Khatai Aliyev

Azerbaijan State University of Economics (UNEC),

Baku, Azerbaijan; Baku Engineering University, Khirdalan, Azerbaijan; ASERC, Baku, Azerbaijan

E-mail: khatai.aliyev@unec.edu.az 

ORCID 0000-0001-8161-6269

Institutional trust and life satisfaction in selected Post-Soviet countries: The mediating role of 'perceived relative income'

Ilkin Gasimov

Baku Engineering University, Khirdalan, Azerbaijan; Azerbaijan State University of Economics (UNEC),

Baku, Azerbaijan

E-mail: ilqasimov@beu.edu.az 

ORCID 0000-0003-1388-7571

Hazi Eynalov

Baku Engineering University, Khirdalan, Azerbaijan

E-mail: heynalov@beu.edu.az 

ORCID 0000-0003-4227-2461

Abstract. This research investigates the impact of institutional trust on self-reported life satisfaction in the case of eight selected post-Soviet (non-EU member) countries. The study examines a potential explanation for the aforementioned impact and investigates the mediating role of perceived relative income for the relationship between institutional trust and life satisfaction. The sample contains a pool of country-level cross-sectional data (N=10410; n_female=5952, n_male=4458, 〖Mean〗_age=43.86) obtained from the World Values Survey (wave 6). The study applies mediation analysis to explore institutional trust's direct and indirect effects on individuals' life satisfaction. The validity of positive association is confirmed for pooled and country-level analyses. Simultaneously, mediation analyses provide evidence for the hypothesized indirect effect of institutional trust on life satisfaction through perceived relative income in the case of pooled data and five selected countries (Armenia, Azerbaijan, Belarus, Russia, and Ukraine). A significant mediation effect is not found in Georgia, Kazakhstan, and Uzbekistan. Policy recommendations derived from the research suggest focusing on public policies and efficient communication tools to enhance institutional trust among citizens in conjuction with decreasing income inequality.

Received: February, 2021

1st Revision: March, 2022

Accepted: March, 2022

DOI: 10.14254/2071-789X.2022/15-1/6

JEL Classification: I31, I38

Keywords: life satisfaction, subjective well-being, institutional trust, income inequality, public policy, mediation analysis