ANALYSIS OF LIFE SATISFACTION IN LATVIA

This paper gives an extract of major pros and cons whether self assessment of overall life satisfaction is objective measure in both micro and macro level. Significant amount of researches aimed to analyze the use of self assessed life satisfaction levels for individual and public welfare served as the basis of this paper. It is concluded that individuals consciously or unconsciously tend to include in their rating both short-term and long-term factors which represent such life values that cannot be measured otherwise. Paper investigates theoretical aspects of the link between material and social wellbeing. Easterlin paradox is analyzed to understand the relationship between income and life satisfaction scores within one society and amongst countries with a conclusion that there is significant positive correlation in the first but none in the latter. Theoretical analysis is supplemented by an empirical findings from Latvian data obtained in the 4th wave of European Value Survey. Results show that there is a significant increase of life satisfaction levels in higher income groups. Upward trends are present also in cross sectional data by gender however there is a slight fluctuation in the slope representing differences of male and female life satisfaction at the same income level. Comparison is made between other Baltic countries - Lithuania and Estonia - results show that similar correlation is in place but the same income level is associated with dfferent life satisfaction level depending on country indicating other than income factors to be significant in overall satisfaction rating. Results in line with Easterlin paradox are found from regional analysis representing that there is positive correlation of income and life satisfaction in the whole country dataset but this correlation is not in force comparing local regions: Riga with the highest average income per household does not represent the highest life satisfaction scores.