The Determinants of Happiness among Entrepreneurs

Using data from Global Entrepreneurship Monitor and the adult population survey in 2013, which included for first time subjective measures for happiness, this study investigates determinants within entrepreneurs that can affect their level of happiness. Following existing literature in entrepreneurial field, this paper distinguishes entrepreneurs based on motivational perspective and venture characteristics. Furthermore, by taking into account perceptual variables such as freedom of choice, fear of failure, expectations and utility, we predict that motivational perspective, and in particular opportunity perception, is the most significant determinant of happiness among entrepreneurs. Using a probit model, the results suggest that entrepreneurs who pursue a business opportunity have higher probability of stating happier than those who became entrepreneurs due to unemployment or lack of alternatives. In addition, no significant difference on the level of happiness is found within distinctions of entrepreneurs based on venture characteristics. These results point out the importance of perceptual variables on the level of happiness among entrepreneurs.