TY  - JOUR
AU  - Stevenson,Betsey
AU  - Wolfers,Justin
TI  - Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14282
PY  - 2008
Y2  - August 2008
UR  - http://www.nber.org/papers/w14282
L1  - http://www.nber.org/papers/w14282.pdf
N1  - Author contact info:
Betsey Stevenson
The Wharton School
University of Pennsylvania
1454 Steinberg - Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104
Tel: 215/898-3019
Fax: 215/898-7635
E-Mail: betseys@wharton.upenn.edu

Justin Wolfers
Business and Public Policy Department
Wharton School, University of Pennsylvania
3620 Locust Walk
Room 1456 Steinberg-Deitrich Hall
Philadelphia, PA 19104-6372
Tel: (215) 898-3013
Fax: (215) 898-7635
E-Mail: jwolfers@wharton.upenn.edu
AB  - 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.
ER  -