Money can’t buy you love, but can buy you happiness (II)

Betsey Stevenson and Justin Wolfers in a data rich paper conclude three things:

a) the rich are happier;

(b) rich countries are happier;

(c) economic growth is associated with greater happiness for their citizens; and

(d) they find little evidence for the “relative income hypothesis” (that happiness depends more on one’s income relative to others in one’s country or community than it does on absolute levels of income).

Justin Wolfers is blogging about the paper at Freakonomics blog. There are to be several posts, but this is the first post. The paper is also summarized in today’s New York Times, featuring a nice graphic, The authors also discussed the research on CNBC (4/16/08).

The paper by Betsey Stevenson and Justin Wolfers (both at Penn’s Wharton School) has the rather academic title of “Economic Growth and Subjective Well-being: Regressing the Easterlin Paradox

Earlier post on this subject available here discussing paper by Angus Deaton on this topic; Deaton’s conclusions were partially the same but he found a cut-off point beyond which economic growth did not lead to increases in happiness, perhaps because of the destabilizing impact of the growth.

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