Richard Easterlin and the World Andrew Oswald April 2018



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  • Richard Easterlin and the World
  • Andrew Oswald
  • April 2018
  • I would like to record that my earliest work on these issues began, at the start of the 1990s, in close collaboration with researchers Andrew E Clark and David G Blanchflower.

All over the world

All over the world

  • "Does Money Buy Happiness?" The Public Interest, 3 (Winter), 1973, 3-10.
  • "Does Economic Growth Improve the Human Lot?" in Paul A. David and Melvin W. Reder, eds., Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, New York: Academic Press, Inc., 1974.
  • "Does Money Buy Happiness?" The Public Interest, 3 (Winter), 1973, 3-10.
  • "Does Economic Growth Improve the Human Lot?" in Paul A. David and Melvin W. Reder, eds., Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, New York: Academic Press, Inc., 1974.
  • "Will Raising the Incomes of All Increase the Happiness of All?" Journal of Economic Behavior and Organization, 27:1 (June), 1995, 35-48.
  • "Does Money Buy Happiness?" The Public Interest, 3 (Winter), 1973, 3-10.
  • "Does Economic Growth Improve the Human Lot?" in Paul A. David and Melvin W. Reder, eds., Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, New York: Academic Press, Inc., 1974.
  • "Will Raising the Incomes of All Increase the Happiness of All?" Journal of Economic Behavior and Organization, 27:1 (June), 1995, 35-48.

Easterlin’s famous 1974 paper

Easterlin’s famous 1974 paper

  • “..relative status considerations as an important determinant of happiness”. P.30
  • “The growth process itself engenders ever-growing wants…” P. 33 [final sentence, in the main text, of Easterlin 1974]

Its subversive idea is this:

Its subversive idea is this:

The famous Easterlin paradox

Intriguingly

  • The word ‘paradox’ does not appear in Dick’s 1974 article.

I took the data in the 1974 paper

I took the data in the 1974 paper

  • Across nations Through time

I took the data in the 1974 paper

  • Across nations Through time
  • But what about from the 1970s right up to today?
  • Did Richard Easterlin turn out to be right?

Average Happiness Over Time in the USA: The Latest Data 1972 – 2016

Researchers now have results

Researchers now have results

  • From fMRI scans
  • From statistical work on well-being
  • Title: Social comparison affects reward-related brain activity in the human ventral striatum Author(s): Fliessbach K, Weber B, Trautner P, et al. Source: SCIENCE Volume: 318 Issue: 5854 Pages: 1305-1308 Published: NOV 23 2007
  • Title: Relative versus absolute income, joy of winning, and gender: Brain imaging evidence Author(s): Dohmen T, Falk A, Fliessbach K, et al. Source: JOURNAL OF PUBLIC ECONOMICS Volume: 95 Issue: 3-4 Special Issue: Sp. Iss. SI Pages: 279-285 Published: APR 2011

Armin Falk and colleagues

Falk et al in Science and JPubEcon

Falk et al in Science and JPubEcon

  • “The mere fact of outperforming the other subject positively affected reward-related brain areas.”
  • The next slide -- briefly -- is for specialists.

Blood-oxygenation equations

  • (similar with fixed effects, main variation across Ss)

So, inside your brain

  • You simply want to be high up the monkey pack

It has also now been shown that

  • Relative-income variables show up consistently in well-being regression equations.
  • E. Luttmer, Quarterly Journal of Economics 2005
  • A. E.Clark et al, JPubEcon 1996, JELit 2008
  • GDA Brown et al, Industrial Relations 2008 and Psychological Science 2010
  • D. Card et al, NBER paper, 2011.
  • A person’s happiness and mental health = f(their relative income).
  • A person’s happiness and mental health = f(their relative income).
  • Just as Easterlin’s 1974 article predicted.
  • Is our society going in a sensible direction? The evidence suggests: no.

Perhaps I am biased

  • My Hero

This talk is in honor of Richard A. Easterlin

This talk is in honor of Richard A. Easterlin



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