Variables used in the empirical analysis

As stated in the introductory section, SWB is the dependent variable in this study. In order to determine their self-reported SWB, adults in the household were requested to report on their own level of SWB during each wave of the NIDS survey (Posel 2012). This was done by asking all the adults how they feel about their life as a whole right now?" (Posel 2012).

As the aim of this study is to determine whether remittances are important in determining SWB, the remittance variable is regarded as the focus explanatory variable. As a robustness check an additional ordered probit model will be employed using remittances per capita as the outcome variable (these results are contained in Appendix A)2_.

The next set of relevant regressors was drawn from the existing empirical literature in this field. These control variables can be sub-divided into personal characteristics and location characteristics and are consistent with literature.

The personal characteristics include age, age squared, gender, population group (race), marital status, height, Body Mass Index (BMI), religion and education. The remaining control variables that form part of personal characteristics include whether the respondent smokes or not, whether the respondent has a chronic illness or suffers from a disability or not, and whether the respondent partakes in exercise or not. The last two control variables, province and geo-type fall under the category of location.

Age refers to the adult respondent’s age in years. The age squared variable was included to test for non-linearity in the relationship that exists between age and happiness (Botha & Booysen 2011).

2 Remittances per capita was generated by dividing the household remittances variable by the household size. This variable was then further logged in attempt to smooth the skewness found in the original created variables

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Gender pertains to the respondent being male or female. Male respondents are referred to as the base group (Blaauw & Pretorius 2013). In certain cases, reference was made to base groups. The base group variables were selected based on research conducted, and according to literature reported higher or lower levels of SWB when compared with the other groups. As an example, male respondents were selected as the base group of the gender variable as literature on South African studies confirmed them to report higher levels of SWB when compared with female respondents.

The population group variable is sub-divided into: African, Coloured, Asian/Indian and White. African respondents are referred to as the base group because literature generally shows that they reported lower levels of SWB when compared with the other population groups.

Marital status indicates whether a respondent is married, divorced/separated, living with a partner or a widow/widower or have never been married. For the marital status variable, marriage is the base group. This is because married individuals generally reported higher levels of SWB based on literature. Height refers to the height of the respondent in centimetres.

BMI is another variable that is not available within the NIDS data set and thus needed to be generated3_{. Following Gerdtham and Johannesson (1997) as well as Blaauw and} Pretorius (2013), the BMI variable was further explored by creating a binary variable where a value of one was given if the respondent had a BMI higher than 30, thus categorising him or her as obese.

Religion pertains to the importance of religious activities to the respondent. Blaauw and Pretorius (2013) tested for the impact of religion on SWB without making a distinction between the different types of religious groupings. As a result, the religion variable was converted into a binary variable, where a value of one indicated that the respondent expressed that taking part in some form of religion activities was important.

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Additional variables include smoking, illness/disability and exercise. These variables were converted into binary variables and a value of 1 (one) was assigned when the respondent smoked, had an illness or disability, and when the respondent did not take part in any form of exercise.

Education refers to the highest level of education of the respondent. The level of education ranges from “no schooling” to a higher degree such as a Master’s or a doctorate. Furthermore, the education variable was converted into a dummy variable were “no schooling” was the base group as one would expect the level of SWB to increase as the level of schooling increased.

In terms of the two location variables “province” refers to any one of the nine provinces in South Africa where the respondent resides. Respondents who reside in the Western Cape are referred to as the base group. Geo-type refers to Urban Formal (UF), Urban Informal (UI), Rural Formal (RF) and Tribal Areas (TA).

All variables were recoded and the cases where missing observations were excluded. Furthermore, in cases where the respondent did not know or refused to answer the variables were also recoded.

Table 7 below summarises the explanatory variables that will be used in the empirical analysis.

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Table 7: A summary of the explanatory/control variables used in the empirical analysis

Variable

Remittances Dummy variable of household remittances

Age Age in years Age of the respondent in years

Age² (Age in years) ² Age x age to test for

non-linearity

Gender Female Dummy=1 if respondent is female (male as base group)

Population group

Coloured Dummy=1 if respondent is Coloured (African as base group) Asian/Indian Dummy=1 if respondent is Asian/Indian (African as base

group)

White Dummy=1 if respondent is White (African as base group)

Marital Status

Living with partner Dummy=1 if respondent lives with a partner (married as base group)

Widow/widower Dummy=1 if respondent is a widow or widower (married as base group)

Divorced/Separated Dummy=1 if respondent is divorced or separated (married as base group)

Never married Dummy=1 if respondent has never been married (married as base group)

Height _{Height in cm}

BMI Dummy=1 if respondent has a BMI larger than 30

Religion Dummy=1 if respondent deems religion to be very important in

his or her life

Smoke Dummy=1 if respondent smokes

Chronic illness Dummy=1 if respondent suffers from an illness or disability

Exercise Dummy=1 if respondent does not do any exercise

Education Dummy=1 if the respondent never attended school

Province

Eastern Cape Dummy=1 if respondent resides in the Eastern Cape (Western Cape as base group)

Northern Cape Dummy=1 if respondent resides in the Northern Cape (Western Cape as base group)

Free State Dummy=1 if respondent resides in the Free State (Western Cape as base group)

KwaZulu-Natal Dummy=1 if respondent resides in KwaZulu-Natal (Western Cape as base group)

North West Province Dummy=1 if respondent resides in the North West Province (Western Cape as base group)

Gauteng Dummy=1 if respondent resides in Gauteng (Western Cape as base group)

Mpumalanga Dummy=1 if respondent resides in Mpumalanga (Western Cape as base group)

Limpopo Dummy=1 if respondent resides in Limpopo (Western Cape as base group)

Geo-Type

Tribal authority areas Dummy=1 if respondent resides in a Tribal authority area (Rural Formal as base group)

Urban formal Dummy=1 if respondent resides in an Urban formal area (Rural Formal as base group)

Urban informal Dummy=1 if respondent resides in a Rural informal area (Rural Formal as base group)

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