Abstract

The aim of this paper is to investigate the relationship between multidimensional objective well-being and people's happiness. Differing from previous economic studies, mainly focused on the effect of production and .one-variable. measures of socio-demographic factors on happiness, we account for the multidimensional nature of people's objective well-being by resorting to a recently-created composite index of progress. It combines ten synthetic sub-indicators, each describing a respective dimension of objective well-being, computed by combining 57 elementary macroeconomic and social variables. Using a panel setting, our findings provide evidence of a positive and significant relationship between subjective and multidimensional objective well-being and its domains. Results suggest that improving the quality of the exogenous conditions that determine economic and social progress may contribute to enhancing the subjective well-being of individuals living in an area, which is the ultimate goal of welfare policies.