Money Changes Everything

… As more data come in, however, many economists are becoming convinced of one significant change: the original Easterlin paradox doesn’t quite hold up. Broadly speaking, the data now indicate that as people get richer, they report getting happier too. …

As we ponder how to help the nearly three billion people who live on less than $2.50 per day, it is important to realize that seemingly small changes in income do lead to profound increases in happiness. In wealthier nations, of course, it takes a lot more money. Still, most rich countries have reported increases in happiness as they become richer.

There is one strange exception. The U.S. is nearly three times as rich today as it was in 1973, when Easterlin was collecting his data. According to nearly every survey, though, Americans are not at all happier than we were back then. This is explained, in part, by the fact that many Americans have not shared in the increased wealth. [cont.]

Adam Davidson, New York Times Magazine