Income and Happiness: A Unique Paradox
The Unique Paradox
At any given point in time rich people are substantially more happy on average when compared to poor people. This fact is contrasted to the notion that over a life cycle, societies and the people within those socities have not grown happier. The table below shows the how happiness within the top income quarter is higher compared to the bottom quarter. However a striking comparision is also highlighted; Nations have grown richer and their people gained more income, but the average happiness level has not changed from 1975 to 1978.
There are two main economic views on the reasons for this unique trend that occurs.
- Richard Easternlin's ideas of material aspriations
- Layard's ideas of Rivalry, Habituation and Comparision
Material Aspirations and Income
To describe the unique occurences with income and happiness, Richard Easterlin, looks at how income and aspirations vary from a point in time aspect, as well as looking over time.
