Table of Contents

Happiness, Economics and Politics

Happiness, Economics and Politics

Towards a Multi-Disciplinary Approach

Edited by Amitava Krishna Dutt and Benjamin Radcliff

This timely and important book presents a unique study of happiness from both economic and political perspectives. It offers an overview of contemporary research on the emergent field of happiness studies and contains contributions by some of the leading figures in the field.

Chapter 6: Happiness and the Relative Consumption Hypothesis

Amitava Krishna Dutt

Subjects: economics and finance, economic psychology, history of economic thought


Amitava Krishna Dutt1 INTRODUCTION 6.1 A popular bumper sticker from the 1980s declares that the person ‘who dies with the most toys wins’. Whether or not it was intended to be ironic, the statement faithfully reflects the popular perception that more is better and that success is measured in terms of money and the ability to consume. The sentiment is also reflected in the view adopted by mainstream neoclassical economics that utility depends on the amount of goods and services consumed: loosely speaking, people prefer more to less, and that the (desirable) efficiency of the economy is measured in terms of the goods and services available. While such a view has always found dissenters – among, for instance, moral philosophers and religious traditions, and among those who are concerned with the effects of consumerism on the environment and community – it has recently been found to be at variance which a large amount of data on the relationship between people’s self-reported happiness and their income and consumption. The pioneering contributions of Easterlin (1974, 1995, 2001), and subsequent work by Oswald (1997), Deiner and Oishi (2000) and Frey and Stutzer (2002), among others, suggest a number of empirical regularities. Time series data for individual countries do not reflect significant (and in some cases any) increases in the average level of self-reported happiness over time, despite significant increases in income and consumption. Panel data on specific individuals over their lives suggest that despite increases in income, these individuals usually do not show significant increases...

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