Economic growth and happiness

There is an extensive body of literature showing the weak relationship between people’s incomes and their self-reported happiness or well-being, especially at higher levels of income. A person’s income relative to others seems to be more important to them than their absolute income level. The lack of correlation between average incomes in the USA and the proportion of Americans who describe themselves as ‘very happy’ is similar to the pattern that comes from a comparison of incomes and the Genuine Progress Indicator (GPI). The GPI was designed to adjust GDP to make it a more valid measure of well-being. HappyGrow, a theoretical simulation model in which goods provide different combinations of status and use, is described. When status is zero sum, economic growth, which brings increasing consumption of status goods, adds little or nothing to overall well-being.