Poor but Happy? Understanding Happiness in Bangladesh

Bangladesh is considered as one of the poorest countries in the world. However, so far research identifies that people in Bangladesh enjoy higher level of happiness despite of their low income compared to many other countries in the world with high percapita income. This paper explores the phenomenon by identifying the correlates of happiness through analyzing quantitative data from World Value Survey. We employ both cross section and pseudo panel analysis to identify the effects and changes over time in happiness. The results from our empirical model based on cross section and pseudo panel, suggest that income is one of the core determinants of happiness. Individuals do care about their social class and relative social position in the area they live. Besides, the effects from variables such as: freedom of choice and health status are strong variables to influence individuals happiness at point in time and over time. Therefore, it is supported by our analysis that money can buy happiness in a country where fulfillment of basic needs of majority of population is a major cause of concern. The case of ability to meet the basic needs significantly improves individuals’ level of happiness. This conclusion, apparently gives the answer of paradox of rising happiness in Bangladesh in the era of economic growth and prosperity.