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Paradox Lost?

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  • Easterlin, Richard A.

    (University of Southern California)

Abstract

Or Paradox Regained? The answer is Paradox Regained. New data confirm that for countries worldwide long-term trends in happiness and real GDP per capita are not significantly positively related. The principal reason that Paradox critics reach a different conclusion, aside from problems of data comparability, is that they do not focus on identifying long-term trends in happiness. For some countries their estimated growth rates of happiness and GDP are not trend rates, but those observed in cyclical expansion or contraction. Mixing these short-term with long-term growth rates shifts a happiness-GDP regression from a horizontal to positive slope.

Suggested Citation

  • Easterlin, Richard A., 2016. "Paradox Lost?," IZA Discussion Papers 9676, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9676
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    References listed on IDEAS

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    7. Jan-Emmanuel De Neve & George Ward & Femke De Keulenaer & Bert Van Landeghem & Georgios Kavetsos & Michael I. Norton, 2018. "The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence Using Subjective Well-Being Data," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 362-375, May.
    8. 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.
    9. Helliwell, John & Layard, Richard & Sachs, Jeffrey, 2012. "World happiness report," LSE Research Online Documents on Economics 47487, London School of Economics and Political Science, LSE Library.
    10. Edsel Beja, 2014. "Income growth and happiness: reassessment of the Easterlin Paradox," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(4), pages 329-346, December.
    11. Jan Svejnar, 2002. "Transition Economies: Performance and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 3-28, Winter.
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    13. Easterlin, Richard A. & Morgan, Robson & Switek, Malgorzata & Wang, Fei, 2013. "China's Life Satisfaction, 1990-2010," IZA Discussion Papers 7196, Institute of Labor Economics (IZA).
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Paradox Lost?
      by maximorossi in NEP-LTV blog on 2016-02-19 01:06:22

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    Cited by:

    1. Neila Ben Afia and Sana Harbi, 2017. "Empirical Analysis of the Relationship between Military Endeavor, Economic Growth and Happiness," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(2), pages 51-66, June.
    2. Maguire, Karen & Winters, John V., 2016. "Energy Boom and Gloom? Local Effects of Oil and Natural Gas Drilling on Subjective Well-Being," IZA Discussion Papers 9811, Institute of Labor Economics (IZA).
    3. Nikolova, Milena, 2016. "Happiness and Development," IZA Discussion Papers 10088, Institute of Labor Economics (IZA).
    4. Obschonka, Martin & Stuetzer, Michael & Peter, Rentfrow & Jeff, Potter & Samuel, Gosling, 2017. "Did Strategic Bombing in the Second World War lead to ‘German Angst’? A large-scale empirical test across 89 German cities," MPRA Paper 83680, University Library of Munich, Germany.

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    More about this item

    Keywords

    Easterlin Paradox; economic growth; income; happiness; life satisfaction; subjective well-being; transition countries; less developed nations; developed countries; long-term; short-term; trends; fluctuations;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D60 - Microeconomics - - Welfare Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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