Chairman Ben S. Bernanke At the University of South Carolina, Commencement Ceremony, Columbia, South Carolina, May 8, 2010: The Economics of Happiness
“..Another area of this research bears directly on…the relationship between income and happiness. Some years ago the economist Richard Easterlin showed that, just as would be expected, wealthier people in any given country are more likely to tell a survey-taker that they are happy with their lives than are poorer people in the same country. However, Easterlin also found two other things that don’t fit so well with the economic perspective. First, he found that as countries get richer, beyond the level where basic needs such as food and shelter are met, people don’t report being any happier. For example, although today most Americans surveyed will tell you they are happy with their lives, the fraction of those who say that they are happy is not any higher than it was 40 years ago, when average incomes in the United States were considerably lower and few could even imagine developments like mobile phones or the Internet. Second, he found that–again, once you get above a basic sustenance level–on average, people in rich countries don’t report being all that much happier than people in lower-income countries. The finding that people in rich countries don’t report much greater happiness than those in lower-income countries–even though, in any given country, the rich say they are happier than the poor do–is called the Easterlin paradox, after its discoverer.”
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