Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26439 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2394
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The Easterlin paradox” suggests that there is no link between a society's economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.
Subjects: 
Happiness
subjective well-being
Easterlin Paradox
life satisfaction
economic growth
well-being-income gradient
hedonic treadmill
JEL: 
D6
I3
J1
Document Type: 
Working Paper
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