The Economics of Happiness: Linkages between Microfinance, Happiness, and Wellbeing in Rural Thailand

  • Thanawit Bunsit

Student thesis: Doctoral ThesisPhD


The idea of microfinance has burst into the area of global poverty reduction. Many comments have been made about its benefits such as; it is an alternative tool for poverty alleviation and sustainable development. Many studies have attempted to assess different facets of the impact of microfinance, especially trying to show its potential for greater financial inclusion and economic benefits using advanced rigorous quantitative approaches. Although some studies have evaluated this topic in the past there remains some significant gaps in the literature, including the impact of microfinance on other dimensions such as the social impact, education or environmental impact, the impact on happiness and subjective wellbeing of its clients has been hardly examined.This study aims to fill this gap by using rigorous quantitative methods with a rich qualitative dataset to assess the impact of microfinance on both economic and non-economic aspects, especially the happiness and psychological dimension. I Use primary data from a household survey and an ethnographic approach combining quantitative methods such as matching estimators, propensity score matching with nonparametric regression. The mixed methods were employed in order to evaluate the impact of the microfinance schemes on the improvement of borrowers’ wellbeing, household condition and local economic and environmental development.The most notable findings were that the borrowers from the savings group using group lending schemes utilised the loan for mainly entrepreneurial purposes and household spending, performed better than other groups of borrowers. This could be seen from the increase in household income and a high repayment rate. In addition, by observing the social impacts, it indicated that the group lending together with the ecotourism project generated and strengthened the social ties in the community. The group members also produced high positive psychological indicators compared to the non-member households. Easterlin’s paradox was revisited and found that not only was it income that affected happiness and wellbeing, but other factors seemed to have an influence on self-reported happiness. Those factors included health or health condition of family members which significantly influenced self-reported happiness in all models. Considering the impact of microfinance on happiness and wellbeing, it was found that clients of the group lending scheme can repay better and led to a higher level of self-reported happiness and subjective wellbeing. The ability to repay also affected a low level of stress or negative moods.
Date of Award26 Sept 2016
Original languageEnglish
Awarding Institution
  • University of Bath
SupervisorJohn Cullis (Supervisor) & Bruce Morley (Supervisor)


  • microfinance, impact assessment, happiness, wellbeing, rural Thailand

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