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positive impact on life satisfaction. Consequently, it appears that exercising religious beliefs
generates happiness. However, note that resistance against the communist regime was often
organized within the church. Thus, it might be the case that the estimated positive effect on
happiness is caused by the joy about the regime change rather than by regularly exercising
religious beliefs.
The individual level analysis controls for national differences in average happiness by
including country dummies, which turn out to be highly significant. Preliminary evidence
concerning the explanation of these cross-country differences in average happiness points
towards the importance of national unemployment rates and the share of Orthodox in the
population. However, especially the latter variable may proxy for some other unobserved
country-specific characteristic. Hence, while some progress towards explaining inter-country
happiness differences in Eastern Europe can be made, the number of aggregate observations is
much too small for robust statistical inference. Here, having a bigger data set with
observations over time would be very helpful in providing more powerful tests than possible
within the present framework.
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