The happiness of vietnamese, micro analysis of happiness determinants in the case of binh dinh province

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUES VIETNAM THE NETHERLANDS VIETNAM – NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE HAPPINESS OF VIETNAMESE: MICRO-ANALYSIS OF HAPPINESS DETERMINANTS IN THE CASE OF BINH DINH PROVINCE A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By HO DAI NGHIA Academic Supervisor: Dr TRAN ANH TUAN HO CHI MINH CITY, AUGUST 2013 i Acknowledgements During the time of studying in Vietnam – Netherlands programme for Master of Arts in Developing Economics, I have learned so much helpful knowledge Therefore, I would like to thank to Programme and all the teachers that have taught me in this time I would like to express the deepest appreciation to my research supervisors, Dr Anh Tuan, for his patient guidance, industrious encouragement and fruitful critiques of this research work Besides my supervisor, I want to acknowledge the tremendous support that I received from Dr Pham Khanh Nam and Prof Dr Nguyen Trong Hoai for giving me constructive comments and warm encouragement I would like to offer my special thanks to many friends at People's Committee of Binh Dinh for your assistance and helpful advice with the eye glance data reduction process Without your guidance and persistent help this thesis would not have been possible I am particularly grateful for the assistance given by the officer of my university’s library for his help in offering me the resources in researching and performing the program Lastly, the most special thanks go to my best partner and friend, my father, for his help in collecting the data analysis and other helpful things My gratitude also goes to my mother She gave me your unconditional support through all this long process ii Abstract Although economic growth is higher in many countries, these nations still have no increase or even suffering a depression in average national happiness This study has carefully examined the determinants of happiness or subject wellbeing from literature These determinants are divided into three main categories: economic determinants, personal and demographic determinants and, finally, social determinants In addition to, some recent evidence reveal that happiness also has the adverse significant effect on these factors and economic growth only has restricted effects on happiness level of particular nations In specific case, based on 300 observations and ONS approach, this research paper desires to estimate the magnitude of determinants of happiness in Binh Dinh province at individual level The results reveal that the mental, physical health, local facilities satisfaction and household income have strong effects on individual’s happiness level with high statistical significance Furthermore, the size of coefficients other several variables, including being a female, having partner, high qualification, owned-house status, being employed or living in city is small and ambiguous It means that they have weak relationships with the happiness level Specifically, two variables of age and be employed, have opposed sign as literature Keywords: Subject well-being, Happiness, Economic Growth, Life Satisfaction, Determinants, Binh Dinh Province iii Table of Contents Acknowledgements ii Abstract iii List of Tables vi List of Figures vii Abbreviations viii Introduction Chapter One: Literature Review 1.1 Happiness notation 1.1.1 Well-being concept 1.1.2 Object and subject well-being 1.1.3 Three dimensions theory 1.1.4 Conceptual framework 10 1.2 Determinants of Happiness 11 1.2.1 Happiness and Income 11 1.2.2 Happiness and Unemployment 19 1.2.3 Happiness and Inequality 23 1.2.4 Happiness and Demographic Determinants 24 1.2.5 Happiness and Social Determinants 31 Chapter two: Socio-economic Overview of Binh Dinh province ….33 2.1 Overview of Economics factors 33 2.2 Contribution to happiness at glance .34 2.3 Some remained obstructions 37 Chapter Three: Methodology and Data 39 3.1 Data 42 3.1.1 Data description 42 3.1.2 The questionnaire design- ONS approach 42 3.2 Methodology 46 iv 3.2.1 Model specification 46 3.2.2 The research detail function 44 3.2.3 Hypothesis statement 49 3.2.4 The description of variables use in this research 49 Chapter 4: Analysis result 53 4.1 The empirical analysis 53 4.1.1 Multicolinearity test 53 4.1.2 Heteroscedasticity test 53 4.2 Analysis result 53 4.3 Analysis examination 55 4.3 Demographics determinants 55 4.2.2 Education and health determinants 56 4.2.3 Economic and work determinants 58 4.2.4 Social life and community relationships determinants 59 Chapter 5: Conclusion and ruture research directions 62 5.1 Conclusion and Recommendation 62 5.2 Limitation and future research directions 65 APPENDICE 53 Reference 73 v List of Tables Table 1-The description of variables use in the thesis Table - Literature findings on determinants affecting happiness level Table 3- Breusch-Pagan-Godfrey test result Table 4- WLS and OLS analysis result Table 5- Coefficients sign comparison vi List of Figures Figure 1- Three dimensions of well-being Figure 2- Conceptual framework Figure 3- GDP per capita and happiness across regions Figure 4- Happiness and Income in USA Figure 5- Happiness and Income in Japan Figure 6- Happiness