Conditional Regional Differences in Subjective Well-Being in Central and Eastern Europe and the Role of Social Capital

This paper tests empirically the conditional difference in subjective well-being between and within regions in 5 countries from Central and Eastern Europe after controlling for a set of widely-accepted socio-demographic and regional characteristics from 2002 to 2014. Further, the paper tests if the unexplained conditional difference in subjective well-being might be partially explained by social capital. Using a 3-level hierarchical model, mediation analysis and an ordered probit model, this paper concludes that on average individuals living in the big cities of the capital city regions are happier and more life satisfied as compared to individuals living in other regions and communities. This is largely explained by the macroeconomic and environmental characteristics. Although it seems that social capital mediates the effect of the place of living on SWB in the case of rural communities versus big city communities, the total mediating effect of social capital for all regions and communities is insignificant. Further, results indicate that the biggest contributors to the mediation effect are the norms and sanctions. Thus, it seems that social capital at least partly might be accounted for the conditional gap in SWB between the rural community and the big city community within CEE countries. Finally, results suggest that happiness and life satisfaction should not be used interchangeably as this might lead to false generalized conclusions. However, due to various limitations the obtained results should not be interpreted as a causal claims, but just as mere associations.