Easterlin paradox

Common card · No. 465193

The Easterlin paradox is a finding in happiness economics formulated in 1974 by Richard Easterlin, then professor of economics at the University of Pennsylvania, and the first economist to study happiness data. Easterlin further refined his finding during his subsequent long career at the University of Southern California. The paradox states that, at a point in time, happiness varies directly with income both among and within nations; but over time, happiness does not trend upward as income continues to grow: While people on higher incomes are typically happier than their lower-income counterparts at a given point in time, higher incomes don't produce greater happiness over time. One explanation is that one's happiness depends on a comparison between their income and their perceptions of the average standard of living. If everyone's income increases, one's increased income gives a short boost to their happiness, since they do not realize that the average standard of living has gone up....

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