Does Economic Growth Improve the Human Lot? Some Empirical Evidence

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.