Abstract
This paper uses the nationally representative Albanian Living Standards Measurement
Study survey from 2005 to investigate the determinants of life satisfaction. In common
with much of the existing empirical literature that models life satisfaction (or subjective
well-being) this paper exploits an ordered probit model. In contrast to the existing
literature, however, the current study places an important emphasis on regression model
evaluation. Diagnostic testing revealed a number of econometric model deficiencies but
the explicit incorporation of a variance function into the ordered probit model resolved
all detected problems. The tenor of the key findings generally reflects that found in the
literature on the determinants of life satisfaction for both advanced capitalist and
transitional economies. However, a number of additional themes with a strong Albanian
dimension were interrogated. In particular, our study revealed evidence of long
memories among Albanian respondents with respect to the collapse of that country’s
notorious pyramid schemes and the scarring effects of the episode continue to impact on
life satisfaction even with the passage of almost eight years. A sizeable effect for
communal level criminal activity on life satisfaction was also detected. In addition, our
econometric estimates also provided some empirical insights on the monetary value of
friendship and the costs of children.
Lingua originale | English |
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pagine (da-a) | 731-741 |
Numero di pagine | 11 |
Rivista | JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION |
Volume | 2012 |
DOI | |
Stato di pubblicazione | Pubblicato - 2012 |
Pubblicato esternamente | Sì |
Keywords
- Albania
- Heteroschedasticity
- Ordered Probit