and Income per Capita across Countries Figure 7- Labor market status and Average subjective well-being ratings Figure 8- Unemployment status and Average subjective well-being ratings Figure 9- Marriage status and Average life satisfaction ratings Figure 10- Average life satisfaction ratings of the number of children between different gender respondents Figure 11- Average Happiness and Age through a life cycle Figure 12- Gender and Average subjective well-being ratings vii Abbreviations APS: Annual Population Survey ATUS: Annual Time-Use Survey BHPS: British Household Panel Survey BSPS: British Society for the Philosophy of Science DEFRA: Department for Environment, Food and Rural Affairs DHS: Dutch Household Survey ECHP: European Community Household Panel EMA: Ecological Momentary Assessment ESM: Experience Sampling Method ESS: European Social Survey ERD: Responsible Development Environment FSU: Former Soviet Union GDP: Gross Domestic Product GNH: General National Happiness GNP: Gross National Product GSS: General Social Survey HIV/AIDS: Human Immunodeficiency Virus/ Acquired Immune Deficiency Syndrome Hukou: Household Registration Identity IHS: Institute of Human Studies NEF: New Economic Foundation NEW: Net Economic Benefits viii ONS: Office for National Statistics PANAS: Positive and Negative Affect Scale UK: United Kingdom SWB: Subject well-being WVS: World Values Survey WEF World Economic Forum ix Introduction In recent years, a European debt crisis as well as the global economic crisis has set for us the question: Whether the targets which countries following are appropriate? And was it time the world needs a new goal? The world economy has long been using the concept of Gross Domestic Product (GDP) is the standard to evaluate the prosperity of a country This standard often does not include the costs to achieve progress society and the environment While the rest of the world is playing with the global recession storm, there is a small Buddhist nation that situate on the top of steep Himalayan snow for thousand years and that has boldly claimed to have found the solution for the question the true happiness in where and the objective a nation should pursue? Bhutan Government initiates to uses the standard "General National Happiness" (GNH) with GDP as the standard to evaluate the prosperity of each country The nations of the world should probably learn to imitate wings of Bhutan to evaluate the effectiveness of the policy agenda on the basis that it brings happiness to the people rather than the economic growth figures for insensitivity Gross National Happiness value (Gross National Happiness - GNH) was born from the ideas of former King of Bhutan, Sir Wangchuck (Alejandro, 2009), is applied from the 1970s to replace the concept of Gross national product (GNP) He did not hesitate to say "no" before the globalization efforts of the West with his famous phrase: "The total national happiness (GNH) is more important than gross national product (GDP)" As a small country in the Himalayas with about 708,427 people and is one of the poorest countries However, based on GNH, Bhutan's GNH probably is the top in the world Kinley Dorji (1972), secretary of contact information for Bhutan: "Just look at the indicators of economic growth will lead to where they know," he said, referring to the economic downturn worldwide "The previous empirical evidence is conflicting on the relationship between education and well-being, the new finding has concluded that having degree qualification was proved to have a slight negative impact on the happiness level The findings for sex, unemployment, house owning or domestic violence are familiar to literature though they are statistically insignificant This contrary should be carefully examined in further studies to make clear the relationship between happiness and these factors The overall well-being of the population might be cautiously inspected by policymakers when applying alternatives to improve residents’ standard living The case of Binh Dinh province has given out some important aspects on how to improve the happiness level and also made recommendations At first, people who are living in rural may get fewer benefits than living in other locations Therefore, policy-makers should improve living conditions in rural location rather than just extend it Secondly, mental, physical health and local facilities have robust effects to the individual happiness level Hence, governors should contribute much more their budget to public health services in order to take care of its people Although local facilities are prominent, it still keeps improving The provincial health department must put interest in direct support of the management and technical expertise to lower lines in its system, as well as increasing investment resources for the key problems, especially grassroots health Raising awareness and changing working methods, improving the quality of operations, planning, and implementation steps are effective The work of the organizational structure, assignment, arrangement of human resources is stable and has complete payroll employment; staff in the department have increased in number and practical skill levels; health network economy gradually strengthened and improved; basic construction of new