The relationship between natural resource abundance and happiness for lower middle-income countries

Abstract

The resource curse, a concept linking natural resource wealth to poor economic performance, is well-documented. Separately, emerging studies suggest economic growth correlates with increased happiness. However, the intersection of these two areas—natural resource abundance and happiness—remains underexplored. This paper investigates the relationship between natural resource abundance and happiness by employing linear regression analysis on data from 35 lower middle-income countries from 2017 to 2021. Using the Natural Capital Index and the World Happiness Report, this study addresses the question: "Is there a correlation between natural resource abundance and happiness?" by integrating theories from the Resource Curse and the Easterlin Paradox. Additionally, it compares the established correlations between (1) natural resource abundance and income, and (2) income and happiness. The findings reveal significant correlations between natural resource abundance and income, and between income and happiness, but the correlation between natural resource abundance and happiness is less conclusive. From a managerial perspective, these results suggest that policymakers in resource-rich lower middle-income countries should focus not only on economic metrics but also on well-being indicators when designing development strategies to ensure balanced and sustainable growth.