Does Economic Growth Improve the Human Lot? Some Empirical Evidence
01 Jan 1974-pp 89-125
TL;DR: In this article, the authors discuss the association of income and happiness and suggest a Duesenberry-type model, involving relative status considerations as an important determinant of happiness.
Abstract: Publisher Summary This chapter discusses the association of income and happiness. The basic data consist of statements by individuals on their subjective happiness, as reported in thirty surveys from 1946 through 1970, covering nineteen countries, including eleven in Asia, Africa, and Latin America. Within countries, there is a noticeable positive association between income and happiness—in every single survey, those in the highest status group were happier, on the average, than those in the lowest status group. However, whether any such positive association exists among countries at a given time is uncertain. Certainly, the happiness differences between rich and poor countries that one might expect on the basis of the within-country differences by economic status are not borne out by the international data. Similarly, in the one national time series studied, for the United States since 1946, higher income was not systematically accompanied by greater happiness. As for why national comparisons among countries and over time show an association between income and happiness that is so much weaker than, if not inconsistent with, that shown by within-country comparisons, a Duesenberry-type model, involving relative status considerations as an important determinant of happiness, is suggested.
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TL;DR: The literature on subjective well-being (SWB), including happiness, life satisfaction, and positive affect, is reviewed in three areas: measurement, causal factors, and theory.
Abstract: The literature on subjective well-being (SWB), including happiness, life satisfaction, and positive affect, is reviewed in three areas: measurement, causal factors, and theory. Psychometric data on single-item and multi-item subjective well-being scales are presented, and the measures are compared. Measuring various components of subjective well-being is discussed. In terms of causal influences, research findings on the demographic correlates of SWB are evaluated, as well as the findings on other influences such as health, social contact, activity, and personality. A number of theoretical approaches to happiness are presented and discussed: telic theories, associationistic models, activity theories, judgment approaches, and top-down versus bottom-up conceptions.
10,021 citations
Cites background from "Does Economic Growth Improve the Hu..."
...Easterlin (1974) reviewed 30 crosssectional studies conducted within countries....
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...for the years 1946 through 1978 (Campbell, 1981; Easterlin, 1974)....
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...Although persons in wealthier countries report higher SWB than persons in poorer countries (Easterlin, 1974; Gallup, 1976–1977; Silver, 1980), this effect may be weaker than within-country differences, although a rigorous analysis of effect sizes has not been reported....
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Posted Content•
TL;DR: Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness". A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB.
Abstract: W. Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness". A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB. E. Diener's (1984) review placed greater emphasis on theories that stressed psychological factors. In the current article, the authors review current evidence for Wilson's conclusions and discuss modern theories of SWB that stress dispositional influences, adaptation, goals, and coping strategies. The next steps in the evolution of the field are to comprehend the interaction of psychological factors with life circumstances in producing SWB, to understand the causal pathways leading to happiness, understand the processes underlying adaptation to events, and develop theories that explain why certain variables differentially influence the different components of SWV (life satisfaction, pleasant affect, and unpleasant affect).
9,254 citations
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...Contrary to Easterlin's (1974)...
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TL;DR: Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness" A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB as discussed by the authors.
