Determinant of Macro-Economics: Does Income Inequality Influence Happiness? Evidence From Indonesia

Abstract

This research aims to see does income inequality determines the happiness of Indonesian. This is important because there is a unique condition where Indonesia to be one of the developing nations which have a complexity of the income inequality issue, but it still has a high happiness index rate. This research uses cross-sectional data consisting of multiple indicators of all the variables from 34 provinces of Indonesia such as inflation, unemployment, and government investment as the macroeconomic factors, which have a direct impact on income inequality as well as happiness index, and this research uses path analysis model.The result delineates that although macro economics variables and income inequality have negative correlation toward happiness of Indonesian, it it not fully effected on it because most happiness of Indonesians are coming from another aspect such as socio-culture and religiosity

Do Poverty and Human Development Index Influence Happiness? Evidence from Indonesia through Islamic Studies Approach

“…This condition happened because the latter has a big responsibility to responsible what for their wealth used. Despite, happiness is not always measured by wealth but, religiosity and socio culture is the most prominent aspects to reach happiness specifically in Indonesia (Furwanti et al, 2021). The more religious people are, the more welfare they get.…”

“…Although the poverty rate of Indonesia was lay-down slightly, the issue of poverty is still prominent to be concerned because, it relates to the human welfare and happiness (Idrus & Rosida, 2020;Majumdar & Gupta, 2015). Nevertheless, Indonesia is quite a unique country because, although this country has a numerous complex-economic problems such as poverty rate issue and great income inequality rate, it still has the highest happiness rate compared to other As ian countries, and reaching a top 10 country in the world (Furwanti et al, 2021;Helliwell et al, 2021).…”

“…Taking Java island as the example which has a tremendous poverty and income inequality rate in every provinces (Arif et al, 2019) but this island also contributes a high happiness rate such as Yogyakarta, one of provinces in Java island that reached the highest rate of happiness and income inequality at the same time (Furwanti et al, 2021;Candra, 2017) as well as East Java, a province with the highest percentage of province, and poverty is one of seriouseconomic problem of such nations.…”

Happiness amidst the COVID-19 pandemic in Indonesia: exploring gender, residence type, and pandemic severity

“…Regional studies (Firmansyah et al 2017;Nandini and Afiatno 2020) shed light on context-specific happiness factors. Specific topics like religiosity (Kurniawati and Pierewan 2020), height (Sohn 2014), decentralization (Sujarwoto and Tampubolon 2015), and income inequality (Furwanti et al 2021) were examined, providing valuable insights. Furthermore, Pattinasarany (2018) conducted a cross-national analysis exploring happiness and life satisfaction determinants in Indonesia, Thailand, Japan, and South Korea.…”

“…Regarding inequality, the estimation results reveal an inverse connection between per capita expenditure inequality at the provincial level and self-reported happiness levels. In another study, Furwanti et al (2021) utilized cross-sectional data from all Indonesian provinces and a path analysis model, revealing that income inequality significantly and negatively influences happiness in Indonesia.…”