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Happiness and Economic Growth: Does the Cross Section Predict Time Trends? Evidence from Developing Countries

Author

Listed:
  • Easterlin, Richard A.

    (University of Southern California)

  • Sawangfa, Onnicha

    (University of Southern California)

Abstract
Based on point-of-time comparisons of happiness in richer and poorer countries, it is commonly asserted that economic growth will have a significant positive impact on happiness in poorer countries, if not richer. The time trends of subjective well-being (SWB) in 13 developing countries, however, are not significantly related to predictions derived from the cross sectional relation of happiness to GDP per capita. The point-of-time comparison leads to the expectation that the same absolute increase in GDP per capita will have a bigger impact on SWB in a poorer than a richer country. In fact there is no significant relation between actual trends in SWB and those predicted from the cross sectional relationship. Nor is a higher percentage rate of growth in GDP per capita significantly positively associated with a greater improvement in SWB. In the developing countries studied here a greater increase in happiness does not accompany more rapid economic growth. These conclusions hold true for two measures of SWB that are separately analyzed, overall life satisfaction and satisfaction with finances. The two SWB measures themselves, however, typically trend similarly within a country, providing mutually supporting evidence of the trend in well-being.

Suggested Citation

  • Easterlin, Richard A. & Sawangfa, Onnicha, 2009. "Happiness and Economic Growth: Does the Cross Section Predict Time Trends? Evidence from Developing Countries," IZA Discussion Papers 4000, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4000
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    References listed on IDEAS

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    Cited by:

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    2. Easterlin, Richard A. & Angelescu McVey, Laura, 2009. "Happiness and Growth the World Over: Time Series Evidence on the Happiness-Income Paradox," IZA Discussion Papers 4060, Institute of Labor Economics (IZA).
    3. Ioana CIORBAGIU, 2021. "Influences and spatial effects on subjective well-being," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(626), S), pages 23-42, Spring.
    4. Betsey Stevenson & Justin Wolfers, 2013. "Subjective Well-Being and Income: Is There Any Evidence of Satiation?," American Economic Review, American Economic Association, vol. 103(3), pages 598-604, May.
    5. Knight, John & Gunatilaka, Ramani, 2012. "Income, aspirations and the Hedonic Treadmill in a poor society," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 67-81.
    6. Rojas, Mariano, 2009. "Economía de la felicidad. Hallazgos relevantes respecto al ingreso y el bienestar," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(303), pages 537-573, julio-sep.
    7. Anna Maccagnan & Tim Taylor & Mathew P. White, 2020. "Valuing the Relationship Between Drug and Alcohol Use and Life Satisfaction: Findings from the Crime Survey for England and Wales," Journal of Happiness Studies, Springer, vol. 21(3), pages 877-898, March.
    8. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 35-60, March.
    9. Teresa García-Muñoz & Shoshana Neuman & Tzahi Neuman, 2014. "Subjective Health Status of the Older Population: Is It Related to Country-Specific Economic Development Measures?," Working Papers 2014-02, Bar-Ilan University, Department of Economics.
    10. Angeles, Luis, 2011. "A closer look at the Easterlin Paradox," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 67-73, February.
    11. Xiu Wu & Jinting Zhang & Daojun Zhang, 2021. "Explore Associations between Subjective Well-Being and Eco-Logical Footprints with Fixed Effects Panel Regressions," Land, MDPI, vol. 10(9), pages 1-15, September.

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    More about this item

    Keywords

    developing countries; economic growth; happiness;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D60 - Microeconomics - - Welfare Economics - - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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