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The Easterlin Paradox

September 1st, 2009 at 03:56 pm

For those who may not be familiar with it, it's a basic economic theory that the richer people are, the happier they are.

What makes it a "paradox" is the elaboration of this concept by Richard Easterlin, who wrote the paper on this back in 1974. Basically, it is the following:

1) Within a society, rich people tend to be much happier than poor people.
2) But, rich societies tend not to be happier than poor societies (or not by much).
3) As countries get richer, they do not get happier.

Sounds pretty reasonable enough, doesn't it? Even if it does seem paradoxical at first.

Well, the good folks at Freakonomics decided to take another stab at it with more recent data from around the world, and here's what they've concluded:

There is no Easterlin Paradox.

1) Rich people are happier than poor people.
2) Richer countries are happier than poorer countries.
3) As countries get richer, they tend to get happier.

Or so they claim. Here's their news article, and here's a spiffy graphics they've created with the data.

Perhaps it IS that easy. Richer = Happier. Or perhaps not. What do you think?

3 Responses to “The Easterlin Paradox”

  1. princessperky Says:

    I think I wish I lived in Denmark!

  2. baselle Says:

    We are talking generalities here. Averages. Perhaps the miserable-ness of poor people overrides things, or the wide disparity of rich and poor explains some of the paradox.

  3. Broken Arrow Says:

    Yes, I hope that not everyone takes this completely seriously. It's not even an academic paper that has been subjected to peer review I don't think. Rather, it's an online news article.

    That said, I also hope that it has brought some thought-provoking ideas to the table.

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