Easterlin et al., “The happiness–income paradox” also in Latin American and eastern European countries

“The striking thing about the happiness–income paradox is that over the long-term —usually a period of 10 year or more—happiness does not increase as a country’s income rises. The evidence for this was not limited only to developed countries, but also for a number of developing countries, the eastern European countries transitioning from socialism to capitalism, and an even wider sample of developed countries, as studied by Richard A. Easterlin (University of Southern California, Los Angeles, CA) et al. and published in PNAS.” Richard A. Easterlin, Laura Angelescu McVey, Malgorzata Switek, Onnicha Sawangfa, and Jacqueline Smith Zweig, “The happiness–income paradox revisited,” PNAS Published online before print December 13, 2010.

“A nil relationship between SWB and GDP is contrary to economists’ usual expectation that growth and well-being would be positively related and also to what one would expect from point-of-time cross-section studies. Easterlin’s happiness–income paradox, first reported for the United States almost four decades ago, has been gradually broadening to include Japan and 9 developed countries of Europe in 1995, and now, in 2010 to 17 Latin American countries, 17 developed countries, 11 Eastern European countries transitioning from socialism to capitalism, and 9 less developed countries scattered across Asia, Latin America, and Africa, including some with quite low growth rates and some with the highest rates of economic growth ever observed. Hence, the happiness–income paradox now holds for countries ranging from poor to rich: among countries, at a point in time happiness and income are positively related, but over time within a country, happiness does not increase as income goes up.

How happiness is measured? By means of using “life satisfaction (LS) and financial satisfaction (FS), both encompass in the term subjective well-being (SWB). Theses measurements has been related to income change, the annual rate of change in real gross domestic product (GDP) per capita.”

It is important to recall from Easterlin’s paper that “the reasons for the paradoxical happiness–income relation in the long run, and why the short-term relationship is positive are beyond the scope of the article. If economic growth is not the main route to greater happiness, what is? A simple, but unhelpful answer, is that more research is needed.”

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