Does Growth Cause Happiness, or Does Happiness Cause Growth?

Abstract

The happiness L I I Z~

Does Development Make You Happy? Subjective Wellbeing And Economic Growth In Developing Countries

“…All three low income countries in the sample saw a positive income-SWB relationship -although this is very sparse data which does not allow for properly testing the role of non-income factors. A 1975 cross-country poll reported in Kenny (1999) suggested that there was a significant relationship between income and SWB below a $1000 GNP per capita, and the evidence presented here suggests no reason to lower that barrier (even while the data presented on Tanzania and Calcutta suggests relative and non-income concerns are significant even in the poorest countries). Nonetheless, if improvements in SWB are taken to be a good measure of utility, and increasing utility is the purpose of development, the results suggest that many countries currently considered developing have developed quite enough.…”

“…In a recent paper (Kenny, 1999), I found a relationship between economic growth over time within a country and SWB in that country that was not significant in a number of different formulations in a sample of wealthy countries. 3 This confirmed earlier results based on different techniques and samples by (amongst others) Veenhoven (1994) and Easterlin (1995).…”

“…However, the correlation is weak even thensplitting the sample between rich and poor countries removes the significance of the relationship (Kenny, 1999), and such evidence has many flaws (see Ahuvia and Friedman, 1998;Kenny, 1999;Diener and Oishi, 2000). As we have seen from evidence on measures of quality of life, that income across countries at a single point is correlated with a factor does not necessarily mean that growth in income is correlated with growth in that factor within a country over time.…”

“…It will be to take average SWB and GNP per capita scores for different years within a single country and to calculate the correlation coefficients between changes in one variable and the other within that country. 14 The second method (similar to one employed in Kenny, 1999) will use ordinary least squares regression analysis with SWB as the dependent variable and growth as the independent variable, with fixed effects for each country but a common SUBJECTIVE WELLBEING AND ECONOMIC GROWTH coefficient for growth. Using this method, we will also be able to add a time dummy to see if the growth effect can be separated out from the impact of other variables possibly related to SWB that have also improved over time.…”

“…But in terms of average life expectancy, Mozambique's was 62% of the United States', and China's was 91%. Going 1.6% of the distance between Mozambique and United States in terms of wealth, so reaching China's income, we move 76% of the distance in terms of life expectancy (Kenny, 1999).…”