ABSTRACT
The misery index combines unemployment and inflation, two macroeconomic problems that adversely affect both individual and societal well-being. By taking into account both unemployment and inflation rates, the misery index measures the extent of economic distress within society and the deterioration of macroeconomic well-being. In addition to economic developments, social and political factors may also play an important role in determining the level of the misery index. This study examines the effects of economic growth, oil rents, energy use, and government integrity on the misery index, a composite indicator based on inflation and unemployment, in six selected Muslim-majority OPEC member countries (Algeria, Iran, Kuwait, Libya, Nigeria, and Saudi Arabia) over the 2002–2020 period using a random-coefficient panel model. These countries were selected based on their respective shares of global crude oil production and variation in their per capita income levels. The main objective of this study is to test whether the effects of these variables are homogeneous across countries and to determine how country-specific structural and institutional characteristics shape the dynamics of macroeconomic welfare loss. In this regard, a random-coefficient model is used to examine country-specific variations in the misery index by accounting for macroeconomic and resource-related factors, as well as institutional quality variables such as government integrity, and to identify heterogeneity across selected Muslim-majority OPEC economies. The analysis indicates that the effects of the explanatory variables such as economic growth, oil rents, energy use, and government integrity on the Misery Index vary significantly across countries in both sign and magnitude. Oil rents had a mitigating effect on the Misery Index in Algeria and Libya but positive in Iran, while no statistically significant effect was found in the remaining countries. The study moves beyond an average-effects approach by identifying country-specific effect patterns. These findings suggest that policymakers in the selected Muslim- majority OPEC member countries should adopt differentiated strategies that account for institutional and structural differences rather than rely on one-size-fits-all policy solutions.