The Happiness-Income Paradox Revisited

Richard Easterlin, Laura Angelescu McVey (), Maggie Switek (), Onnicha Sawangfa () and Jacqueline Smith Zweig
Additional contact information
Laura Angelescu McVey: University of Southern California
Maggie Switek: Milken Institute
Onnicha Sawangfa: University of Southern California
Jacqueline Smith Zweig: University of Southern California

No 5799, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The striking thing about the happiness-income paradox is that over the long-term – usually a period of 10 y or more – happiness does not increase as a country's income rises. Heretofore the evidence for this was limited to developed countries. This article presents evidence that the long term nil relationship between happiness and income holds also for a number of developing countries, the eastern European countries transitioning from socialism to capitalism, and an even wider sample of developed countries than previously studied. It also finds that in the short-term in all three groups of countries, happiness and income go together, i.e., happiness tends to fall in economic contractions and rise in expansions. Recent critiques of the paradox, claiming the time series relationship between happiness and income is positive, are the result either of a statistical artifact or a confusion of the short-term relationship with the long-term one.

Keywords: Easterlin Paradox; life satisfaction; subjective well-being (search for similar items in EconPapers)
JEL-codes: D60 I31 O10 O5 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-06
New Economics Papers: this item is included in nep-hap, nep-hpe and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published - published in: Proceedings of the National Academy of Sciences, 2010, 107 (52), 22463-22468

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