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Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox

SSRN Electronic Journal
2008
  • 18
    Citations
  • 12,743
    Usage
  • 3
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    18
    • Citation Indexes
      15
    • Policy Citations
      3
      • Policy Citation
        3
  • Usage
    12,743
    • Abstract Views
      12,177
    • Downloads
      566
  • Captures
    3
    • Readers
      3
      • SSRN
        3
  • Ratings
    • Download Rank
      97,596

Article Description

The "Easterlin paradox" suggests that there is no link between a society's economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

Bibliographic Details

Betsey Stevenson; Justin Wolfers

Elsevier BV

Happiness; subjective well-being; Easterlin Paradox; life satisfaction; economic growth; well-being-income gradient; hedonic treadmill

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