The Easterlin Paradox

Can money buy happiness? Although economic growth has long been considered an important goal for societies' prosperity and people's wellbeing, some research indicates that economic growth in itself does little to improve human happiness.

In the mid-70s, the economist Richard Easterlin showed that despite a steadily growing American economy over the previous decades, the average happiness had remained almost unaltered. The 'Easterlin Paradox' states that at a point in time happiness varies directly with income both among and within nations, but over time happiness does not trend upward as income continues to grow.

The Easterlin Paradox has been contested but highly influential, both on wellbeing research and because of the far-reaching policy implications. If economic growth does little to improve social welfare, should it be a primary goal of government policy – or should 'gross national happiness' be the main target?