projects and equipment to be enhanced and supplement industry to be developed Disease prevention is actively implemented, and health care quality is significantly improved, especially in the application of high 63 technology in the health treatment Health department also is often enhanced in terms of the professional capabilities and ethical physician; supervision and technical assistance to grassroots is strengthened Health networks in ethnic minority and mountainous locations are increasingly consolidated and developed, then, to enhance the ability of control and repel disease Many techniques, new treatment regimens shield development, the supply of drugs and medical equipment are improved than before People ling in the mountainous and remote locations get better health care Thirdly, the main source of one’s happiness is their income Thus, improving proposal income can make people happier However, the provincial present economy is suffering many troubles For one thing, the price index and inflation close to double higher than the economic growth index is a challenge in implementing the Government's task In particular, the production will be difficult For another thing, business difficulties will affect the objectives of growth, employment, income of workers There are many solutions introduced in provincial economic policies to improve residents’ income Firstly, people should focus on promoting industrial production of agriculture It is necessary to develop a reasonable plan for agricultural production, and natural disaster prevention in order to achieve the highest efficiency This can be done by speeding up the restructuring of agriculture and the rural economy in the direction of agricultural commodity production quality and efficiency in order to achieve the growth target output value in accordance with plan Secondly, policy makers should develop the service industry in air transport, such as opening a number of domestic and international routes to increase revenue, or applying the promotional measures such as reduced fares to attract customers It is also essential to have a good development and management of the real estate market, especially in the sales or transfer of houses and land Also, there should be 64 more continued research to reduce telecommunications charges in accordance with the world's economic integration roadmap and the region Finally, there must be some policies to reduce production costs, improve business efficiency and competitiveness of the product For instance, in manufacturing and agriculture, reduction in production cost depends heavily on prices of raw materials imported as food processing and beverages, textiles, clothing, footwear, steel and metal products ferrous, machinery and mechanical appliances, electrical products, basic chemicals, fertilizers, tires, cars, motorcycles, paper, electronics, plastic products by encouraging the use of domestic raw material for production to replace imported materials, and improving the organization methods and management of production, division of production cooperation and specialization should reasonably take advantage of depth advantages and production capacity of the business, to save raw materials, apply technology advance to reduce production costs and improve product competitiveness 5.2 Limitation and future research directions The present study has certain limitations that need to be taken into account when considering the study and its contributions It is considerable to critically evaluate the results and the whole study However, some of these limitations mentioned in the study might give us a clue for future researches under the same context Firstly, knowledge scale may be the most obvious limitation of the study It has focused on a social phenomenon that is very spacious and difficult to handle - the measure of happiness level Obviously, this is a challenging task for researching an extensive and complex problem with a narrow empirical back-ground The case study straightforward brings forth many limitations as long as it could be apprehended precisely Because of this limitation, it is hard to present the concepts, ideas and approaches in the most reasonable ways, then; it is fairly complex for readers to follow However, by understanding something about this 65 particular case, it also provides a conceptual framework as well as efficient tools for further study Another limitation of this study is the awareness of the concepts of sociology and psychology The research, thought, has carefully represented many logical perspectives as well as the theoretical analysis along with it The study is still difficult to follow ideas presented Thus, instead of trying to exhibit all ideas in details, the research focused on introducing previous study findings in the most general perspective This is more convenient for examining our problems; however, it can also be seen as a limitation because it could lead to some misunderstandings In the next, criticism may also make a doubt on way the number of variables applied in this study The suspicion in literature has received many robust arguments as well as explanations In the case of the research, it decides not to employ all variables researched from literature, and therefore it just simplifies the reality as