Skip to main content
SpringerLink
Log in

The Income — Happiness Relationship

  • Chapter
Rich and Poor

Part of the book series: Social Indicators Research Series ((SINS,volume 15))

Abstract

Early in the life cycle material preferences or aspirations are fairly similar among income groups, and those with more income consequently have higher utility, and are happier. Over the life cycle material aspirations rise in proportion to income, undercutting the favorable effect of income growth on utility. The cross sectional difference in happiness by level of income persists,but for any given status group happiness remains constant over the life cycle.

When assessing the past or future, people take their aspirations to be the same as currently, and, because income rises over the life cycle, they think they were less happy in the past and will be happier in the future. But aspirations actually vary together with income, and experienced utility turns out to be constant and systematically different from utility expectations, on which choices are based.

“Life is a progress from want to want, not from enjoyment to enjoyment.” (Samuel Johnson, 1776)

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Andrews, F.M. (ed.) (1986): Research on the Quality of Life. Ann Arbor, MI: Survey Research Center, Institute for Social Research, University of Michigan.

    Google Scholar 

  • Andrews, F.M. & S.B. Withey (1976): Developing Measures of Perceived Life Quality: Results from Several National Surveys. Social Indicators Research 1, 1–26.

    Article  Google Scholar 

  • Argyle, M. (1999): Causes and Correlates of Happiness. In Kahneman, D., E. Diener & N. Schwarz (eds.): Well-Being: The Foundations of Hedonic Psychology, New York: Russell Sage Foundation, 353–373.

    Google Scholar 

  • Ashenfelter, O. & C. Rouse (1999): Schooling, Intelligence, and Income in America: Cracks in the Bell Curve. National Bureau of Economic Research, Working Paper No. 6902.

    Google Scholar 

  • Bachman, J.G., L.D. Johnston & P.M. O’Malley (1980): Monitoring the Future: Questionnaire Responses from the Nation’s High School Seniors, 1976. Ann Arbor, MI: Survey Research Center, Institute for Social Research.

    Google Scholar 

  • Blanchflower, D.G. & A.J. Oswald (1999). Well-Being over Time in Britain and the USA. Unpublished Manuscript, November.

    Google Scholar 

  • Brickman, P. & D.T. Campbell (1971): Hedonic Relativism and Planning the Good Society. In Appley, M.H. (ed.): Adaptation Level Theory: A Symposium, New York: Academic Press.

    Google Scholar 

  • Campbell, A. (1981): The Sense of Well-Being in America. New York: McGraw-Hill.

    Google Scholar 

  • Campbell, A., P.E. Converse & W.L. Rodgers (1976): The Quality of American Life: Perceptions, Evaluations, and Satisfactions. New York: Russell Sage.

    Google Scholar 

  • Cantril, H. (1965): The Pattern of Human Concerns. New Brunswick, NJ: Rutgers University Press.

    Google Scholar 

  • Costa, P.T. Jr., A.B. Zonderman, R.R. McCrae, J. Cornoni-Huntley, B.Z. Locke & H.E. Barbano (1987):Longitudinal Analyses of Psychological Well-Being in a National Sample: Stability of Mean Levels.Journal of Gerontology 42 (1), 50–55.

    Article  Google Scholar 

  • de la Croix, D. (1998): Growth and the Relativity of Satisfaction. Mathematical Social Sciences 36, 105–125.

    Article  Google Scholar 

  • Diener, E. (1984): Subjective Well-being. Psychological Bulletin 95 (3), 542–575.

    Article  Google Scholar 

  • Diener, E. & R.E. Lucas (1999). Personality and Subjective Well-being. In Kahneman, D., E. Diener & N. Schwarz (eds.): Well-Being: The Foundations of Hedonic Psychology, New York: Russell Sage Foundation, 213–229.

    Google Scholar 

  • Diener, E. & S. Oshi (2000): Money and Happiness: Income and Subjective Well-being across Nations. In Diener, E. & E.M. Suh (eds.): Subjective Well-Being Across Cultures. Cambridge, Mass.: MIT Press.

    Google Scholar 

  • Duesenberry, J.S. (1949): Income, Savings, and the Theory of Consumer Behaviour. Cambridge, Mass.: Harvard University Press.

    Google Scholar 

  • Durkheim, E. (1952) [1930]: Suicide: A Study in Sociology. New York: Free Press.

