The Determinants of Happiness in Indonesia

Abstract

This study aims to examine determinants of happiness in Indonesia. This research use cross-section IFLS data wave IV, 2007. The estimation models are Conditional Mixed Process (CMP) to address income endogeneity and Ordinal Generalized Linear Model (OGLM) to address heteroscedasticity. The result shows that the determinant of happiness in Indonesia are absolute income, relative income, education level, perceived health and some components of social capital such as willingness to help, tolerance, security, and importance of religion and religiosity in election. Moreover there is no impact of trust in same ethnic and religion people and trust in neighbors for crucial things into happiness. It indicates no discrimination over ethnic and religion in Indonesia. Demographic characteristics show that married, non-household head, urban area, non-Java-Bali islands, Islam and more religious people are happier than others. There is no difference in happiness over gender and ethnicity. Happiness-income relationship indicates Easterlin Paradox doesn’t exist in Indonesia.

DOI: 10.5901/mjss.2016.v7n2p393