Testing the Easterlin Paradox in the Framework of Resource Curse Hypothesis: A Case Study of the OPEC Countries

Document Type : Research Article

Authors

1 Ph.D. in Economics,, Department of Economics,, Faculty of Social Science,, Razi University, Kermanshah, Iran

2 Associate Professor, Department of Economics, Faculty of Social Science, Razi University, Kermanshah, Iran

Abstract

Achieving happiness has been always one of the goals pursued by human societies that has attracted the attention of many policy makers, thinkers and researchers. Meanwhile, the relationship between the oil revenues and happiness in the oil-exporting countries is an important subject that has rarely been noted. Therefore, the purpose of the present paper is to test the Easterlin paradox using resource curse hypothesis and to investigate the threshold effect of oil rent on happiness in OPEC countries in the period 2005-2016. For this purpose, the factors affecting happiness were modeled using dynamic threshold panel model. The estimation results have shown that the Easterlin paradox exists in OPEC countries. In other words, first, the increase in the ratio of oil revenues to GDP has improved happiness in oil-producing countries, and after exceeding the 43% threshold, increasing the ratio of oil revenues to GDP has reduced happiness in these countries.

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References

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Journal of Applied Economics Studies in Iran
Volume 10, Issue 38
June 2021
Pages 1-14

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