    Google Scholar 

  • Easterlin, R.A. (1974): Does Economic Growth Improve the Human Lot? In David, P.A. & M.W. Reder (eds.): Nations and Households in Economic Growth: Essays in Honour of Moses Abramovitz. New York: Academic Press Inc.

    Google Scholar 

  • Easterlin, R.A. (1987): Birth and Fortune: The Impact of Numbers on Personal Welfare. 2nd Edition, Chicago: University of Chicago Press.

    Google Scholar 

  • Easterlin, R.A. (1995): Will Raising the Incomes of All Increase the Happiness of All? Journal of Economic Behavior and Organization 27, 35–47.

    Article  Google Scholar 

  • Easterlin, R.A. (2001): Income and Happiness: Towards a Unified Theory. Economic Journal 111 (473), 465–484.

    Article  Google Scholar 

  • Easterlin, R.A. & C.M. Schaeffer (1999): Income and Subjective Well-being over the Life Cycle. In Ryff, C.D. & V.W. Marshall (eds.): The Self and Society in Aging Processes. New York: Springer, 279–301.

    Google Scholar 

  • Emerson, R.W. (1860): Wealth. In Emerson, R.W.: The Conduct of Life, Boston: Ticknor and Fields.

    Google Scholar 

  • Frank, R.H. (1985): The Demand for Unobservable and Other Nonpositional Goods. American Economic Review 75, 279–301.

    Google Scholar 

  • Frank, R.H. (1997): The Frame of Reference as a Public Good. The Economic Journal 107, 1832–1847.

    Article  Google Scholar 

  • Frey, B.S. & A. Stutzer (1999): Measuring Preferences by Subjective Well-Being. Journal of Institutional and Theoretical Economics 155, 1–24.

    Google Scholar 

  • George, L.K. (1992): Economic Status and Subjective Well-being: A Review of the Literature and an Agenda for Future Research. In Cutter, N.E., D.W. Grigg & M. Powell Lawton (eds)• Aging, Money, and Life Satisfaction: Aspects of Financial Gerontology. New York: Springer Publishing Co.

    Google Scholar 

  • Herzog, A.R., W.L. Rodgers & J. Woodworth (1982): Subjective Well-Being Among Different Age Groups. Ann Arbor, MI: Institute for Social Research, University of Michigan.

    Google Scholar 

  • Hirsch, F. (1976): Social Limits to Growth. Cambridge, Mass: Harvard University Press.

    Google Scholar 

  • Kahneman, D. (1999): Objective Happiness. In Kahneman, D., E. Diener & N. Schwarz (eds.): Well-Being: The Foundations of Hedonic Psychology. New York: Russell Sage Foundation, 3–25.

    Google Scholar 

  • Kahneman, D. & J. Snell (1992): Predicting Taste Change: Do People Know What They Will Like, Journal of Behavioral Decision-Making 5, 187–200.

    Article  Google Scholar 

  • Kahneman, D., P.P. Wakker & R. Sarin (1997): Back to Bentham? Explorations of Experienced Utility. Quarterly Journal of Economics 12 (2), 375–405.

    Article  Google Scholar 

  • Kenny, C. (1999): Does Growth Cause Happiness or Does Happiness Cause Growth? Kyklos 52 (1), 3–26.

    Article  Google Scholar 

  • Leibenstein, H. (1976): Beyond Economic Man. New York: Harvard University Press.

    Google Scholar 

  • Lipset, S.M. & W. Schneider (1987): The Confidence Gap: Business, Labor, and Government in the Public Mind, Revised Edition. Baltimore, MD: Johns Hopkins University Press.

    Google Scholar 

  • Loewenstein, G. & D. Schkade (1999): Wouldn’t It Be Nice? Predicting Future Feelings. In Kahneman, D., E. Diener & N. Schwarz (eds.): Well-Being.The Foundations of Hedonic Psychology, New York: Russell Sage Foundation, 85–105.

    Google Scholar 

  • Lykken, D. & A. Tellegen (1996): Happiness Is a Stochastic Phenomenon. Psychological Science 7 (3), 180–189.

    Article  Google Scholar 

  • March, J.G. & H.A. Simon (1968): Organizations. New York: John Wiley.

    Google Scholar 

  • Markus, G.B. (1986): Stability and Change in Political Attitudes: Observed, Recalled, and Explained. Political Behavior, 8 (1), 21–44.

