The Paradox of Happiness: Evidence from the Late Pre-Classical and Classical Economic Thought

A number of studies have shown that considerable increases in real per capita income do not correspond to equivalent increases of reported individual happiness.This finding has been termed the paradox of happiness. The paper discusses this paradox by drawing from the history of economic thought. More specifically, it argues that the idea of basic and non-basic needs can be an alternative way of approaching this paradox. The basis of this idea can be found in pre-classical economic thought and also in the works of major classical economists. Thus, it is shown that preclassical and classical views on hierarchical consumption, basic needs and their links with happiness and material consumption might provide an alternative explanation of the happiness paradox.