Easterlin Paradox

An Easterlin Paradox is a paradox in Happiness Economics that high incomes do correlate with happiness, but long term, increased income doesn't correlate with increased happiness.

• See: Richard Easterlin, GDP, Gross National Happiness.

---

---

References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Easterlin_paradox Retrieved:2014-4-10.
  • The Easterlin Paradox is a key concept in happiness economics. It is named for the economist and USC professor Richard Easterlin, who discussed the factors contributing to happiness in a 1974 book chapter. According to the University of Kent, the paradox explains that, "high incomes do correlate with happiness, but long term, increased income doesn't correlate with increased happiness".

    Easterlin found that within a given country people with higher incomes were more likely to report being happy. However, in international comparisons, the average reported level of happiness did not vary much with national income per person, at least for countries with income sufficient to meet basic needs. Similarly, although income per person rose steadily in the United States between 1946 and 1970, average reported happiness showed no long-term trend and declined between 1960 and 1970. The difference in international and micro-level results fostered an ongoing body of research. Recent research has utilised several measures of happiness, including biological measures , showing similar patterns of results . This goes some way to answering the problems of self-rated happiness . The claim was later taken up by Andrew Oswald of the University of Warwick in 1997, driving media interest in the topic.

    If true (see below), one possible implication for government policy is said to be that, once basic needs are met, policy should focus not on economic growth or GDP, but rather on increasing life satisfaction or Gross national happiness (GNH).

---