Well-Being and Economic Freedom : Evidence from the States

There is ample evidence that well-being, measured in various ways, is positively related to economic freedom across countries. Does this relationship hold at the sub-national level? Answering that question is the purpose of this study. Using regression analysis, we test whether economic freedom has an independent effect on well-being across states in the U.S. Our evidence indicates that, at the state-level, improvements in economic freedom lead to higher levels of well-being even after controlling for other economic factors. We also find that the relationship between well-being and economic freedom differs significantly across regions in the United States