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Edited by Luigino Bruni and Pier Luigi Porta
Chapter 14: The Subjective Well-being Paradox: A Suggested Solution Based on Relational Goods
14 The subjective well-being paradox: a suggested solution based on relational goods Maurizio Pugno* 1. Introduction ‘Subjective well-being’, often called happiness, is arousing increasing interest among economists and economic psychologists through resumed study of the Benthamite approach to utility (Ng 1978; Kahneman et al. 1999; Easterlin 2001; Frey and Stutzer 2002; Layard 2003; and symposia in the Economic Journal 1997, and in the Journal of Economic Behavior and Organization 2001).1 An underlying reason for this interest is that per capita income has increasingly become an overoptimistic proxy for well-being, especially in the aﬄuent economies. The most systematic evidence on this problem is provided by survey research on self-reported happiness (Veenhoven 1994). Further signiﬁcant and more dramatic evidence emerges from the proliferation of speciﬁc forms of malaise such as mental depression and suicides. A ‘subjective well-being paradox’ can be more precisely identiﬁed in the richest countries during recent decades. Let us ﬁrst deﬁne ‘subjective wellbeing’ (SWB) as including both a cognitive judgement on satisfaction with one’s current life, and one’s prevalent aﬀective state. A paradox arises because the various indices of SWB exhibit little improvement or even deterioration, while per capita income, which is the main proxy for material well-being, displays a deﬁnite rising trend. The paradox is heightened by the fact that the inability of income to yield SWB has not substantially discouraged individuals from supplying their labour. In other words, technical progress is, by and large, not used to achieve more...
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