Is capitalism making you lonely?

By Simas Kucinskas. He has a Ph. D.in economics. He is also a visiting scholar at Humboldt University. Excerpts:

"I use two main data sources:

• To quantify capitalism, I employ the Index of Economic Freedom from The Heritage Foundation. That’s a commonly used metric of how “capitalist” a society is;

• To measure loneliness, I leverage the State of Social Connections study conducted by Gallup and Meta in 2022. The main measure of loneliness is the percentage of the population that reports feeling “very or fairly lonely” when asked, “In general, how lonely do you feel?”.

"The dataset covers 133 countries"

"That’s a negative correlation of -0.57. Economic freedom and loneliness are moderately negatively correlated.

Is that what you predicted?"

"Once I saw the negative relationship, I thought it would disappear after some minor changes in the analysis. However, as we will see, the correlation is fairly robust.

According to these estimates, a ten-point increase4 in the economic freedom score is associated with a 6.5 percentage-point decrease in loneliness (95% confidence interval: [4.8, 8.3]). In standard deviation terms, that’s roughly a 0.5 standard deviation decline, a moderate effect size."

"I replicate the analysis with an alternative metric of loneliness. I now use a measure of “social connectedness” (i.e., inverse of loneliness). As expected, there’s a positive relationship between economic freedom and social connectedness" [correlation = .36]

"you may worry about omitted-variable bias. One specific concern is that loneliness varies over the lifecycle. Previous research has found that loneliness follows a U-shaped pattern, with young people and the elderly being more lonely than those in middle age.

To test for this possibility, I control for the percentage of the population aged 25–64 years (i.e., the middle of the age distribution)" [-.34 correlation when both loneliness and economic freedom are age adjusted]

"While the correlation is roughly halved, it remains negative and statistically significant: A ten-point increase in economic freedom corresponds to a 3.7 percentage point reduction in loneliness (95% confidence interval: [1.8, 5.6])."

"We can ask whether countries that become more capitalist become more lonely. Now we’re making a comparison across time, not just across countries."

"Moving up by 1 place in the economic freedom ranking improves the loneliness ranking by around 0.60 places (95% confidence interval: [0.20, 1.02])." [from 2016-2022, correlation of -.36]"