Income and happiness: Evidence, explanations and economic implications
Andrew Clark (),
Paul Frijters () and
PSE Working Papers from HAL
There is now a great deal of micro-econometric evidence, both cross-section and panel, showing that income is positively correlated with well-being. Yet the famous Easterlin paradox shows essentially no change in average happiness at the country level, despite spectacular rises in per capita GDP. We argue that survey well-being questions are indeed good proxy measures of utility, and resolve the Easterlin paradox by appealing to income comparisons: these can be to others (social comparisons) or to oneself in the past (habituation). We review a substantial amount of econometric, experimental and neurological literature consistent with comparisons, and then spell out the implications for a wide range of economic issues.
Keywords: revenu; bien-être; comparaisons sociales; politique économique; habituation; happiness; social comparisons; income; economic policy (search for similar items in EconPapers)
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00590436
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65) Track citations by RSS feed
Downloads: (external link)
Working Paper: Income and happiness: Evidence, explanations and economic implications (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hal:psewpa:halshs-00590436
Access Statistics for this paper
More papers in PSE Working Papers from HAL
Bibliographic data for series maintained by CCSD ().