Skip to main content
SpringerLink
Log in

Happiness and Economic Growth – The Evidence

  • Chapter
  • First Online:
Global Handbook of Quality of Life

Part of the book series: International Handbooks of Quality-of-Life ((IHQL))

Abstract

Long term trends in happiness and income are not related; short term fluctuations in happiness and income are positively associated. Evidence for this is found in time series data for developed countries, transition countries, and less developed countries, whether analyzed separately or pooled. Skeptics, who claim that the long term time series trend relationship is positive, are mistaking the short term association for the long term one, or are misguided by a statistical artifact. Some analysts assert that in less developed countries happiness and economic growth are positively related “up to some point,” beyond which the association tends to become nil, but time series data do not support this view. The most striking contradiction is China where, despite a fourfold multiplication in two decades in real GDP per capita from a low initial level, life satisfaction has not improved.

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 389.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 499.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 499.99
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

References

  • Arrow, K. J., & Dasgupta, P. S. (2009). Conspicuous consumption, inconspicuous leisure. The Economic Journal, 119(541), F500–F513.

    Article  Google Scholar 

  • Belson, W. A. (1966). The effects of reversing the presentation order of verbal rating scales. Journal of Advertising Research, 6(4), 30–37.

    Google Scholar 

  • Bok, D. (2010). The politics of happiness: What government can learn from the new research on well-being. New Jersey: Princeton University Press.

    Google Scholar 

  • Chan, J. C. (1991). Response-order effects in Likert-type scales. Educational and Psychological Measurement, 51(3), 531–540.

    Article  Google Scholar 

  • Chinese Academy of Social Sciences. (2011). Blue book of China’s society: Society of China analysis and forecast. China: Social Sciences Academic Press (in Chinese).

    Google Scholar 

  • Clark, A. E., Frijters, P., & Shields, M. A. (2008). Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.

    Article  Google Scholar 

  • Deaton, A. (2008). Income, health, and well-being around the world: Evidence from the Gallup World Poll. Journal of Economic Perspectives, 22(2), 53–72.

    Article  Google Scholar 

  • Deaton, A. (2011). The financial crisis and well-being of Americans. NBER Working Paper Series. National Bureau of Economic Research, Inc., 17128.

    Google Scholar 

  • Diener, E., Ng, W., Harter, J., & Arora, R. (2010). Wealth and happiness across the world: Material prosperity predicts life evaluation, whereas psychosocial prosperity predicts positive feeling. Journal of Personality and Social Psychology, 99, 52–61.

    Article  Google Scholar 

  • Diener, E., Tay, L., & Oishi, S. (2012). Rising income and the subjective well-being of nations. Journal of Personality and Social Psychology, 104(2), 267–276. doi:10.1037/a0030487.

    Article  Google Scholar 

  • DiTella, R., MacCulloch, R. J., & Oswald, A. J. (2001). Preferences over inflation and unemployment: Evidence from surveys of happiness. American Economic Review, 91(1), 335–341.

    Article  Google Scholar 

  • Easterlin, R. A. (1974). Does economic growth improve the human lot? In P. A. David & M. S. Reder (Eds.), Essays in honour of Moses Abramovitz (pp. 89–125). Massachusetts: Academic.

    Google Scholar 

  • Easterlin, R. A. (2005a). Diminishing marginal utility of income? Caveat Emptor. Social Indicators Research, 70(3), 243–255.

    Article  Google Scholar 

  • Easterlin, R. A. (2005b). Feeding the illusion of growth and happiness: A reply to Hagerty and Veenhonven. Social Indicators Research, 74(3), 429–443.

    Article  Google Scholar 

  • Easterlin, R. A. (2009). Lost in transition: Life satisfaction on the road to capitalism. Journal of Economic Behavior and Organization, 71(2), 130–145.

    Article  Google Scholar 

  • Easterlin, R. A. (2010). Happiness, growth, and the life cycle. New York: Oxford University Press.

    Google Scholar 

  • Easterlin, R. A. (2013). Happiness, growth and public policy. Economic Inquiry, 51(1), 1–15.

    Article  Google Scholar 

  • Easterlin, R. A., & Plagnol, A. (2008). Life satisfaction and economic conditions in East and West Germany pre- and post-unification. Journal of Economic Behavior & Organization, 68(3), 433–444.

    Article  Google Scholar 

  • Easterlin, R. A., & Sawangfa, O. (2010). Happiness and economic growth: Does the cross section predict time trends? Evidence from Developing Countries. In E. Diener, J. F. Helliwell, & D. Kahneman (Eds.), International differences in well-being (Appendixes B and C). New York: Oxford University Press.

    Google Scholar 

  • Easterlin, R. A., McVey, L. A., Switek, M., Sawangfa, O., & Zweig, J. S. (2010). The happiness-income paradox revisited. Proceedings of the National Academy of Sciences, 107, 22463–22468.

    Google Scholar 

  • Easterlin, R. A., Morgan, R., Switek, M., & Wang, F. (2012). China’s life satisfaction, 1990–2010. Proceedings of the National Academy of Sciences, 109(25), 9775–9780.

