By- Harshita Sharma
Can money buy happiness? Is every rich person happy and every poor person unhappy? If we assume this assertion to be true then the possible reason behind it could be that due to poverty people cannot afford the basic necessities of life like good food, shelter and healthcare facilities which reduces their life expectancy and increase their chances of acquiring diseases. With no proper sex education they have large families and supporting them is a huge task for the poor, which could also be one of the reasons for their unhappiness. On the contrary if it is true the other way round and we assume that the poor people are happier than the richer ones then the possible explanation for that could be that the poor lead a much calmer and peaceful life as they don’t face the stress of a job or the tension of getting good marks in school.
The Easterlin Paradox is a key concept in happiness economics. It is named by the economist and USC professor Richard Easterlin. According to the Easterlin within a society, rich people tend to be much happier than poor people but, rich societies tend not to be happier than poor societies and as countries get richer they do not get happier. This could possibly be because life satisfaction does rise with average incomes but only up to a point. Beyond that the marginal gain in happiness declines.
However In “The New Stylized Facts about Income and Subjective Well-Being” Daniel W. Sacks, Betsey Stevenson, and Justin Wolfers offer a compact and readable summary of the evidence that income is not just relative–and so more income does increase happiness There is a continuous debate about whether income is an accurate and effective measure of our well-being. However it cannot be ruled out that income is indeed a very important factor amongst the many factors that influence how satisfied we are with our lives.