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Happiness and Growth the World Over: Time Series Evidence on the Happiness-Income Paradox

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  • Easterlin, Richard A.

    ()
    (University of Southern California)

  • Angelescu McVey, Laura

    ()
    (University of Southern California)

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    Abstract

    There is no significant relationship between the improvement in happiness and the long term rate of growth of GDP per capita. This is true for three groups of countries analyzed separately − 17 developed, 9 developing, and 11 transition − and also for the 37 countries taken together. Time series studies reporting a positive relationship confuse a short-term positive association between the growth of happiness and income, arising from fluctuations in macroeconomic conditions, with the long-term relationship, which is nil.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4060.

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    Length: 31 pages
    Date of creation: Mar 2009
    Date of revision:
    Publication status: published in: R.A. Easterlin, Happiness, Growth, and the Life Cycle, Chapter 5, Oxford University Press, 2011
    Handle: RePEc:iza:izadps:dp4060

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    Keywords: happiness; economic growth; developing countries; transition countries; developed countries;

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    References

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    1. Stevenson, Betsey & Wolfers, Justin, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," IZA Discussion Papers 3654, Institute for the Study of Labor (IZA).
    2. Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
    3. David Cutler & Angus Deaton & Adriana Lleras-Muney, 2005. "The Determinants of Mortality," Working Papers 235, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    4. Daniel Kahneman, 2003. "A Psychological Perspective on Economics," American Economic Review, American Economic Association, vol. 93(2), pages 162-168, May.
    5. Rafael Di Tella & Robert MacCulloch, 2005. "Gross National Happiness as an Answer to the Easterlin Paradox?," Macroeconomics 0504027, EconWPA.
    6. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    7. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
    8. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    9. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
    10. Easterlin, Richard A., 2009. "Lost in transition: Life satisfaction on the road to capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 130-145, August.
    11. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
    12. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
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    Cited by:
    1. Clark, Andrew E. & Flèche, Sarah & Senik, Claudia, 2012. "The Great Happiness Moderation," IZA Discussion Papers 6761, Institute for the Study of Labor (IZA).
    2. Stefano Bartolini & Ennio Bilancini, 2010. "If not only GDP, what else? Using relational goods to predict the trends of subjective well-being," International Review of Economics, Springer, vol. 57(2), pages 199-213, June.
    3. David Bartram, 2011. "Economic Migration and Happiness: Comparing Immigrants’ and Natives’ Happiness Gains From Income," Social Indicators Research, Springer, vol. 103(1), pages 57-76, August.
    4. repec:hal:wpaper:halshs-00707290 is not listed on IDEAS
    5. Jiri Zuzanek, 2013. "Does Being Well-Off Make Us Happier? Problems of Measurement," Journal of Happiness Studies, Springer, vol. 14(3), pages 795-815, June.
    6. Corazzini, Luca & Esposito, Lucio & Majorano, Francesca, 2012. "Reign in hell or serve in heaven? A cross-country journey into the relative vs absolute perceptions of wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 81(3), pages 715-730.
    7. Veenhoven, Ruut & Vergunst, Floris, 2013. "The Easterlin illusion: economic growth does go with greater happiness," MPRA Paper 43983, University Library of Munich, Germany.
    8. BARTOLINI Stefano & SARRACINO Francesco, 2011. "Happy for How Long? How Social Capital and GDP relate to Happiness over Time," CEPS/INSTEAD Working Paper Series 2011-60, CEPS/INSTEAD.
    9. Maurizio Pugno, 2011. "Scitovsky and the income-happiness paradox," Working Papers 2011-07, Universita' di Cassino, Dipartimento di Scienze Economiche.
    10. Pablo Gluzmann, 2013. "Bienestar subjetivo y crecimiento económico: analizando la paradoja del crecimiento infeliz en la Encuesta Mundial Gallup," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 231-258, January-D.
    11. Leonardo Becchetti & Fabio Pisani, 2014. "Family Economic Well-Being, and (Class) Relative Wealth: An Empirical Analysis of Life Satisfaction of Secondary School Students in Three Italian Cities," Journal of Happiness Studies, Springer, vol. 15(3), pages 503-525, June.

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