Influence of GDP per capita on the average life satisfaction score

Running Header: Influence of GDP per capita on the average life satisfaction
score 1
Influence of GDP per capita on the average life satisfaction score
Student’s name:
Course:
Professor:
Institution:
Date:

Influence of GDP per capita on the average life satisfaction score 2
Purpose
The following study aims to examine the association between average life satisfaction and
GDP per capita. Data obtained focused on 35 countries as seen in the appendix.
Background
The life satisfaction score is used in measuring the subjective well-being or happiness of the
people within a country (Binder & Coad, 2013). The subjective well-being or happiness
encompasses positive feelings and experiences or the absence of negative feelings and
experiences. Life satisfaction measures how people evaluate their life wholly rather than their
current feelings. The life satisfaction score is on a scale from 0 to 10.
Many established economists have been entangled in the knot which aims to determine
whether an increase in the rate of economic growth leads to a happy nation (Glaesmer et al.,
2011). Most developed economies have highly successfully increased their economic output.
However, whether the notable increase in the national output has improved the standards of
living of the people is still in question. The decision on whether economic growth increases
happiness is a choice to be made on a personal basis and it is difficult to come up with a
concrete argument. Growth has a positive impact on the economy but the side-effects which
influence the overall happiness within an economy varies (Proto & Rustichini, 2013).
There are several benefits of economic growth which include increased consumption, and
more benefits for consumers due to more goods and services. Economically, consumption is
related to the utility where, as more goods are being consumed, there is a higher utility which
leads to grander prosperity (Costanza et al., 2014). In addition, economic growth is typically
related to improved public services. Enhanced health care improves the quality of life through
increased life expectancy. An increased standard of education gives the population a greater

Influence of GDP per capita on the average life satisfaction score 3
diversity of literacy and skills. Hence, there will be more happiness within the economies. A
reduction in unemployment and poverty results from economic growth through the creation
of jobs. Reduced unemployment and poverty is significant since unemployment is a key
cause of social misfits which include alienation and crime, a huge hindrance to the overall
happiness of the people.
Method
The data used in the study is secondary in nature since it was obtained from online sources.
The data were obtained from the OECD website. OECD is an international organization that
aims to build better policies for better lives.
Once the data was obtained and cleaned, the relevant statistical analysis was done. The first
statistical test was obtaining the descriptive analysis of the two variables using the excel
inbuilt function Data Analysis. A scatter diagram was obtained to determine the relationship
between the two variables. The final empirical test carried out was the regression analysis to
determine the relationship between the average life satisfaction score and the GDP per capita.
The regression analysis used was a simple linear regression since it encompasses only two
variables.
Results
Descriptive Statistics
Table 1: Descriptive statistics
Average life satisfaction Annual GDP per capita
Mean 6.59 $39,012
Standard Deviation 0.75 $14,006
Minimum 5.20 $17,123
Maximum 7.50 $86,788