Happiness and Economic Growth: Lessons from Developing Countries

Happiness and Economic Growth: Lessons from Developing Countries (Studies of Policy Reform), arises from a PSE-CEPREMAP-DIMeco conference. Edited by Andrew E. Clark and Claudia Senik, the book compiles contributions by the some of the best-known researchers in happiness economics and development economics, including Richard Easterlin, who gave his name to the 'Easterlin paradox' that GDP growth does not improve happiness over the long run.

Many chapters underline the difficulty of increasing well-being in developing countries, including China, even in the presence of sustained income growth. This is notably due to the importance of income comparisons to others, adaptation (so that we get used to higher income), and the growing inequality of income. In particular, rank in the local income distribution is shown to be important, creating a beggar-thy-neighbour effect in happiness. Wealth comparisons in China are exacerbated by the gender imbalance, as the competition for brides creates a striking phenomenon of conspicuous consumption on the housing market. Policy has to be aware of these effects. This applies in particular to those who try to use self-reported subjective well-being in order to generate a 'social subjective poverty line', which is a key issue in developing countries.

Happiness and Economic Growth is published by Oxford University Press and available for purchase from Amazon.