Document Type : ORIGINAL ARTICLE

Authors

• Ramin Amani ¹
• Abbas Assari Arani ²

¹ Ph.D. Candidate in Economics, Department of Economic Development and Planning, Faculty of Management and Economics, University of Tarbiat Modares, Tehran, Iran.

² Associate Professor, Department of Economic Development and Planning, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran

Abstract

The central question of this study is whether greater use of the Earth’s resources can raise countries’ levels of happiness. To answer it, the paper examines the relationship between ecological footprint and happiness for two groups of countries—OECD and Middle Eastern—using a dynamic panel model estimated by standard and two-step generalized method of moments over 2014–2024. The dependent variable is the Happiness Index, and the regressors include per capita ecological footprint and its squared term, the Human Development Index, general government expenditure, and institutional quality. The first lag of happiness is positive and statistically significant in both groups, confirming strong persistence, which is more pronounced in Middle Eastern countries. For OECD members, the ecological footprint has a negative coefficient while its squared term is positive, yielding a standard U-shaped relationship: higher resource use at low and medium levels reduces happiness, but beyond a threshold of about two global hectares per capita, additional use raises happiness. For Middle Eastern countries, the ecological footprint enters with a positive coefficient and its squared term with a negative coefficient, implying an inverted U-shape with a turning point around 2.5 global hectares per capita; greater resource use increases happiness only up to this level, after which its effect becomes negative. Overall, the results indicate that exploiting the Earth’s resources can support sustainable happiness only when accompanied by human development, effective governance, and sound, forward-looking and environmentally responsible resource management over time.

Keywords

• Happiness
• Ecological Footprint
• GMM Model

Main Subjects

• Kuznets Curve