The Origins of Happiness

Income

to income that may be at work, and both of these were men-

tioned in Easterlin’s original article. He hypothesized that

there were two possible adverse factors at work.

• Social comparisons. If others become richer, this re-
  duces the enjoyment I get from a given income.
  And if in the extreme case people care only about
  their relative income, then economic growth can
  bring no overall increase in happiness.


• Adaptation. The enjoyment I get from a given in-
  come is lower the higher my previous income—
  owing to habituation. If there is “full adaptation,”

Year Year

Life

-satisfa

ctio

n 1–

7

GD

P pe

r capita

($

20

10

,^000

’s)

6

5

4

38

36

34

32

30

28

1995 2000 2005 2010 2015

Britain (BHPS)

Life

-satisfa

ctio

n

0–

10

GD

P pe

r capita

($

20

10

,^000

9 ’s)

8

7

6

5

45

40

35

30

25

1980 1990 2000 2010 2020

West Germany (SOEP)

Life

-satisfa

ctio

n

0–

10

GD

P pe

r capita

($

20

10

, 000’

9 s)

8

7

6

5

44

42

40

38

36

2000 2005 2010 2015

Australia (HILDA)

Happiness

1–

3

GD

P pe

r capita

($

20

10

, 000’

3.0 s)

2.5

2.0

1.5

50

40

30

20

10

1940 1960 1980 2000 2020

USA (AIPO+GSS)

Figure 2.3. Average income ( ) and well- being ( º º º º º ) over time