Academy of Marketing Studies Journal (Print ISSN: 1095-6298; Online ISSN: 1528-2678)


Analyzing the Causal Relationship between Selected Macro-Economic Variables and Happiness Index: Empirical Evaluation from Indian Economy

Author(s): Gunjan Anand, Tarika Nandedkar and Amit Kumar

Happiness index represents the personal, social and national wellbeing of a country evaluated on the basis of non-economic parameters viz. health, education, freedom, cultural resilience, psychological wellbeing, governance, living standard etc. The current study covers another dimension by investigating the causal relationship of happiness index with selected economic variables. It includes- Happiness Index as ‘dependent variable’ and Unemployment Rate, GDP Per Capita, CPI and Government Consumption Expenditure as ‘independent variables’. Yearly data from 2010 to 2019 have been taken for the analysis. Augmented Dickey Fuller (ADF) of unit root test is applied on each time series data, Johansen Co-integration Test is used to check long run association of time series data and Granger Causality is used for estimating causal relationship among the variables. The findings reveal, GDP_PC and GCE Granger cause happiness index of the country, whereas CPI and UR doesn’t. All four variables show short run relationship with HI and proved to be crucial economic variables for predicting happiness index of the country.

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