well as introduces a framework for further research in this field Moreover, the theoretical base of this study can be included such a wide variety of different perspectives on some variables, then cause an ambiguous, complex and contrast idea as being brought into the research as well as to avoiding a theoretical conflicts The use of different variables was based on the knowledge conducted during the development of this field Then, in this specific situation, I have come to the conclusion that it is worthwhile to not put all of them into the research It is important to clarify carefully the meanings of these perspectives and how they relate to each other before combining them In other words to understand the important and relations of these variables it is put into the model with regard to both literature and reality Based on the conclusions as well as the limitations of this study, many issues could be involved in future research The most important and obvious problem underlying is widening of the study scale, not just one province The next issue 66 need be identified is the interconnection, interplay between the determinants and the model in order to have the most precise perspective on these factors As discussed in the earlier part of this study, various additional perspectives must be involved to enrich the framework on this research However, it would be arduous and complicated to combine the perspectives of all these factors into this research as a background material Therefore, some concepts such as subject wellbeing, object well- being, happiness…should be investigated in other separate papers The replication of the study at different regions in Vietnam would ensure a better outcome of the study Meanwhile, extending as well as improving data collection method also help researchers could extract better responses for promoting outcomes In this research, the sample collected is only a very small proportion of the entire population in the province Therefore, widening the scope of the samples and variables in the model is still an important task in future research It must be so exciting to investigate this subject more widely in other types of areas and methods than just following the old path There is no doubt that this paper has been developed in a specific aspect and requires more modifications in future researches In addition, the observed relationships may be biased in the research by using common method of measuring happiness level or response variance effect Moreover, the interviewees’ awareness in this research can be various in some aspects so the collected data seem to be not objective Therefore, this is an inevitable criticism that how effective the study when measuring these cognition behavior However, the study purpose is perception self-valuated regardless to objective or subject data 67 More of qualitative methodology of data collection should be undertaken in future to provide wider perspective to the present study because of limitation of qualitative methodology used in the research The last issue should be concerned about the cause-effect relationships between happiness and other variables It is obvious to have robust effects of presented variables to happiness From many researches such as C Graham, A Eggers and S Sukhtankar (2004) has confirmed that cause-effect using Russian panel This study concludes that people who were happier made more money and were in better health in a survey years later Then, providing evidence that income improves happiness significantly, happier people afterward are found to have a lower marginal propensity to consume and they tend to save more, spend less than before Then, happier people take more time to make decisions and have more control over expenditures, so people can invest and earn higher income in the future As a result, happiness itself affects health, positive cognitive bias such as control, selfesteem, optimism and other factors For further research, this relationship should be involved in advantage In conclusion, the findings in this happiness sector should bring policy-makers resourceful information for designing polices for social development of Binh Dinh province 68 APPENDICE Appendix 1: Graphs and tables The correlation matrix between variables Correlation t-Statistic AGE AGE - AREA LOCATION -0.12732 -2.215915 B_A CHILD CRIME EMPLOYED HOME INCOME LOCAL LOG(INCOME) MARRIED MENTAL 0.087976 1.524619 0.087473 1.515827 - CHILD 0.193278 3.400622 -0.005069 -0.087499 0.065676 1.136195 - CRIME 0.141647 2.470107 -0.118074 -2.052632 -0.098683 -1.711891 0.006298 0.108729 - EMPLOYED -0.003471 -0.059914 0.009239 0.159497 0.22375 3.963005 0.089365 1.548871 -0.0823 -1.425548 - HOME 0.177286 3.10969 0.118756 2.064655 0.188512 3.313626 0.132367 2.3053 -0.058909 -1.018703 0.243409 4.332178 - INCOME -0.157783 -2.758299 0.144719 2.524823 0.401874 7.576116 0.025635 0.442674 -0.226415 -4.012742 0.367925 6.830494 0.372066 6.919633 - LOCAL -0.318332 -5.796807 0.09924 1.721652 0.21062 3.719291 -0.033198 -0.573395 -0.286928 -5.170547 0.24537 4.369319 0.202227 3.564635 0.649908 14.7618 - LOG(INCOME) -0.142874 -2.491947 0.077975 1.350175 0.414202 7.855798 0.057361 0.991833 -0.221077 -3.913208 0.379901 7.089647 0.362272 6.709554 0.949527 52.25409 0.64595 14.60718 - MARRIED 0.298281 