Why are City Residents Less Happy than the Rest of the Population in Developed Countries? Studying the Urban-Rural Happiness Gap in Denmark Using Blinder-Oaxaca Decomposition

Abstract

In Denmark, and in developed countries in general, urban residents tend to report lower subjective well-being than rural residents. This difference has been referred to as a happiness paradox as cities historically have pulled in residents from the countryside in what has become known as the rural exodus. This paper explores the urban-rural happiness gap in Denmark. Using the Danish Rural-Urban Survey administered in 2011/2012 (n = 2000), the paper compares the respondents who live in the five largest cities in Denmark (Copenhagen, Aarhus, Odense, Aalborg, and Esbjerg) to the respondents who live in other parts of the country. The residents in the five largest cities report significantly lower life satisfaction than residents in the rest of the country. In contrast to evidence from other developed countries, this urban-rural happiness gap is found to be consistent across groups in the Danish society, e.g., across age, education, and employment groups. Further, the results show that the urban-rural happiness gap loses its statistical significance - and the two groups display similar satisfaction levels - when adjusting for several important factors. Decomposition analyses reveal that differences in urban-rural characteristics explain up to 94% of the urban-rural happiness gap. Of these urban-rural characteristics, lower access to nature amenities, lower bonding social capital, lower rates of retired people, and higher rates of non-native residents in the five largest cities in Denmark were found to account for up to 37%, 22%, 14%, and 9% of the urban-rural happiness gap, respectively.