Empirics on the Long Run Relationship Between Economic Growth and Happiness

Document Type

Article

Publication Date

9-26-2014

Abstract

The paper finds a statistically significant positive but very small long-run relationship between economic growth and happiness. Reading the evidence as such can mean a rejection of the Easterlin Paradox. The trivial size of the estimated relationship nonetheless indicates little economic significance, if at all. The paper, in turn, argues that using economic significance rather than statistical significance in the evaluation of the evidence can actually lead to a confirmation of the Easterlin Paradox.

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