When does economic freedom promote well being? On the moderating role of long-term orientation

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An increasing volume of literature has shown that economic freedom is related to life satisfaction. However, life satisfaction may not fully describe well-being because of its subjective nature. This study contributes to previous literature by extending analysis of the relationship between economic freedom and life satisfaction to other dimensions of well-being as measured by the better life index of the OECD that includes both objective and subjective measures. A second innovation of this paper is that, in explaining the differences in well-being between countries, we conjecture that the relationship between free market institutions as measured by economic freedom and well-being is moderated by the cultural dimension of long-term orientation. This hypothesis is supported for six out of 11 dimensions of well-being: income, community, health, life satisfaction, safety, and work—life balance. Our study shows that looking at interdependencies between culture and formal institutions can increase the explanatory power of internationally comparative research into well-being.
Original languageEnglish
Pages (from-to)127-153
JournalSocial Indicators Research
Early online dateNov 2019
Publication statusPublished - May 2020


  • economic freedom
  • long-term orientation
  • moderation
  • OECD better life index
  • well-being


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