Title: The Easterlin illusion: economic growth does go with greater happiness

Authors: Ruut Veenhoven; Floris Vergunst

Addresses: Erasmus University Rotterdam, POB 1738, 3000 DR, Rotterdam, Netherlands; North-West University, Vaal Triangle Campus, P.O. Box 1174, Vanderbijlpark 1900, South Africa ' Erasmus University Rotterdam, POB 1738, 3000 DR Rotterdam, Netherlands

Abstract: The 'Easterlin Paradox' holds that economic growth in nations does not buy greater happiness for the average citizen. This thesis was advanced in the 1970s on the basis of the then available data on happiness in nations. Later, data have disproved most of the empirical claims behind the thesis, but Easterlin still maintains that there is no long-term correlation between economic growth and happiness. This last claim was tested using the time trend data available in the World Database of Happiness, which involve 1,531 data points in 67 nations that yield 199 time-series ranging from 10 to more than 40 years. The analysis reveals a positive correlation between GDP growth and rise of in happiness in nations. Both GDP and happiness have gone up in most nations, and average happiness has risen more in nations where the economy has grown the most; r = +0.20 p < 05. On average a 1% growth in income per capita per year was followed by a rise in average happiness on scale 0-10 of 0.0034; thus, a gain in happiness of a full point would take 60 years with an annual economic growth of 5%.

Keywords: economic growth; trends; cross national survey; progress; greater happiness; Easterlin Paradox; GDP growth; average happiness.

DOI: 10.1504/IJHD.2014.066115

International Journal of Happiness and Development, 2014 Vol.1 No.4, pp.311 - 343

Received: 14 May 2013
Accepted: 22 Aug 2013

Published online: 13 Dec 2014 *

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