Loveofmoneyisrootofallprosperity Fr Ojs2 Index Php Rsp Issue View Phoenix Plane Happiness Finding Happiness Life Happiness Happiness Quotes Happiness Richard Layard Money Make You Happy Happiness Layard Can Buy Happiness Money Makes You Happy Money Happy The happiness–income paradox revisited

In fact, life satisfaction and happiness typically move together over time not in different directions and they do so in conjunction with democratization. As a striking example, consider the experience of South Africa when democracy was established there. In May 1994, 1 mo after the country's first democratic election, a survey was conducted that included questions about both happiness and life satisfaction. Table 1 presents for both measures the percentage of the black population in the top two (out of five) categories at that time and the corresponding percentage at the two adjacent dates when similar surveys were conducted. Note how by both measures the well-being of blacks soared at the time of the election. But as noted sociologist Valerie Møller, who kindly provided these data, observes: “[P]ost-election euphoria was short lived. Satisfaction levels have since returned to ones reminiscent of those under the former regime.” (23) This return is registered by both SWB measures. Moreover, the magnitude of rise and fall is virtually identical for the two measures. This is striking evidence, indeed, of the tendency for happiness and life satisfaction to move together, not differently.

The third and most serious critique, based on time series data, is in a 2008 article by Stevenson and Wolfers (24). The main problem with the Stevenson and Wolfers (S-W) analysis is that they, in fact, estimate a positive short-term relationship between life satisfaction and GDP, rather than the long-term relationship, which is nil. That life satisfaction and GDP tend to vary together in contractions and expansions has already been demonstrated for a group of developed countries (25), and microlevel evidence consistently shows that unemployment has one of the most negative impacts on happiness (4, 8, 10). Before proceeding to further discussion of S-W, we expand here this finding of the short-term relationship to the developing and transition countries.

We return to the Latin American data of Fig. 1, the best for the short-term analysis of developing countries because it is yearly (26). For both financial satisfaction and GDP we fit OLS trend lines over the full time span available for each country and then compute the deviation at each date of the actual value from the trend value. Pooling the deviations for all 17 countries, we find that when GDP is above trend, financial satisfaction tends to be above trend; when GDP is below trend, financial satisfaction tends to be below—in short that the deviations for FS and GDP are significantly positively related (Fig. 3).

Moreover, the deviations exhibit a synchronous movement in the 17 countries; in a year when one country is below trend, almost all of the others are. We therefore compute for both financial satisfaction and GDP the mean of the deviations for the 17 countries in each year. The GDP time series of mean deviations exhibits a clear pattern of collapse and recovery over the period, reflecting, in fact, the world crisis precipitated by the Asian financial crisis of 1997, which was followed by a 1998 Russian crisis (Fig. 4). The latter especially affected commodity prices and had a great impact throughout Latin America. What is noteworthy is that the financial satisfaction time series of mean deviations exhibits a similar movement to GDP of collapse and recovery. Note that if one analyzes only the period 1998–2003 or 2003–2006, one concludes that happiness and income move together. But if one considers the entire period of contraction and expansion, as we do above in Fig. 1, the happiness–income relation is nil. Clearly in this group of developing countries financial satisfaction and GDP are positively related in the short term, but, as seen in the analysis in Fig. 1, not in the long term.

For the transition countries, we present time series of life satisfaction and GDP for three of the countries for which the data encompass the onset of the transition (Fig. 5). The pattern is clearly like that in Fig. 4, a positive relationship in the short term. The timing of the two series is closest for the GDR, where we have annual data for both series. For Estonia and the Russian Federation, for which only intermittent life satisfaction data are available, one finds both life satisfaction and GDP with a similar V-shaped pattern. If the GDP observations are confined to those for which life satisfaction is also available, the timing pattern becomes even more similar. This synchronous V-shaped movement of both life satisfaction and GDP is typical of the transition countries for which data encompassing the onset of transition are available, but if trend lines are fitted that span both the contraction and expansion periods, we find that the long-term relationship is nil (as discussed in connection with Fig. 2), in contrast to the short-term positive relationship (27). Some analysts, who use data that do not include the contraction phase, mistakenly take the positive happiness–income relation during the expansion as indicative of the long-term trend.

To return to the Stevenson and Wolfers analysis, based on a regression analysis of data from the WVS source we use here in Fig. 2, S-W report a positive relation between the change in life satisfaction and the growth rate of GDP. (We focus on their life satisfaction analysis, not happiness. As explained above, there is reason to believe the WVS happiness data are biased upward due to a statistical artifact). Specifically, Stevenson and Wolfers report the results of three “short first differences” and three “long first differences” regressions (ref. 24, pp. 39–41). The 5–6 y time spans of the former are too brief to identify the long-term relation between life satisfaction and GDP. (This is much like taking for analysis either the contraction or expansion periods of Fig. 4). Of the remaining three regressions, only two have a statistically significant positive coefficient. The first (based on observations for 32 countries) is due to the inclusion chiefly of the recovery phase in 11 transition countries, rather than the complete collapse and recovery of life satisfaction and GDP in these countries (illustrated for three of the countries in Fig. 5 nLoveofmoneyisrootofallprosperity Fr Ojs2 Index Php Rsp Issue View Phoenix Plane Happiness Finding Happiness Life Happiness Happiness Quotes Happiness Richard Layard Money Make You Happy Happiness Layard Can Buy Happiness Money Makes You Happy Money Happy The happiness–income paradox revisitedj j Happiness yLoveofmoneyisrootofallprosperity Fr Ojs2 Index Php Rsp Issue View Phoenix Plane Happiness Finding Happiness Life Happiness Happiness Quotes Happiness Richard Layard Money Make You Happy Happiness Layard Can Buy Happiness Money Makes You Happy Money Happy The happiness–income paradox revisitedi Happiness Finding Happiness Life Happiness Happiness Quotes Happiness Richard Layard Money Make You Happy Happiness Layard Can Buy Happiness Money Makes You Happy Money Happy