A Macroeconomic Analysis of the Relationship Between Happiness and GDP per Capita in Asia: Controlling for the COVID-19 Shock

During the twenty-first century, Asia has emerged as a region characterized by strong economic performance and sustained increases in GDP per capita. This study examines the relationship between happiness and GDP per capita from a macroeconomic perspective, controlling for the COVID-19 shock. Drawing on neoclassical theory and panel data for 37 Asian countries over the 2013–2023 period, fixed-effects and random-effects models are estimated after assessing the potential endogeneity of happiness. The results indicate that happiness is positively and statistically significantly associated with GDP per capita across Asian countries. In addition, Dumitrescu–Hurlin panel Granger causality tests indicate a unidirectional predictive relationship between GDP per capita and happiness, suggesting that higher levels of per capita income precede higher levels of reported happiness.