This idea that all that mattered was your income relative to others was an idea known as the Easterlin paradox. So we did the simplest possible thing an economist could do, which is we gathered as much data as we could from all around the world. And we confirmed it’s absolutely true that within a country at a point in time, richer people are happier than poorer people.
We, in fact, showed that’s true for over 140 countries. Definitely true. We also showed that if you get data on countries all around the world at different levels of economic development, it’s overwhelmingly the case that countries that are more economically developed, have higher levels of GDP, and have much higher levels of happiness than countries that are poorer. In fact, the correlation between the two is remarkably strong.
[…]All of this leads to this remarkably uninteresting and kind of intuitively obvious insight that, in fact, as we get wealthier, or as we have more opportunities afforded to us by economic growth, we use them in ways that create joy.
[…]We don’t know exactly what it is that causes that greater happiness. Is it the income itself? Is it not losing children in childbirth? Is it a sense of security? Is it the support of the welfare state? We don’t know. But we do know the package of things rich countries do seem like they’re enormously helpful for people’s well-being.
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