Happiness and Economic Development Targets in Thailand

ชื่อโครงการ :

Happiness and Economic Development Targets in Thailand

แหล่งทุน :

Internal project

ปีที่ดำเนินโครงการ :


รายละเอียด :

There are many targets in economic development, mainly: growth, stability, inequality, poverty reduction and alleviation, employment, and sustainability. The issue of the priority order of these targets is always controversial in society because each target is always achieved at the cost of other targets (there is always a trade-off among these targets). This paper proposes to use the Gross Domestic Happiness (GDH) as an ultimate target of economic development and treat the former economic development targets as intermediate targets, the composition of which should maximize GDH.

This research is a quantitative study aimed to develop the happiness index of Thailand focusing on macroeconomic variables as affecting factors of happiness. It gives information on the weight of different factors that affect people’s happiness, enabling us to answer how much effort we should put into each economic development target. The happiness equation was estimated by the method of Ordered Probit, employing cross-country data drawn from the World Values Survey of years 1999/2000.

For macroeconomic variables, the result shows that economic growth (real GDP growth) has a positive relationship with happiness, while inflation and unemployment have a negative relationship with happiness. In terms of their impact size on happiness, when all variables are considered as percentage change, inflation has the most impact on happiness followed by the unemployment rate and GDP growth respectively. Their relative impact size is 2.3, 2.1 and 1, respectively. This implies that to compensate for 1% increase of inflation, then 2.3% increase of GDP growth or 1.1% (=2.3/2.1) decrease of the unemployment rate is required in order to make people’s happiness unaffected.

For micro or personal variables, it was found that the female is happier than the male. Age has a U-shaped relationship with happiness, with the minimum vertex at the age of 51.8. Marital status, as ordered by the happiness level, is living together as married, married, single/never married, and divorced/widowed/separated/and others. Education and income level has a positive relationship with happiness with a concave function. The unemployed has lower happiness as compared with the employed, housewife, retired, or student.

Another finding is that, the happiest group of people tend to be more susceptible to the changes of affecting factors of happiness than the least happy group of people in both positive and negative direction.

The study result gives some policy recommendations toward economic development. For example, the government should put stronger relative focus on the target of maintaining price stability (low inflation) rather than economic growth, and use fiscal and monetary policy to maintain price stability. This applies to the situation where 1% decrease of inflation reduces economic growth by no more than 2.3%. Otherwise, the government should focus on the target of economic growth rather than maintaining price stability. Nevertheless, this recommendation is preliminary because in practice, fiscal and monetary policies do not affect only these two targets but also other targets, all of which should be taken into account.