The Puzzle of Relationship between the Economic Growth and Happiness An Inter-Country Analysis

Article Sidebar

PDF
Published Jun 2, 2021
DOI https://doi.org/10.28934/ea.21.54.1.pp1-12

Main Article Content

Yazdan Naghdi
The Islamic Azad Universitz, West Tehran Branch, Faculty of Economics, Department of Economics, Tehran, Iran.
Hamid Amirtaemeh
PhD student of Economics in Firuzkuh, Islamic Azad University
Soheila Kaghazian
The Islamic Azad University, West Tehran branch, Faculty of Economics, Department of Economics, Tehran, Iran

Abstract

In economic research, the relationship between economic growth and happiness is ambiguous. Happiness does not show a positive or negative dependence on economic growth over time. Based on the theoretical foundations and using interdisciplinary concepts in economics, e.g. political economy, technology philosophy, generalized method of moments (GMM), and data of 153 countries over the period 2000–2018, this paper tries to show that the one-dimensional look at economic growth and ignoring the growth consequences, including emotional gap, environmental degradation, and oligarchy (lack of healthy democracy), have a crucial role in creating growth and happiness. The main purpose of this study is to accept or reject the theory of Easterlin, called the “Easterlin puzzle”. According to Easterlin puzzle, the growth and development of countries do not increase the happiness of the people in those countries. Based on the model estimated in the present study for 153 countries, the theory of Easterlin is not approved, and economic growth has had a small but significant effect on short- and long-run happiness in these countries.

Article Details

Issue
Vol 54 No 1 (2021): Economic Analysis: Applied Research in Emerging Markets
Section
Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Once the manuscript is accepted for publication, authors shall transfer the copyright to the publisher. If the submitted manuscript is not accepted for printing by the journal, the authors shall retain all their rights. The following rights on the manuscript are transferred to the publisher, including any supplementary materials and any parts, extracts or elements of the manuscript:

  • the right to reproduce and distribute the manuscript in printed form, including print-on-demand;
  • the right to print prepublications, reprints and special editions of the manuscript;
  • the right to translate the manuscript into other languages;
  • the right to reproduce the manuscript using photomechanical or similar means including, but not limited to photocopy, and the right to distribute these copies;
  • the right to reproduce and distribute the manuscript electronically or optically using and all data carriers or storage media, and especially in machine readable/digitalized form on data carriers such as hard drive, CD-ROM, DVD, Blu-ray Disc (BD), Mini Disc, data tapes, and the right to reproduce and distribute the article via these data carriers;
  • the right to store the manuscript in databases, including online databases, as well as the right to transmit the manuscript in all technical systems and modes;
  • the right to make the manuscript available to the public or to closed user groups on individual demand, for use on monitors or other readers (including e-books), and in printable form for the user, either via the Internet, online service, or via internal or external networks.

References

Abounoori, E., & Eskandari, J. (2016). Comparing the Effects of Unemployment and Inflation on Happiness. Economic Policy Journal, 8(5), 137–152.
Acemoglu, D., & Robinson, J. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Crown Publishing group.
Acemoglu, D., & Robinson, J. (2005). Economic Origins of Dictatorship and Democracy. Cambridge: Cambridge university press.
Acemoglu, D. (2006). Introduction to Modern Economic Growth. Cambridge: MIT Press.
Atkinson, A. B. (1970). On the Measurement of Inequality. Journal of Economic Theory, 2(3), 244–263.
Cogoy, M. (2004). Dematerialization, Time Allocation, and the Service Economy. Structural Change and Economic Dynamic, 15, 185-193.
Cogoy, M. (1999). The consumer as a Social and Environment Actor. Ecological Economics, 28, 385–398.
Douglass, N. (1990). Institutions, Institutional Change, and Economic Performance. New York: Cambridge University Press.
Dusek, V. (2006). Philosophy of Technology: An Introduction. United States: Blackwell Publishing.
Dutt, A. K., & Radcliff, B. (2009). Happiness, Economics, and Politics. USA: University of Noter Dame.
Dutt, A. K. (2010). Consumption Takes Time: Some Implications for Happiness. in John Vint, Stan Metcalf, H. Kurz, P. Samuelson and N. Salvadori (eds). Economic Theory and Economic Thought: Essays in Honor of Ian Steedman. London: Routledge.
Easterlin, A. R. (2001). Income and Happiness: Toward a Unified Theory. Economic Journal, 111, 465–484.
Eisler, R. (2007). The Real Wealth of Nation. BK: Berrett-Koehler.
Happy Planet Report (HPI). Retrieved from http://happyplanetindex.org/
Human Development Report (HDR). Retrieved from http://www.hdr.undp.org/
Jafari, M. (2016). Assessing the Factors Affecting on Happiness in Islamic Countries. Iranian Economics Journal: Macroeconomics, 12(22), 65–84.
Kesici, Hülya. (2015). Technological Change and Economic Growth. Procedia - Social and Behavioral Sciences, 195(2015).649-654.
Knabe, A, Ratzel. S. (2010), better an insecure job than no job at all? Unemployment, job insecurity and subjective wellbeing, Economics Bulletin.30 (3):2486-2494.
Li, B., & Lu, Y. (2009). Happiness and Development: The Effect of Mental Well-Being Economic Growth, Conference on Improving the Human Destiny, 11–12 June, Lingnan University.
Li, Jiayuan. (2015). why economic growth did not translate into increased happiness: preliminary results of a multilevel modeling of happiness in China, Social Indicator Research, and 128(1):241-263.
Li, Lulu, Shi, Lei (2019). Economic growth and subjective Well-being: analyzing the formative mechanism of Easterlin Paradox, The Journal of Chinese Sociology, 3 January 2019.
Luigino, B., & Luigi Porta, P. (2007). Handbook on the Economics of Happiness. Edited by Luigino Bruni, Professor of Economics, LUMSA University, Rome, Italy and the late Pier Luigi Porta, formerly Professor of Economics, and Italy: University Milano-Bicocca.
Marks, N. (2017). The Happy Planet Index. Global Finance Journal, Retrieved from Journal of experimental psychology: General 34.
Marks, N. (2010). The Happy Planet Index. Www. Ted .com
Nili, F., Babazadeh Khorasani, B., & Shadkar, M. (2015). Analyzing Dependency of Subjective Well-Being in Developing Countries to Macroeconomics Factors. Journal of Economic Research, 50(1), 21-28.
Palacios-Huerta, I. (2013). In 100 Years: Leading Economists predict the Future. Cambridge: MIT Press.
Piketty, Th. (2014). Capital in Twenty First Century. United States: Harvard University Press.
Ricardo, M. (2007). The habits of happiness. Www. Ted .com.
Sacks, D. W., Stevenson, B., & Wolfers, J. (2012). The New Stylized Facts about Income and Subjective Well-Being. Emotion, 12(6), 1181–1187.
Stevenson, B., & Wolfers, J. (2008). Economic Growth and Subjective Well-Being, Reassessing the Easterlin Paradox, University of Pennsylvania and NBER. The 2008 World Congress on NAEP Measures for Nations, May 14 2008.
Waldinger, R. (2015). What Makes Good Life. Www. Ted .com.
Wagner, M., Schneider, F., & Halla, A. (2009). The quality of institutions and satisfaction with democracy in Western Europe: A panel analysis. European journal of political economy, 25, 30-41.
Wilkinson, R., & Pickett, K. (2010). The Spirit Level: Why Equality is Better for Everyone. London: Penguin.
World Happiness Report (WHR). Retrieved from https://worldhappiness.report/