Does Being Well-Off Make Us Happier? Problems of Measurement

Abstract

The article uses General Social Survey data (GSS) collected by Statistics Canada from 1986 to 2005 and experience sampling data (ESM) collected in 1985 and 2003 at the University of Waterloo to examine relationships between economic growth, household income, and subjective sense of well-being. The article puts to a test two propositions made by Easterlin (Nations and households in economic growth: Essays in Honor of Moses Abramovitz. Academic Press, New York, NY,1974), namely that personal and household incomes correlate positively with subjective well-being, but this does not apply to the relationship between subjective well-being and societal economic growth. Analyses of GSS data reported in this article support Easterlin's findings. They show that higher household incomes correlate positively with respondents' retrospective assessments of life satisfaction, but economic growth has not been accompanied by a corresponding rise of subjective well-being. Analyses of ESM data suggest that when relationships between household income and subjective well-being are measured by "experiential" measures (Csikszentmihalyi and Larson in J Nerv Ment Dis 175: 526-537, 1987), these relationships are not statistically significant and subjective valuations of well-being taper off at the top of the income pyramid. © 2012 Springer Science+Business Media B.V.