Great question. The difference between the cross-sectional (CS) positive relation between GDP pc and life satisfaction and the nill time-series (TS) relation is best explained by social comparison. See the article for details.
However, people also surely adjust their expectations over time, Bernard Van Praag used the term preference drift to refer to the phenomenon described (https://www.nowpublishers.com/article/DownloadSummary/MIC-026), and psychologists use the term hedonic treadmill. This is important, but not enough to explain the difference between the CS and TS results. There are other explanations too, essentially that it is the quality of growth that matters, see (https://www.sciencedirect.com/science/article/abs/pii/S0305750X17300049)
Thank you for your response, and for referencing the two papers.
Great question. The difference between the cross-sectional (CS) positive relation between GDP pc and life satisfaction and the nill time-series (TS) relation is best explained by social comparison. See the article for details.
However, people also surely adjust their expectations over time, Bernard Van Praag used the term preference drift to refer to the phenomenon described (https://www.nowpublishers.com/article/DownloadSummary/MIC-026), and psychologists use the term hedonic treadmill. This is important, but not enough to explain the difference between the CS and TS results. There are other explanations too, essentially that it is the quality of growth that matters, see (https://www.sciencedirect.com/science/article/abs/pii/S0305750X17300049)
Thank you for your response, and for referencing the two papers.