What drives happiness in 15 European Union countries? The role of income inequality, democracy, and environmental quality

This study examines happiness as a key dimension of sustainable development by focusing on its socio-economic, political, and environmental correlates. In recent years, it has become increasingly accepted that happiness cannot be explained solely by economic prosperity but is strongly influenced by structural factors such as income distribution, democratic institutions, and environmental conditions. Despite growing interest, empirical studies examining the simultaneous effects of these three fundamental factors on happiness are scarce. This creates a noteworthy gap in the literature. This study aims to fill this gap by empirically examining the effects of income inequality, democracy, and environmental degradation on happiness in 15 European Union countries, including the United Kingdom for comparability, between 2011 and 2022. Per capita income and health expenditure are included as control variables. Methodologically, the study employs MMQR and assesses the robustness of the findings using FGLS, PCSE, and HPJ approaches. The findings suggest that income inequality and environmental degradation are negatively associated with happiness, whereas democracy is positively associated with individuals' happiness. Furthermore, it is found that per capita income and health expenditure are found to be positively related to happiness. The results point to the need for sustainable development goals to be addressed within a holistic framework rather than independently, offering important implications for policymakers.