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Social Indicators Research

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30-03-2018

The Easterlin Paradox in Italy, or the Paradox in Measuring? Define Happiness Before Investigating It

Authors: Fabrizio Antolini, Biagio Simonetti

Published in: Social Indicators Research | Issue 1-2/2019

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Abstract

The Easterlin paradox (Easterlin, in: Paul, Reder (eds) Nations and household in economic growth: essay in honor of Moses Abramovitz, Academic Press, New York, 1974), for many researchers, is the starting point of studies on the relationship between happiness and GDP and states that after reaching a certain level of income, happiness decreases instead of increasing. The Comparison Theory (Schyns in Soc Indic Res 43:3–2, 1998) and Van Praag and Kapteyn’s (Eur Econ Rev 4(1):33–62, 1973) also show that if an individual’s income increases, it is not related into an increase in income satisfaction and the same mechanism applies to happiness, depending on several aspects. Today and in the future not only the growth of income but also the achievement of happiness have become a political objective and politicians will direct their policy towards these objectives. Furthermore, the interpretation of the relation between GDP and happiness remains one of the most recurring controversial errors in the framework and methodology used, although understanding of what makes people happy helps politicians to direct their policies. In Italy the Easterlin paradox seems to have found confirmation, but not a historical explanation also because the study of the relation between GDP and happiness, confirming the need to use appropriate indicators in the study of the relationship between economic development and happiness, for instance alternative national accounts indicators for GDP, or antidepressant expenditure for (un)happiness. The paper suggests “to define happiness before investigating it”, proposing a definition of happiness that also indicates an appropriate methodology to analyze if people can be happy in the economic system.

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For further insights, see European System of Accounts (SNA par. 1.18 and par. 1.46).

The standard economic model of human behavior includes three traits: unbounded rationality, unbounded willpower and unbounded selfishness.

Happiness as a value, come from World Data Base of Happiness, Erasmus University of Rotterdam; see also Veenhoven (2002, 2012b).

The considerations expressed here may change if you consider the period 2009–2012, because the unemployment rate increases twice.

We must remind that in Italy the survey on the quality of life of people, conducted by Istat, does not consider happiness as its component, which we find partially.

Very satisfied = 4; fairly satisfied = 3; not very satisfied = 2; not at all satisfied = 1; the marking has been reformulated and is included in the same database. About the validity of the measurement of happiness proposed see Veenhoven (2012a), Diener (1994), Lucas et al. (1996), Helliwell and Wang (2012).

Keep in mind how the passage from individual data to aggregated data may produce Simpson’s Paradox. Notwithstanding these observations, the results of the answers to the questions asked on satisfaction or happiness, in the main surveys does not change the country rankings in a remarkable way (Helliwell et al. 2012).

One area of positive psychology analyzes subjective well-being (SWB) and people's cognitive and affective evaluations of their lives.

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Title: The Easterlin Paradox in Italy, or the Paradox in Measuring? Define Happiness Before Investigating It
Authors: Fabrizio Antolini
Biagio Simonetti
Publication date: 30-03-2018
Publisher: Springer Netherlands
Published in: Social Indicators Research / Issue 1-2/2019
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-018-1890-7

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