    Article  Google Scholar 

  • McLanahan, S. & A.B. Sorensen (1985): Life Events and Psychological Well-being over the Life Course. In Elder, G.H. jr. (ed.): Life Course Dynamics: Trajectories and Transitions, 1968–1980. Ithaca, NY: Cornell University Press, 217–238.

    Google Scholar 

  • Michalos, A.C. (1986): Job Satisfaction, Marital Satisfaction, and the Quality of Life: A Review and a Preview. In Andrews, F.M. (ed.): Research on the Quality of Life. Ann Arbor, MI: Survey Research Center, Institute for Social Research, University of Michigan, 57–83.

    Google Scholar 

  • Michalos, A.C. (1991): Global Report on Student Well-Being: Vol. I: Life Satisfactions and Happiness. New York: Springer-Verlag.

    Google Scholar 

  • Modigliani, F. (1949): Fluctuations in the Saving-income Ratio: A Problem in Economic Forecasting. Conference on Research in Income and Wealth: Studies in Income and Wealth, Vol. XI, New York: National Bureau of Economic Research, 371–443.

    Google Scholar 

  • Mroczek, D.K. & C.M. Kolarz (1998): The Effect of Age on Positive and Negative Affect: A Develop-mental Perspective on Happiness. Journal of Personality and Social Psychology 75 (5), 1333–1349.

    Article  Google Scholar 

  • Myers, D.G. (1992): The Pursuit of Happiness. Who Is Happy and Why. New York: MacMillan.

    Google Scholar 

  • National Opinion Research Center (1999): General Social Surveys, 1972–1998:

    Google Scholar 

  • Olson, J.M., C.P. Herman & M.P. Zanna (eds.) (1986): Relative Deprivation and Social Comparison. The Ontario Symposium Vol. 4, Hillsdale, NJ: Erlbaum.

    Google Scholar 

  • Oswald, A.J. (1997): Happiness and Economic Performance: The Economic Journal 107, 1815–1831.

    Article  Google Scholar 

  • Rabin, M. (1998): Psychology and Economics. Journal of Economic Literature 36, 11–46.

    Google Scholar 

  • Rainwater, L. (1994): Family Equivalence as a Social Construction. In Ekert-Jaffe, O. (ed.): Standards ofLiving and Families.Observation and Analysis, Montrouge, France: John Libbey Eurotext, 23–39.

    Google Scholar 

  • Ramsey, F. (1928): A Mathematical Theory of Savings. Economic Journal 38, 543–559.

    Article  Google Scholar 

  • Roper-Starch Organization (1979): Roper Reports 79-I. Storrs, CT: University of Connecticut, The Roper Center.

    Google Scholar 

  • Schwarz, N. & F. Strack (1999): Reports of Subjective Well-being: Judgmental Processes and their Methodological Implications. In Kahneman, D., E. Diener & N. Schwarz (eds.): Well-Being: The Foundations of Hedonic Psychology, New York: Russell Sage Foundation, 61–84.

    Google Scholar 

  • Tversky, A. & D. Griffin (1991): Endowment and Contrast in Judgments of Well-being. In Strack, F., M. Argyle & N. Schwarz (eds.): Subjective Well-Being: An Interdisciplinary Perspective. Oxford: Pergamon Press, 101–118.

    Google Scholar 

  • Veenhoven, R. (1993): Happiness in Nations, Subjective Appreciation of Life in 56 Nations 1946–1992. Rotterdam, Netherlands: Erasmus University.

    Google Scholar 

  • Veroff, J., E. Douvan & R.A. Kulka (1981): The Inner American: A Self-Portrait from 1957 to 1976. New York: Basic Books.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Southern California, USA

    Richard A. Easterlin

Authors
  1. Richard A. Easterlin
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Johann Wolfgang Goethe-Universität, Frankfurt am Main, Germany

    Wolfgang Glatzer

Rights and permissions

Reprints and permissions

Copyright information

© 2002 Springer Science+Business Media Dordrecht

About this chapter

Cite this chapter

Easterlin, R.A. (2002). The Income — Happiness Relationship. In: Glatzer, W. (eds) Rich and Poor. Social Indicators Research Series, vol 15. Springer, Dordrecht. https://doi.org/10.1007/978-94-010-0257-8_11

Download citation

  • DOI: https://doi.org/10.1007/978-94-010-0257-8_11

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-3954-3

  • Online ISBN: 978-94-010-0257-8

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation