Always enjoy your posts, you tend to have fresh takes and clear analyses on topics that feel well-trodden.
That said, I think I’m mainly confused if the Easterlin paradox is even a thing, and hence whether there’s anything to explain. On the one hand there are writeups like Michael Plant’s summarising the evidence for it, which you referenced. On the other hand, my introduction to Easterlin’s paradox was via Our World in Data’s happiness and life satisfaction article, which summarised the evidence for happiness rising over time in most countries here and explain away the Easterlin paradox here as being due to either survey questions changing over time (in Japan’s case, chart below) or to inequality making growth not benefit the majority of people (in the US’s case).
The reply that Easterlin and O’Connor (2022) make is that Stevenson, Wolfers, and co. are looking over too short a time horizon. They point out that the critique looks at segments of ten years and to really test the paradox requires looking over a longer time period, which is what Easterlin and O’Connor (2022) do themselves. Easterlin and O’Connor (2022) write that they don’t really understand why Stevenson and Wolfers are using these short time segments rather than the longer ones.
But the chart for Japan above, which is from Stevenson and Wolfers (2008), spans half a century, not ten years, so Easterlin and O’Connor’s objection is irrelevant to the chart.
This OWID chart (which is also the first one you see on Wikipedia) is the one I always think about when people bring up the Easterlin paradox:
But Plant’s writeup references the book Origins of Happiness (Clark et al., 2019) which has this chart instead:
So is the Easterlin paradox really a thing or not? Why do the data seem to contradict each other? Is it all mainly changing survey questions and rising inequality? On priors I highly doubt it’s that trivially resolvable, but I don’t have a good sense of what’s going on.
I wish there was an adversarial collaboration on this between folks who think it’s a thing and those who think it isn’t.
First, there are differences in the metrics used – the life satisfaction (0-10) is more granular than the 4 category response questions.
Additionally, the plot from OWID, a lot of the data seems quite short-term – e.g., 10 years or so. Easterlin always emphasises that the paradox is across the whole economic cycle, but a country might experience continuous growth in the space of a decade.
My overall view – several happiness economists I’ve spoken to basically think the Easterlin Paradox is correct (at least, to be specific: self-reported national life satisfaction is flat in the long-run), so I defer to them.
It’s worth saying that the fact that most arrows go up on the OWiD chart could just point to two independent trends, one of growth rising almost everywhere and another of happiness rising almost everywhere, for two completely independent reasons. Without cases where negative or zero growth persists for a long time, it’s hard to rule this out.
It could in theory, but OWID’s summary of the evidence mostly persuades me otherwise. Again I’m mostly thinking about how the Easterlin paradox would explain this OWID chart:
I’m guessing Easterlin et al would probably counter that OWID didn’t look at a long-enough timeframe (a decade is too short), and I can’t immediately see what the timeframe is in this chart, so there’s that.
Always enjoy your posts, you tend to have fresh takes and clear analyses on topics that feel well-trodden.
That said, I think I’m mainly confused if the Easterlin paradox is even a thing, and hence whether there’s anything to explain. On the one hand there are writeups like Michael Plant’s summarising the evidence for it, which you referenced. On the other hand, my introduction to Easterlin’s paradox was via Our World in Data’s happiness and life satisfaction article, which summarised the evidence for happiness rising over time in most countries here and explain away the Easterlin paradox here as being due to either survey questions changing over time (in Japan’s case, chart below) or to inequality making growth not benefit the majority of people (in the US’s case).
Plant’s writeup says that
But the chart for Japan above, which is from Stevenson and Wolfers (2008), spans half a century, not ten years, so Easterlin and O’Connor’s objection is irrelevant to the chart.
This OWID chart (which is also the first one you see on Wikipedia) is the one I always think about when people bring up the Easterlin paradox:
But Plant’s writeup references the book Origins of Happiness (Clark et al., 2019) which has this chart instead:
So is the Easterlin paradox really a thing or not? Why do the data seem to contradict each other? Is it all mainly changing survey questions and rising inequality? On priors I highly doubt it’s that trivially resolvable, but I don’t have a good sense of what’s going on.
I wish there was an adversarial collaboration on this between folks who think it’s a thing and those who think it isn’t.
Hey Mo, thanks so much!
I don’t have a particularly strong view on this.
I guess:
First, there are differences in the metrics used – the life satisfaction (0-10) is more granular than the 4 category response questions.
Additionally, the plot from OWID, a lot of the data seems quite short-term – e.g., 10 years or so. Easterlin always emphasises that the paradox is across the whole economic cycle, but a country might experience continuous growth in the space of a decade.
My overall view – several happiness economists I’ve spoken to basically think the Easterlin Paradox is correct (at least, to be specific: self-reported national life satisfaction is flat in the long-run), so I defer to them.
It’s worth saying that the fact that most arrows go up on the OWiD chart could just point to two independent trends, one of growth rising almost everywhere and another of happiness rising almost everywhere, for two completely independent reasons. Without cases where negative or zero growth persists for a long time, it’s hard to rule this out.
It could in theory, but OWID’s summary of the evidence mostly persuades me otherwise. Again I’m mostly thinking about how the Easterlin paradox would explain this OWID chart:
I’m guessing Easterlin et al would probably counter that OWID didn’t look at a long-enough timeframe (a decade is too short), and I can’t immediately see what the timeframe is in this chart, so there’s that.