The Easterlin Paradox
Richard A. Easterlin () and
Kelsey O'Connor ()
Additional contact information
Richard A. Easterlin: University of Southern California
No 13923, IZA Discussion Papers from Institute of Labor Economics (IZA)
The Easterlin Paradox states that at a point in time happiness varies directly with income, both among and within nations, but over time the long-term growth rates of happiness and income are not significantly related. The principal reason for the contradiction is social comparison. At a point in time those with higher income are happier because they are comparing their income to that of others who are less fortunate, and conversely for those with lower income. Over time, however, as incomes rise throughout the population, the incomes of one's comparison group rise along with one's own income and vitiates the otherwise positive effect of own-income growth on happiness. Critics of the Paradox mistakenly present the positive relation of happiness to income in cross-section data or in short-term time fluctuations as contradicting the nil relation of long-term trends.
Keywords: Easterlin Paradox; economic growth; income; happiness; life satisfaction; subjective well-being; long-term; short-term; trends; fluctuations; transition countries; less developed countries; developed countries (search for similar items in EconPapers)
JEL-codes: D60 I31 O10 O5 (search for similar items in EconPapers)
Pages: 42 pages
New Economics Papers: this item is included in nep-hap and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: The Easterlin Paradox (2020)
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:iza:izadps:dp13923
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().