In economics, what is ‘Easterlin paradox’?

  • This refers to the paradoxical relationship between the growth in the GDP of a country and the level of happiness enjoyed by its people.
  • It is named after American economist Richard Easterlin who proposed the concept in his 1971 paper “Does Economic Growth Improve the Human Lot? Some Empirical Evidence”.
  • Easterlin argued that an increase in the GDP of a country did not always lead its citizens to become happier people as the marginal gain in happiness begins to decrease beyond a particular point.
  • Critics, on the other hand, have contested the paradox saying that richer countries are generally happier than poorer ones.


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