Happiness Prospers in Democracy

An econometric analysis of a happiness function, based on a surveyof 6,000 persons in Switzerland, indicates that:(1) the more developed the institutions of direct democracy, the happier the individuals are;(2) people derive procedural utility from the possibility of participating in the direct democratic process over and above a more favorable political outcome;(3) the unemployed are much less happy than the employed, independent of income;(4) higher income is associated with higher levels of happiness.The consideration of institutional differences in cross-regional data offers important new insights into happiness research.