The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individual measures of subjective well-being. This paper suggests that these two findings are consistent with the presence of relative income terms in the utility function. Income may be evaluated relative to others (social comparison) or to oneself in the past (habituation). We review the evidence on relative income from the subjective well-being literature. We also discuss the relation (or not) between happiness and utility, and discuss some nonhappiness research (behavioral, experimental, neurological) related to income comparisons. We last consider how relative income in the utility function can affect economic models of behavior in the domains of consumption, investment, economic growth, savings, taxation, labor supply, wages, and migration.

Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles

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Relative income, happiness, and utility : an explanation for the Easterlin paradox and other puzzles

In this revised second edition, Deirdre McCloskey demonstrates how economic discourse employs metaphor, authority, symmetry and other rhetorical means of persuasion. ""The Rhetoric of Economics"" shows economists to be human persuaders and poets of the marketplace, even in their most technical and mathematical moods. It is further enhanced by three new chapters and two new bibliographies.

The Rhetoric of Economics

Introduction to the Science of Sociology

“Private Vices by the dextrous Management of a skillful Politician may be turned into Publick Benefits.”—Bernard Mandeville, 1714Corruption, some say, is endemic in all governments. Yet it has received remarkably little attention from students of government. Not only is the study of corruption prone to moralism, but it involves one of those aspects of government in which the interests of the politician and the political scientist are likely to conflict. It would probably be rather difficult to obtain (by honest means) a visa to a developing country which is to be the subject of a corruption study.One of the first charges levelled at the previous regime by the leaders of the coup in the less developed country is “corruption.” And generally the charge is accurate. One type of reaction to this among observers is highly moralistic and tends to see corruption as evil. “Throughout the fabric of public life in newly independent States,” we are told in a recent work on the subject, “runs the scarlet thread of bribery and corruption …” which is like a weed suffocating better plants. Another description of new states informs us that “corruption and nepotism rot good intentions and retard progressive policies.”Others have reacted against this moralistic approach and warn us that we must beware of basing our beliefs about the cause of coups on post-coup rationalizations, and also of judging the social consequences of an act from the motives of the individuals performing it. Under some circumstances Mandeville is right that private vice can cause public benefit.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0003055400135476

Bernard Mandeville

Papers

A Search into the Nature of Society

The First Dialogue

A Vindication of the Book

La fable des abeilles : deuxième partie (1729)

Wishes to a godson, with other miscellany poems