It is accepted that institutional conditions such as the degree of government decentralization, the possibility of referenda, the share of government expenditures between governmental units, number of political parties, party vote shares, etc. vary greatly within a country. In their study of Swiss cantons, Frey and Stutzer (2000) found that the degree of direct democracy (measured by the possibility and ease of popular referenda and initiatives) and local autonomy not only vary significantly across cantons but that they have a significant effect on life satisfaction. A more active role of the citizens in the political process, and political decision- making closer to the citizens translate into political outcomes closer to the preferences of the voters. In addition, the citizens may gain procedural utility from the possibility of directly participating in the political process. The authors argue that both these effects raise subjective well-being.
The first objective of this paper is to examine for the Spanish economy the impact on happiness of a number of factors, such as the political context at the local, regional and national level. The second objective is to describe how the impact of these variables varies among the different regions of Spain.
The main data source will be the European Social Survey (ESS) (www.europeansocialsurvey.org). The ESS provides rich data on individuals’ subjective well-being, political interests, trust, electoral participation, party allegiance, socio-political orientations, environmental attitudes and demographic and socio-economic characteristics required to control for individual heterogeneity (age, gender, education, employment status, marital status, number of children, income, etc.).