Econometric analysis of the relationship between social cohesion and well-being: The case of Turkey

Social cohesion has been conceptually seen as a regulatory characteristic of a society and is defined as interdependence, common loyalty and solidarity among community members. The concept of development is not only understood by economic growth but also by well-being level. Basic social values such as freedom, equality and security are important for a high level of prosperity. In this study, since it is aimed to understand the importance of social cohesion factors for economic development, well-being has been taken as an indicator of economic development. The Three-Stage LS method was used to examine the relationship between social cohesion and well-being. In the first stage, the model where absolute income is considered as the endogenous variable was estimated by OLS. Therefore, in the first stage, instrumented values were estimated for the endogenous variables (AI) in the system. These values were developed by regressing all explanatory variables in the system on the endogenous variable using OLS. In the second step, a GLS estimator for the system and a consistent estimator for the error term matrix were calculated. In the last stage, the estimated error term matrix in the GLS estimation equation was used to estimate all parameters of the system. Three dependent variables were used to represent well-being. These are happiness, satisfaction and "interaction term",which is calculated from happiness and satisfaction variables. Sixth wave of the World Values Survey database Turkey 2012 data are used. Keywords: Social cohesion, well-being, economic development, three-stage least squares, world values survey.