Ruut Veenhoven,
Erasmus University Rotterdam
Published in Grunert, K & Oelander, F (eds.), 'Understanding
Economic Behavior', Kluwer Academic Publishers, 1989, Dordrecht, pp 9-32.
ABSTRACT
Easterlin has argued that national economic prosperity is of no consequence for the
individual’s appreciation of life. He contends that people in poor countries are as
happy as those of rich welfare states, and that decades of economic growth have left
people no happier than before. This paper attacks these empirical claims, as well as the
underlying theory that happiness depends largely on social comparison.
Cross-national comparison shows that people in the poorest countries of
the world are actually the least happy. This appears both in a re-analysis of Easterlin
own data and also in a new, more representative sample of countries. In fact, a
curvilinear pattern emerges, indicating that wealth is subject to the law of diminishing
utility.
Comparison over time in Western Europe shows that the post-war economic
recovery was paralleled by an increase in happiness. The slower rate of growth during the
last decade bas not been accompanied by a definite rise in happiness, though fluctuations
in happiness have tended to follow economic ups and downs with a year's delay.
It is argued that social comparison theory cannot explain these
results.