5.394699 0.015413 0.266096 0.218555 3.86632 0.171511 3.005275 -0.007508 -0.129619 0.227703 4.036808 0.403204 7.606062 0.258948 4.627994 0.120711 2.099147 0.268262 4.807112 - MENTAL -0.398542 -7.50139 0.126053 2.193509 0.291275 5.256098 -0.115205 -2.002077 -0.283749 -5.108215 0.26026 4.653138 0.209922 3.706405 0.718199 17.8174 0.725732 18.21 0.702849 17.05664 0.077239 1.337344 - PHYSICAL -0.373495 -6.950513 0.195891 3.448417 0.270709 4.854427 -0.117341 -0.254283 -2.039711 -4.53879 0.247185 4.403724 0.232793 4.13216 0.606474 13.1673 0.657872 15.07926 0.579205 12.2655 0.072759 1.259349 0.744107 19.22771 0.060692 1.049633 0.078377 1.357165 0.025446 0.439409 -0.038352 -0.662553 9.77E-05 0.001687 0.115062 1.999561 -0.03808 -0.657845 0.100461 1.74304 SEX - B_A SEX PHYSICAL 0.049238 0.851015 0.079025 1.368457 0.025974 0.448533 -0.04174 -0.721176 Breusch-Pagan-Godfrey test Heteroskedasticity Test: Breusch-Pagan-Godfrey F-statistic 3.403806 Prob F(14,285) 0.0000 Obs*R-squared 42.97563 Prob Chi-Square(14) 0.0001 Scaled explained SS 38.74766 Prob Chi-Square(14) 0.0004 Test Equation: Dependent Variable: RESID^2 69 0.006044 0.104339 - Method: Least Squares Date: 03/26/09 Time: 00:41 Sample: 300 Included observations: 300 Variable Coefficient Std Error t-Statistic Prob C 1.128290 0.433620 2.602026 0.0098 AGE -0.026402 0.015413 -1.713019 0.0878 AGE2 0.000416 0.000187 2.220465 0.0272 LOCATION -0.007575 0.042709 -0.177370 0.8593 B_A -0.025901 0.046756 -0.553955 0.5800 CHILD 0.019760 0.042591 0.463951 0.6430 CRIME 0.010370 0.051389 0.201794 0.8402 EMPLOYED 0.012668 0.047951 0.264190 0.7918 HOUSE 0.058834 0.048782 1.206062 0.2288 LOG_INCOME_ -0.044968 0.077425 -0.580791 0.5618 MARRIED 0.012413 0.052673 0.235660 0.8139 SEX -0.005637 0.041425 -0.136077 0.8919 MENTAL -0.041898 0.028007 -1.495982 0.1358 PHYSICAL 0.014039 0.026186 0.536118 0.5923 LOCAL_FACILITIES -0.005249 0.024894 -0.210868 0.8331 R-squared 0.143252 Mean dependent var 0.260397 Adjusted R-squared 0.101166 S.D dependent var 0.368692 S.E of regression 0.349545 Akaike info criterion 0.784338 Sum squared resid 34.82178 Schwarz criterion 0.969527 Hannan-Quinn criter 0.858451 Durbin-Watson stat 1.587962 Log likelihood -102.6506 F-statistic 3.403806 Prob(F-statistic) 0.000041 Weighted Least Squares analysis result 70 Dependent Variable: HAPPINESS_LEVEL Method: Least Squares Date: 03/26/09 Time: 00:52 Sample: 300 Included observations: 300 Weighting series: LOG(INCOME) Weight type: Standard deviation (average scaling) White heteroskedasticity-consistent standard errors & covariance Variable Std Error Coefficient C AGE AGE2 LOCATION B_A CHILD CRIME EMPLOYED HOME LOG_INCOME_ MARRIED SEX MENTAL PHYSICAL LOCAL_FACILITIES -4.798837 -0.07596 0.000985 0.112056 0.13041 0.194615 -0.170578 -0.091821 0.12034 0.853113 0.076934 0.125257 0.41812 0.326015 0.183039 t-Statistic Prob 0.646098 -7.427413 0.029672 -2.559934 0.000384 2.565293 0.069426 1.614026 0.072101 1.808711 0.066457 2.928435 0.088735 -1.922338 0.078011 -1.177029 0.07697 1.563466 0.113401 7.522991 0.082633 0.931028 0.065258 1.919409 0.043286 9.659449 0.040613 8.027378 0.038134 4.799881 0.011 0.0108 0.1076 0.0715 0.0037 0.0556 0.2402 0.1191 0.3526 0.0559 0 Weighted Statistics R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood F-statistic Prob(F-statistic) Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter Durbin-Watson stat Weighted mean dep 6.704158 1.234132 1.634161 1.81935 1.708274 1.204289 6.64145 0.888361 Mean dependent var 0.882877 S.D dependent var 0.523865 Sum squared resid 1.220113 6.796667 1.530729 78.21397 0.884698 0.879034 0.534613 81.45624 -230.1241 156.1984 Unweighted Statistics R-squared Adjusted R-squared S.E of regression Durbin-Watson stat 71 Appendix 2: Questionnaire I Fill the blank with your answer or stick on the box with your choice: How old are you? What is your sex? Female Where you live? Urban Male Other locations How much is your household’s income per month? (USD) Have you got married? Yes No Do you have own house? Yes No Do you have any child? Yes No Do you have B.A degree or above? Yes No Did you experience a violent crime? Yes No II Please choose a number in the ladder from at the bottom to 10 at the top The top of ladder represents a best possible life for you and the bottom of the ladder represents a worst possible life for you Please circle on the point which you consider is the most appropriate to you Overall, how happiness is you got today? 10 10 10 10 Overall, how estimated are you with your physical health? Overall, how estimated are you with your mental health? 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Evidence from Surveys of Subjective Well-being International Finance, 6(1), p 1-26 77 ... reveals the result as estimate determinants of happiness in Binh Dinh province This study tries to answer the main questions: What are the determinants of happiness in Binh Dinh Province? The research... answer the main question In this research, the expectation of these determinants has significant effect to the certain level of happiness of Binh Dinh province This paper outline consists of five... Overview of Binh Dinh province Although affected by the global economic recession, the economy of the Binh Dinh province for the period of 2006 - 2010 -continued to increase, year after year In recent