Public expenditures and life satisfaction: Evidence from Turkey

Abstract

Gross domestic product has been the primary development indicator for nearly a century and has played an important role in designing and evaluating public policies and comparing countries' development levels. On the other hand, the last two decades have seen a growing trend toward alternative well-being indicators. One of these alternative indicators is life satisfaction. We study the relationship between public expenditures such as health, education, and recreation and people's life satisfaction. We employ the OLS and ordered probit models utilizing a large representative household survey with more than 196,000 observations from Turkey. Our findings indicate that health, education, and recreation expenditures are positively associated with individuals' life satisfaction. We also explore potential mechanisms underlying the significant effects of public expenditures on life satisfaction. These significant correlations may be driven by satisfaction with health services, educational services, and social life.