Insights on Development from the Economics of Happiness

The literature on the economics of happiness in developed economies finds discrepancies between reported measures of well-being and income measures. One is the so-called Easterlin paradox: that average happiness levels do not increase as countries...

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Bibliographic Details
Main Author:	Graham, Carol
Format:	Journal Article
Language:	English en_US
Published:	Oxford University Press on behalf of the World Bank 2013
Subjects:	ACCOUNTING ATTRITION AVERAGE INCOME BARGAINING BARGAINING POWER BENCHMARKS BOUNDED RATIONALITY CAPITAL MARKETS CIVIL WAR COLLECTIVE INVESTMENTS COUNTRY DUMMY CROSS-COUNTRY COMPARISONS CROSS-COUNTRY STUDY CROSS-SECTION DATA DEMOCRACY DEMOGRAPHIC DEPENDENT VARIABLE DEVALUATIONS DEVELOPED ECONOMIES DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT OUTCOMES DEVELOPMENT POLICY DIMINISHING RETURNS DISTRIBUTION OF INCOME DISTRIBUTIONAL OUTCOMES DRIVERS EARNINGS LEVELS ECONOMIC ANALYSIS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC PROGRESS ECONOMIC REFORM ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC SITUATION ECONOMIC STUDIES ECONOMICS EMERGING MARKET EMERGING MARKET ECONOMIES EMPIRICAL EVIDENCE EMPIRICAL STUDIES EMPIRICAL WORK EQUITABLE DISTRIBUTION EQUITY ISSUES EXTREME POVERTY FINANCIAL CRISES FINANCIAL CRISIS FOREIGN INVESTMENT FREE PRESS FREE TRADE FUTURE EARNINGS FUTURE PROSPECTS GDP GDP PER CAPITA GLOBAL MARKETS GLOBALIZATION GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT GROWTH GROSS NATIONAL PRODUCT GROSS NATIONAL PRODUCT PER CAPITA GROWTH PERIOD HEALTH OUTCOMES HIGH INFLATION HIGH UNEMPLOYMENT HIGH UNEMPLOYMENT RATES HUMAN RIGHTS INCOME INCOME DATA INCOME DIFFERENCES INCOME DIFFERENTIALS INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME GAINS INCOME GROUP INCOME GROUPS INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME MEASURES INCOME SCALE INCOMES INDIVIDUAL COUNTRIES INDUSTRIAL ECONOMIES INEQUALITY INFANT MORTALITY INFORMATION SYSTEMS INNOVATION INSURANCE JOB INSECURITY LABOR FORCE LABOR MARKET LIFE EXPECTANCY LIVING STANDARDS LOG INCOME LONGITUDINAL DATA LOTTERY MACROECONOMIC CONDITIONS MACROECONOMICS MARKET ASSETS MARKET ECONOMIES MARKET PERFORMANCE MEAN INCOME MEASUREMENT ERROR MEASURES OF POVERTY MEDIAN VOTER MIDDLE CLASS MORTALITY NATIONAL INCOME NATIONAL SURVEYS NEGATIVE EFFECT NEGATIVE SHOCK NEGATIVE SHOCKS NEW MARKET OPTIMIZATION PARTICULAR COUNTRIES PER CAPITA INCOME PER CAPITA INCOME LEVELS PERSONAL INCOME POLICY IMPLICATIONS POLICY OBJECTIVE POLICY RESEARCH POLITICAL ECONOMY POLITICAL ECONOMY CONSIDERATIONS POLITICAL INSTITUTIONS POLITICAL STABILITY POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POVERTY DYNAMICS POVERTY HEADCOUNT POVERTY LINE POVERTY LINES POVERTY REDUCTION PRIMARY EDUCATION PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PUBLIC ECONOMICS PUBLIC POLICY RAPID GROWTH REDISTRIBUTIVE TAXATION REGIONAL UNEMPLOYMENT RELATIVE INCOME REMOTE AREAS SAVINGS SKILLED LABOR SOCIAL CAPITAL SOCIAL MOBILITY STATISTICAL ANALYSIS TAXATION UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT RATES URBAN WORKERS VOLATILITY WAGE DIFFERENTIALS WEALTH WELL BEING WELL-BEING WELLBEING
Online Access:	http://documents.worldbank.org/curated/en/2013/01/17591346/insights-development-economics-happiness http://hdl.handle.net/10986/16402

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Summary:	The literature on the economics of happiness in developed economies finds discrepancies between reported measures of well-being and income measures. One is the so-called Easterlin paradox: that average happiness levels do not increase as countries grow wealthier. This article explores how that paradox and survey research on reported wellbeing in general can provide insights into the gaps between standard measures of economic development and individual assessments of welfare. Analysis of research on reported wellbeing in Latin America and Russia finds notable discrepancies between respondent assessments of their own wellbeing and income or expenditure based measures. Accepting a wide margin for error in both types of measures, the article posits that taking such discrepancies into account may improve the understanding of development outcomes by providing a broader view on wellbeing than do income or expenditure based measures alone. It suggests particular areas where research on reported well-being has the most potential to contribute. Yet the article also notes that some interpretations of happiness research psychologist set point theory, in particular may be quite limited in their application to development questions and cautions against the direct translation of results of happiness surveys into policy recommendations.

Insights on Development from the Economics of Happiness

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