The determinants of individual happiness in Kazakhstan Yelena Kalyuzhnova *, Uma Kambhampati The University of Reading, Whiteknights, PO Box 218, Reading RG6 6AA, UK 1. Introduction Since its initial reforms in 1991, Kazakhstan has faced a long and severe recession, with GDP in 1999 only 63% of its 1991 level. Other socio-economic indicators like unemployment, inflation, and gross regional product also confirm this pattern. Although the economic situation had improved by 2000, unemployment had increased in almost all regions as a result of deeper post-privatisation restructuring and the laying off of excess labour in many enterprises. ‘‘In 1998–1999 Kazakhstani enterprises experienced difficulty with the competitiveness of their production in external markets, due to the much lower costs of wages in Asian countries’’ (Kalyuzhnova et al., 2003, p. 485). By 2005, Economic Systems 32 (2008) 285–299 ARTICLE INFO Article history: Received 23 July 2007 Received in revised form 24 December 2007 Accepted 19 February 2008 Keywords: Happiness Life satisfaction Transition economy Emerging economy Kazakhstan JEL classification: D1 J24 P2 ABSTRACT This paper investigates the impact of social, economic and institutional changes on individual perceptions of happiness in Kazakhstan. We use household level data for Kazakhstan for 3 years—1996 (in the initial years of transition), 2001 (as it became a fully fledged transition economy) and 2006 (an emerging economy with a market system in many sectors including banking and finance). Data across these years allow us to consider how the transition as well as personal, household and regional factors have impacted on individual happiness. We find that the size of dwelling had a significant impact in all 3 years and that ethnic Kazakhs were happier than Russians as transition matured. We also find that living in regions of high unemployment, contrary to expectations, did not increase the unhappiness of individuals. This is because living in regions with high unemployment meant that the unemployed did not feel too marginalised from society. At the same time, it allowed the employed to feel particularly fortunate. ß 2008 Elsevier B.V. All rights reserved. * Corresponding author. E-mail address: y.kaluyzhnova@reading.ac.uk (Y. Kalyuzhnova). Contents lists available at ScienceDirect Economic Systems journal homepage: www.elsevier.com/locate/ecosys 0939-3625/$ – see front matter ß 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.ecosys.2008.02.001