IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9676.html
   My bibliography  Save this paper

Paradox Lost?

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9676.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)happiness in Transition," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 143-168, Spring.
    2. 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.
    3. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    4. Betsey Stevenson & Justin Wolfers, 2009. "The Paradox of Declining Female Happiness," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 190-225, August.
    5. Bartolini, Stefano & Sarracino, Francesco, 2014. "Happy for how long? How social capital and economic growth relate to happiness over time," Ecological Economics, Elsevier, vol. 108(C), pages 242-256.
    6. Justin Wolfers, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well‐Being," International Finance, Wiley Blackwell, vol. 6(1), pages 1-26, March.
    7. 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.
    8. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634.
    9. Derek Bok, 2010. "The Politics of Happiness: What Government Can Learn from the New Research on Well-Being," Economics Books, Princeton University Press, edition 1, number 9107.
    10. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
    11. 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.
    12. Ruut Veenhoven & Floris Vergunst, 2014. "The Easterlin illusion: economic growth does go with greater happiness," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 1(4), pages 311-343.
    13. 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.
    14. 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.
    15. Jan Svejnar, 2002. "Transition Economies: Performance and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 3-28, Winter.
    16. 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.
    17. 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).
    18. David, Paul A. & Reder, Melvin W. (ed.), 1974. "Nations and Households in Economic Growth," Elsevier Monographs, Elsevier, edition 1, number 9780122050503.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    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

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    3. Nikolova, Milena, 2016. "Happiness and Development," IZA Discussion Papers 10088, Institute of Labor Economics (IZA).
    4. Karen Maguire & John V. Winters, 2016. "Energy Boom and Gloom? Local Effects of Oil and Natural Gas Drilling on Subjective Well-Being," Economics Working Paper Series 1607, Oklahoma State University, Department of Economics and Legal Studies in Business.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sarracino, Francesco & O'Connor, Kelsey J. & Ono, Hiroshi, 2019. "Making economic growth and well-being compatible: evidence from Japan," MPRA Paper 93010, University Library of Munich, Germany.
    2. Kaiser, Caspar F. & Vendrik, Martinus, 2018. "Different versions of the Easterlin Paradox: New evidence for European countries," Research Memorandum 026, Maastricht University, Graduate School of Business and Economics (GSBE).
    3. Easterlin, Richard A. & Angelescu McVey, Laura & Switek, Malgorzata & Sawangfa, Onnicha & Zweig, Jacqueline Smith, 2011. "The Happiness-Income Paradox Revisited," IZA Discussion Papers 5799, Institute of Labor Economics (IZA).
    4. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
    5. Francesco Sarracino & Kelsey J. O’Connor, 2021. "Economic growth and well-being beyond the Easterlin paradox," Chapters, in: Luigino Bruni & Alessandra Smerilli & Dalila De Rosa (ed.), A Modern Guide to the Economics of Happiness, chapter 9, pages 162-188, Edward Elgar Publishing.
    6. Bert Van Landeghem, 2012. "Panel Conditioning and Self-Reported Satisfaction: Evidence from International Panel Data and Repeated Cross-Sections," SOEPpapers on Multidisciplinary Panel Data Research 484, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Rok Spruk & Aleskandar Kešeljević, 2016. "Institutional Origins of Subjective Well-Being: Estimating the Effects of Economic Freedom on National Happiness," Journal of Happiness Studies, Springer, vol. 17(2), pages 659-712, April.
    8. Stefano Bartolini & Małgorzata Mikucka & Francesco Sarracino, 2017. "Money, Trust and Happiness in Transition Countries: Evidence from Time Series," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(1), pages 87-106, January.
    9. Sacks, Daniel W. & Stevenson, Betsey & Wolfers, Justin, 2010. "Subjective Well-Being, Income, Economic Development and Growth," CEPR Discussion Papers 8048, C.E.P.R. Discussion Papers.
    10. Stefano Bartolini & Francesco Sarracino, 2021. "Happier and Sustainable. Possibilities for a post-growth society," Department of Economics University of Siena 855, Department of Economics, University of Siena.
    11. Djankov, Simeon & Nikolova, Elena & Zilinsky, Jan, 2016. "The happiness gap in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 108-124.
    12. Adam Okulicz-Kozaryn & Joan Maya Mazelis, 2017. "More Unequal in Income, More Unequal in Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 953-975, July.
    13. Gregor Gonza & Anže Burger, 2017. "Subjective Well-Being During the 2008 Economic Crisis: Identification of Mediating and Moderating Factors," Journal of Happiness Studies, Springer, vol. 18(6), pages 1763-1797, December.
    14. Tonzer Lena, 2019. "Elevated Uncertainty during the Financial Crisis: Do Effects on Subjective Well-Being Differ across European Countries?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-15, April.
    15. Easterlin, Richard A. & O’Connor, Kelsey J., 2020. "The Easterlin Paradox," GLO Discussion Paper Series 743, Global Labor Organization (GLO).
    16. Jiayuan Li & John Raine, 2014. "The Time Trend of Life Satisfaction in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(2), pages 409-427, April.
    17. Francesco Sarracino & Małgorzata Mikucka, 2019. "Consume More, Work Longer, and Be Unhappy: Possible Social Roots of Economic Crisis?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 14(1), pages 59-84, March.
    18. Tonzer, Lena, 2017. "Uncertainty, financial crises, and subjective well-being," IWH Discussion Papers 2/2017, Halle Institute for Economic Research (IWH).
    19. Michiel Slag & Martijn J. Burger & Ruut Veenhoven, 2019. "Did the Easterlin Paradox apply in South Korea between 1980 and 2015? A case study," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 325-351, December.
    20. Alpaslan Akay & Olivier Bargain & Klaus F. Zimmermann, 2017. "Home Sweet Home?: Macroeconomic Conditions in Home Countries and the Well-Being of Migrants," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 351-373.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp9676. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.