International Review of Economics

, Volume 61, Issue 4, pp 329–346 | Cite as

Income growth and happiness: reassessment of the Easterlin Paradox

Research Article

Abstract

The paper presents evidence of a positive but very small long-run relationship between income growth and happiness. Such finding is usually presented as a refutation of the Easterlin Paradox. The paper, however, argues that what the evidence actually reveals is that income growth has very little impact in terms of increasing happiness over the long term. The paper, in turn, argues that a rejection of the Easterlin Paradox requires the evidence to indicate economic significance. That is, the magnitude of the estimated long-run relationship between income growth and happiness is the more appropriate yardstick for an evaluation of the Easterlin Paradox.

Keywords

Easterlin Paradox Income growth Happiness Dynamics 

JEL Classification

A20 C53 I30 O40 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Department of EconomicsAteneo de Manila UniversityQuezon CityPhilippines

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