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Veenhoven vs. Easterlin in Happiness Economics: Does Economic Growth Increase Happiness?

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  • Hatime Kamilcelebi

    (Kirklareli Universitesi, Uygulamalı Bilimler Fakultesi, Finans ve Bankacilik Bolumu, Kirklareli, Turkiye)

Abstract

Richard Easterlin was one of the pioneers of happiness economics studies and stated in his studies that a significant correlation exists between happiness and per capita income. He also explained that, despite the occurrence of an increase in per capita income in the countries he’d studied in his work, no increase had occurred in the stated happiness levels, with the average happiness level in rich countries not being higher than in poor countries. This result is called the Easterlin Paradox in the literature. Ruut Veenhoven was another pioneer of happiness economics and replied to the contradictory results in Easterlin’s study on economic growth and happiness. Veenhoven later criticized the empirical results of Easterlin’s research by using the same data that Easterlin had used and comparing with the results from other studies. Veenhoven (1989) stated an increase in per capita income to increase that country’s happiness levels. As a response to Veenhoven, Easterlin maintained the view that no long-term correlation exists between economic growth and happiness in his scientific studies. However, Veenhoven stated that his studies on the subject so far and the results tested with data from many countries had revealed the opposite. According to Veenhoven, the Easterlin Paradox is an illusion rather than a rule. These discussions from both happiness economics pioneers form the cornerstones of the happiness economics literature. The aim of the study is to examine in detail the works and research of Easterlinand Veenhoven that occurred in response to one another while simultaneously explaining the relationship between economic growth and increase in happiness in countries using the results from their works. When comparing the findings obtained from the data used by both scientists, happiness has been concluded to increase more in poor and developing countries as per capita income increases than in developed countries, although some countries were seen to be exceptions

Suggested Citation

  • Hatime Kamilcelebi, 2023. "Veenhoven vs. Easterlin in Happiness Economics: Does Economic Growth Increase Happiness?," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(2), pages 691-720, July.
    • Handle: RePEc:ist:iujepr:v:10:y:2023:i:2:p:691-720
    DOI: 10.26650/JEPR1170876
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    References listed on IDEAS

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    1. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    2. Easterlin, Richard A., 1974. "Does Economic Growth Improve the Human Lot? Some Empirical Evidence," MPRA Paper 111773, University Library of Munich, Germany.
    3. Michiel Slag & Martijn J. Burger & Ruut Veenhoven, 2019. "Did the Easterlin Paradox apply in South Korea between 1980 and 2015? A case study," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 325-351, December.
    4. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
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    More about this item

    Keywords

    Happiness economics; economic growth; GDP; Easterlin Paradox; Easterlin Illusion JEL Classification : I31 ; O40 ; O47;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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