Easterlin's research primarily focused on comparing income levels and reported happiness within and between countries over time. He found that while within a single country, people with higher incomes tend to report higher levels of happiness, this correlation does not hold when comparing different countries or when observing changes in income over time within a single country.
Several explanations have been proposed for the Easterlin Paradox. One is the idea of relative income and social comparison, where individuals judge their well-being based on their income relative to others in their society rather than absolute income levels. As a result, even if everyone's income rises, people may not feel happier if their relative position remains the same.
Additionally, adaptation and aspiration theory suggest that as people become accustomed to higher income levels, their aspirations and desires also increase, leading to a constant pursuit of more wealth without experiencing a proportional increase in happiness.
Furthermore, non-material factors such as social relationships, health, and personal fulfillment play significant roles in determining overall well-being, often outweighing the impact of income.
Despite criticisms and ongoing debates, the Easterlin Paradox has implications for policymakers, highlighting the limitations of focusing solely on economic growth as a means to improve societal well-being. Instead, it suggests the importance of considering broader measures of prosperity and quality of life beyond income alone.