Abstract: W Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness" A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB E Diener's (1984) review placed greater emphasis on theories that stressed psychological factors In the current article, the authors review current evidence for Wilson's conclusions and discuss modern theories of SWB that stress dispositional influences, adaptation, goals, and coping strategies The next steps in the evolution of the field are to comprehend the interaction of psychological factors with life circumstances in producing SWB, to understand the causal pathways leading to happiness, understand the processes underlying adaptation to events, and develop theories that explain why certain variables differentially influence the different components of SWB (life satisfaction, pleasant affect, and unpleasant affect) In 1967, Warner Wilson presented a broad review of subjective well-being (SWB) research entitled, "Correlates of Avowed Happiness" Based on the limited data available at that time, Wilson concluded that the happy person is a "young, healthy, welleducated, well-paid, extroverted, optimistic, worry-free, religious, married person with high self-esteem, job morale, modest aspirations, of either sex and of a wide range of intelligence" (p 294) In the three decades since Wilson's review, investigations into SWB have evolved Although researchers now know a great deal more about the correlates of SWB, they are less interested in simply describing the demographic characteristics that correlate with it Instead, they focus their effort on understanding the processes that underlie happiness This trend represents a greater recognition of the central role played by people's goals, coping efforts, and dispositions In this article, we review research on several major theoretical approaches to well-being and then indicate how these theories clarify the findings on demographic correlates of SWB Throughout the review we suggest four directions that researchers should pursue in the decades ahead These are by no means the only questions left to answer, but we believe they are the most interesting issues left to resolve First, the causal direction of the correlates of happiness must be examined through more sophisticated methodologies Although the causal priority of demographic factors such as marriage and income is intuitively appealing, it is by no means certain Second, researchers must focus greater attention on the interaction between internal factors (such as personality traits) and external circumstances As we shall see, demographic factors have surprisingly small effects on SWB, but these effects may depend on the personalities of those individuals being studied Thus, future research must take Person X Situation interactions into account Third, researchers must strive to understand the processes underlying adaptation Considerable adaptation to both good and bad circumstances often occurs, yet the processes responsible for these effects are poorly understood Research that examines how habituation, coping strategies, and changing goals influence adaptation will shed much light on the processes responsible for SWB Finally, theories must be refined to make specific predictions about how input variables differentially influence the components of SWB In the past, many researchers have treated SWB as a monolithic entity, but it is now clear that there are separable components that exhibit unique patterns of relations with different variables In each section of this article we discuss progress and opportunities in these four areas
8,352 citations
TL;DR: The literature on subjective well-being (SWB), including happiness, life satisfaction, and positive affect, is reviewed in this article in three areas: measurement, causal factors, and theory.
Abstract: The literature on subjective well-being (SWB), including happiness, life satisfaction, and positive affect, is reviewed in three areas: measurement, causal factors, and theory. Psychometric data on single-item and multi-item subjective well-being scales are presented, and the measures are compared. Measuring various components of subjective well-being is discussed. In terms of causal influences, research findings on the demographic correlates of SWB are evaluated, as well as the findings on other influences such as health, social contact, activity, and personality. A number of theoretical approaches to happiness are presented and discussed: telic theories, associationistic models, activity theories, judgment approaches, and top-down versus bottom-up conceptions.
7,799 citations
TL;DR: In this article, the authors present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point, in which losses and disadvantages have greater impact on preferences than gains and advantages.
Abstract: Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. We present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages. Implications of loss aversion for economic behavior are considered. The standard models of decision making assume that preferences do not depend on current assets. This assumption greatly simplifies the analysis of individual choice and the prediction of trades: indifference curves are drawn without reference to current holdings, and the Coase theorem asserts that, except for transaction costs, initial entitlements do not affect final allocations. The facts of the matter are more complex. There is substantial evidence that initial entitlements do matter and that the rate of exchange between goods can be quite different depending on which is acquired and which is given up, even in the absence of transaction costs or income effects. In accord with a psychological analysis of value, reference levels play a large role in determining preferences. In the present paper we review the evidence for this proposition and offer a theory that generalizes the standard model by introducing a reference state. The present analysis of riskless choice extends our treatment of choice under uncertainty [Kahneman and Tversky, 1979, 1984; Tversky and Kahneman, 1991], in which the outcomes of risky prospects are evaluated by a value function that has three essential characteristics. Reference dependence: the carriers of value are gains and losses defined relative to a reference point. Loss aversion: the function is steeper in the negative than in the positive domain; losses loom larger than corresponding gains. Diminishing sensitivity: the marginal value of both gains and losses decreases with their
5,864 citations
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TL;DR: In this paper, the authors propose a primitive and experimental measure of economic welfare, in which they attempt to allow for the more obvious discrepancies between Gross national product (GNP) and economic welfare.
Abstract: A long decade ago economic growth was the reigning fashion of political economy. Growth measures nearly always involve diversions of current resources from other uses, sacrifices of current consumption for the benefit of succeeding generations of consumers. In this chapter, the authors' measure understates economic welfare and its growth to the extent that education and medical care are direct rather than indirect sources of consumer satisfaction. They have constructed a primitive and experimental measure of economic welfare, in which they attempt to allow for the more obvious discrepancies between Gross national product (GNP) and economic welfare. The authors' adjustments to GNP fall into three general categories: reclassification of GNP expenditures as consumption, investment, and intermediate; imputation for the services of consumer capital, for leisure, and for the product of household work; correction for some of the disamenities of urbanization. The omission of leisure and of nonmarket productive activity from measures of production conveys the impression that economists are blindly materialistic.
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