Using a monthly survey, this paper finds that supporters of the governing cabinet are significantly happier than non-supporters throughout our sample period. We investigate the reason and examine two hypotheses: 1) happy persons support the ruling Liberal Democratic Party, and 2) supporters of any governing party tend to be happy. Oaxaca decomposition analysis reveals that the difference in happiness is not attributable to the difference of attributes and personalities, rejecting hypothesis 1). On the other hand, the happiness of cabinet and anti-cabinet supporters was not significantly different after an election in which the governing party was replaced, supporting hypothesis 2).
2017 Association of Behavioral Economics and Finance