Horizontal and Vertical Contexts on Europeans' Well-Being

Abstract

[Abstract] This paper analyzes the economic and social contextual determinants of individual life satisfaction and happiness across Europe. We provide new theoretical and empirical ar-guments about the consequences of horizontal and vertical spatial dependences in mul-tilevel models. Using individual European data, we estimate a random effects spatial lag of X (SLX) hierarchical model, which allows for local spillovers of contextual factors to neighboring regions defined at several aggregation levels. Our results not only confirm the role of regional contextual factors but the significance of their spatial lags, probably indicating the presence of clustered latent variables.