Abstract
This paper evaluates the impacts of seven different components of consumption expenditures, saving patterns on subjective well-being in Turkey. It relies on the “Life in Transition Survey,” which was conducted in late 2010 jointly by the European Bank for Reconstruction and Development and the World Bank. The survey includes 1,003 observations from Turkey. Results show that, for the whole sample, different components of consumption expenditures have different effects on life satisfaction. Second, savings are associated with high levels of life satisfaction. Results vary when regressions run for age, gender and different standings on the income ladder categories independently.
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Notes
The terms “happiness,” “life satisfaction” and “subjective well-being” are used interchangeably throughout the paper.
In economics, a direct cardinal measure of utility (subjective welfare approach) originated at Leyden University in the Netherlands in the early 1970s (see Van Praag 1968).
The effect of using White’s correction is that, if the variance of the errors is positively related to the square of an explanatory variable, the standard errors for the slope coefficients are increased relative to the usual OLS standard errors, which would make hypothesis testing more conservative, so that more evidence would be required against the null hypothesis before it can be rejected.
The main reason to take the natural log of consumption is to reduce skewness, so that measures of central tendency such as the median and mean are closer.
According to WDH, between 2000 and 2009 the average happiness in Turkey was 5.6.
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Gokdemir, O. Consumption, savings and life satisfaction: the Turkish case. Int Rev Econ 62, 183–196 (2015). https://doi.org/10.1007/s12232-015-0227-y
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DOI: https://doi.org/10.1007/s12232-015-0227-y