Investigating the effect of taxes and oil rent on happiness in selected MENA countries with the PSTR approach

Sadeghi Ghale, Maryam; Andayesh, Yaghoub; Mansouri, Seyed Amin; Golestaneh, Seyed Musa

doi:10.22075/ijnaa.2024.34988.5220

Investigating the effect of taxes and oil rent on happiness in selected MENA countries with the PSTR approach

Articles in Press

Document Type : Research Paper

Authors

Maryam Sadeghi Ghale ¹

Yaghoub Andayesh ¹

Seyed Amin Mansouri ¹

Seyed Musa Golestaneh ²

¹ Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, Iran

² Department of Psychology, Faculty of Literature and Humanities, Persian Gulf University, Bushehr, Iran

10.22075/ijnaa.2024.34988.5220

Abstract

Happiness is one of the most important and complex human emotions, whose effects on individual and social life are undeniable. Many and diverse elements play a role in creating and maintaining human happiness, for example, economic, social and cultural factors can be mentioned. Tax revenue is one of the key tools for governments to finance public expenditures, through which governments can provide the necessary financial resources to provide public services, such as health, education, and essential infrastructure. So far, a lot of research has been done in the field of happiness and factors affecting it. But the investigation of the threshold effect of tax revenues on happiness has received less attention. Therefore, the purpose of this research is to investigate the threshold effect of tax revenues on happiness in selected MENA countries in the period of 2008-2023. Also, the effect of oil income rent, corruption, inflation and unemployment on happiness is investigated and analyzed. For this purpose, the panel smooth transition regression model (PSTR) has been used. In this research, according to the conducted studies and the theoretical basis, the variable of tax income has been determined as a transfer variable and its threshold level has been determined (2.77) in the studied countries. The results obtained from the estimation of the model confirm a two-regime nonlinear regression model with a transfer function and a threshold limit. The results show that when the tax income is lower than the threshold, it will have a positive effect and if it is higher than the threshold, it will have a negative effect on happiness. Also, the results show that the variables of corruption perception index have a positive effect and the variables of oil income rent, inflation and unemployment have a negative effect on happiness.

Keywords

happiness

tax revenue

oil revenue rent

panel smooth transition regression (PSTR)

MENA countries

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