The Origins of Happinessdoubles? The effect turns out to be identical in size. There are
N com parators. When one individual’s income doubles, each
comparator finds that her comparison income has risen
by a fraction 1/N, and therefore her happiness has fallen
by 0.13/N. But there are N comparators. So their collective
happiness has fallen by 0.13 points. That is the figure in the
second column.
The implications are devastating. If the estimates are ac-
curate, increases in income cannot increase the happiness
of society. For if one individual increases her income, that
person becomes happier, but others become less happy by a
roughly equal amount. Similarly, if all individuals increase
their income equally, none of them gain. This analysis must
help to explain why the huge improvements in living stan-
dards in the United States since 1950, West Germany since
1970, and China since 1990 have not been accompanied
by increases in happiness. This said, happiness has clearly
risen in some other countries, and income growth may have
played some role in this. The important conclusion is that
social comparisons play an important role in relation to in-
come, which should never be ignored.
Unfortunately the same appears to apply also to years of
education, though this has been less well studied in the lit-
erature. An extra year of education directly raises your own
happiness by 0.03 points on average throughout life— a
worthwhile effect. But the evidence for Britain, Germany,
and Australia is that education is highly subject to compar-
ison effects— if others have more education, it makes you
less happy with whatever you yourself get. Education does
of course also raise income, improve mental health, and re-
duce crime. Even so our estimates imply that educational
expansion fails to raise aggregate life- satisfaction, unless this