18
country-specific characteristics, and given our very limited sample size, we should not put too
much emphasis on these results.
While the actual type of religion does not seem to influence happiness after controlling for
country fixed effects, those people who go to church very often are relatively more satisfied
with their lives. One interpretation of this result is that those who are characterized by a desire
to participate in religious activities derive additional happiness from it. Another interpretation,
however, relates to the fact that many social groups working to bring down the communist
regime in Eastern Europe had operated within the church. Interestingly, the support for the
creation of a market economy does also not differ across religions after controlling for
country fixed effects (Hayo 2004). But those respondents who report regular visits to a church
show significantly more support for the market regime. Thus, the extra happiness of church
goers measured here may just be a reflection of the aftermath of regime change in these
countries.
5. Conclusion
This paper analyses happiness based on representative survey data from seven East European
countries at the beginning of the transformation process in 1991. The level of life-satisfaction
in these transition countries appears to be lower than in Western societies. Only about 16% of
inter-country happiness differences in Eastern Europe can be directly explained by variations
in national per capita income.
Although one might have expected to find that during the turbulent and sometimes chaotic
times of transformation that determinants of life-satisfaction known from studies on Western
countries lose their explanatory power, this is generally not the case. We find that most of the
effects of socio-demographic and economic variables known from studies on the US or
Western Europe carry over to these countries. Thus, determinants of happiness during times
of transition are quite similar compared to other societies. This makes data from these
countries suitable for an analysis of the effects of other influences on happiness, such as
different macroeconomic conditions or institutional conditions. We also study variables that
so far have not received much attention in the literature. A new result is that rural respondents
report higher life satisfaction than city dwellers. This finding can be explained by differences
in purchasing power and a slower adjustment of aspiration levels of rural dwellers. Moreover,
the data indicate that the religious belief of the respondent does not seem to play a role in
determining happiness. On the other hand, the frequency of church visits has a significantly