    Article  Google Scholar 

  • Frey, B. S., & Stutzer, A. (2002). Happiness and economics: How the economy and institutions affect well-being. New Jersey: Princeton University Press.

    Google Scholar 

  • Frijters, P., Haisken-DenNew, J. P., & Shields, M. A. (2004). Money does matter! Evidence from increasing income and life satisfaction in East Germany following reunification. American Economic Review, 94(3), 730–740.

    Article  Google Scholar 

  • Guriev, S., & Zhuravskaya, E. (2009). (Un)happiness in transition. Journal of Economic Perspectives, 22(2), 152.

    Google Scholar 

  • Hagerty, M. R., & Veenhoven, R. (2003). Wealth and happiness revisited – Growing national income does go with greater happiness. Social Indicators Research, 64(1), 1–27.

    Article  Google Scholar 

  • Hagerty, M. R., & Veenhoven, R. (2006). Rising happiness in nations 1946–2004: A reply to Easterlin. Social Indicators Research, 79(3), 421–436.

    Article  Google Scholar 

  • Helliwell, J. R., Layard, R., & Sachs, J. (2012). World happiness report. New York: United Nations.

    Google Scholar 

  • Heston, A., Summers, R., & Aten, B. (2012). Penn world table version 7.0. Center for International Comparisons of Production, University of Pennsylvania. https://pwt.sas.upenn.edu/php_site/pwt_index.php

  • Inglehart, R. F. (2002). Globalization and postmodern values. The Washington Quarterly, 23(1), 215–228.

    Article  Google Scholar 

  • Inglehart, R., Foa, R., Peterson, C., & Wetzel, C. (2008). Development, freedom, and rising happiness: A global perspective (1981–2007). Perspectives on Psychological Science, 3(4), 264–285.

    Article  Google Scholar 

  • Layard, R. (2005). Happiness: Lessons from a new science. London: Penguin Press.

    Google Scholar 

  • Møller, V. (2007). Researching quality of life in a developing country: Lessons from the South African case. In I. Gough & J. A. McGregor (Eds.), Wellbeing in developing countries: From theory to research (pp. 242–258). Cambridge: Cambridge University Press.

    Google Scholar 

  • NORC. (2013). General social survey. Available at: http://www3.norc.org/GSS+Website/

  • OECD. (2010a). China in the 2010s: Rebalancing growth and strengthening social safety nets. Beijing: OECD.

    Google Scholar 

  • OECD. (2010b). OECD economic surveys: China (Vol. 2010/6). Beijing: OECD.

    Google Scholar 

  • Oswald, A. J. (1997). Happiness and economic performance. The Economic Journal, 107(445), 1815–1831.

    Article  Google Scholar 

  • Sachs, D. W., Stevenson, B., & Wolfers, J. (2012). Subjective well-being, income, economic development, and growth. In P. Booth (Ed.) …and the pursuit of happiness: Well-being and the role of government. London: The Institute of Economic Affairs.

    Google Scholar 

  • Sanfey, P., & Teksoz, U. (2007). Does transition make you happy? Economics of Transition, 15(4), 707–731.

    Article  Google Scholar 

  • Schuman, H., & Presser, S. (1981). Questions and answers in attitude surveys: Experiments on question form, wording and context. Massachusetts: Academic.

    Google Scholar 

  • Stevenson, B., & Wolfers, J. (2008). Economic growth and subjective well-being: Reassessing the Easterlin paradox. Brookings Papers on Economic Activity, 2008(Spring), 1–87.

    Article  Google Scholar 

  • Stiglitz, J. E., Sen, A., & Fitoussi, J. P. (2009). Report of the commission on the measurement of economic performance and social progress. http://www.stiglitz-sen-fitoussi.fr/en/index.htm

  • Veenhoven, R. (1991). Is happiness relative? Social Indicators Research, 24, 1–34.

    Article  Google Scholar 

Download references

Acknowledgements

I am grateful to Robson Morgan, Kelsey O’Connor, and Malgorzata Switek for helpful comments, and to the University of Southern California for financial support.

Author information

Authors and Affiliations

  1. University of Southern California, Los Angeles, CA, USA

    Richard A. Easterlin

Authors
  1. Richard A. Easterlin
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Richard A. Easterlin .

Editor information

Editors and Affiliations

  1. Goethe-Universitat, Frankfurt am Main, Germany

    Wolfgang Glatzer

  2. University of East Anglia, Norwich Research Park, United Kingdom

    Laura Camfield

  3. Rhodes University Inst. Social & Economic Research, Grahamstown, South Africa

    Valerie Møller

  4. FLACSO-Mexico & UPAEP, Mexico City, Mexico

    Mariano Rojas

Rights and permissions

Reprints and permissions

Copyright information

© 2015 Springer Science+Business Media Dordrecht

About this chapter

Cite this chapter

Easterlin, R.A. (2015). Happiness and Economic Growth – The Evidence. In: Glatzer, W., Camfield, L., Møller, V., Rojas, M. (eds) Global Handbook of Quality of Life. International Handbooks of Quality-of-Life. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9178-6_12

Download citation

Publish with us

Policies and ethics

Search

Navigation