconomic Analysis of Happiness and Life Satisfaction : A Statistical Study in Germany

The relationship between life satisfaction/happiness and economic factors is investigated with OLS regression analysis on Germany samples from ESS Round 2. Happiness does differ significantly from life satisfaction in regression equations, and life satisfaction can be explained better by controllable, non-psychological variables than happiness. Household income has a remarkable and significant influence on people's happiness, in contrast with many previous studies. Unemployed people actively seeking for jobs report lower life satisfaction than those inactively seeking for jobs, and some worth-noting but not very significant interaction effects between unemployed statuses and household income suggest that unemployed people, especially those inactively seeking for jobs, with certain amount of household income, may report higher life satisfaction than other people