In 1974, the economist Richard Easterlin published a finding that would generate decades of debate: within a given country at a given time, richer people report higher levels of happiness than poorer people; but as countries grow richer over time, average happiness does not rise commensurately. This became known as the Easterlin paradox. Its implications for economic policy are significant: if economic growth does not reliably produce greater wellbeing, the pursuit of GDP growth as the primary measure of national success may be misguided.
The paradox has been contested. Some economists, examining longer time series and more countries, have argued that there is a positive relationship between national income and average happiness — that the paradox disappears when the data are examined properly. Others defend the paradox and argue that the relationship between income and happiness is subject to adaptation and social comparison: people quickly adapt to higher income levels, and happiness is partly determined by one's income relative to others rather than in absolute terms. Rising tides lift all boats, and no one gets relatively wealthier.
What the debate reveals, regardless of its empirical resolution, is the difficulty of defining and measuring wellbeing. Happiness as reported in surveys captures a momentary subjective state; it may or may not track the deeper conditions — health, autonomy, meaningful relationships, civic participation — that most theories of wellbeing regard as its constituents. GDP, similarly, measures economic activity without regard for its distribution, sustainability, or the non-market goods that contribute to quality of life.
