Predictors of Well-Being in High Income, Industrialized Countries and Their Related Effects

Motivated by both: academic research illuminating the diminishing returns nature of the relationship between income and subjective well-being, and the recent development of composite indices as alternatives to GDP, this paper seeks to analyze empirically the relationship between a variety of macro-level indicators and subjective well-being. As there has been a paucity of research on this subject on just high-income countries, the paper looks at only those countries and finds that the effects of GDP do indeed diminish in comparison to low-income countries. Furthermore, the empirical analysis overall supports the thesis that as GDP rises, the values of countries shift from personal survival and economic opportunity towards larger government, less working hours, and more emphasis on trust in institutions and people.