There has been extensive empirical research in recent years pointing to a weak correlation between economic growth and subjective well-being (happiness), at least for developed economies (i.e. the so-called ‘Easterlin paradox’). Recent findings from the behavioural sciences and happiness literature link this paradoxical relationship to negative externalities on utility imposed by social comparison (i.e. relative income with respect to others) and adaptation (habituation to own income in the past). We believe that the type of economic growth (pro-poor, pro-middle, pro-rich, neutral), in combination with sensitivity to social comparison and past income, is a key determinant of happiness trajectories and future utility levels. With the use of agent-based simulations we examine the long-term dynamics of subjective-well-being by focusing attention on the type of growth process rather than the mere size of income growth. We generally find that pro-middle (and balanced) growth corresponds to much higher levels of long-term happiness in comparison to pro-rich growth.
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A researcher who uses computer simulated ABM to represent a real system needs to undergo a model-building process that can be delineated in three stages (Galán et al. 2009). First of all, one needs to conceptualise the system that will be represented, thus defining the “research question” and identifying the crucial variables of the system and their interrelations. Subsequently, it is necessary to find a set of formal specifications that is able to characterise the conceptual model. Finally, the model needs to be coded and executed (Galán et al. 2009).
The model is implemented and simulated in Netlogo 4.1.2 (Wilensky 1999).
In other words, we assume that at period t 0, the total population of agents is equally divided between happy and unhappy individuals.
One can also notice that pro-middle growth generally corresponds to higher levels of happiness in Fig. 1b compared to Fig. 1a for any given level of α. This is expected since a larger value for s (as it is the case in Fig. 1b) increases the relative share of the middle-income group in the total population.
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Baggio, J.A., Papyrakis, E. Agent-Based Simulations of Subjective Well-Being. Soc Indic Res 115, 623–635 (2014). https://doi.org/10.1007/s11205-012-0231-5
- Income redistribution