More research is needed but the current research doesn’t really support the comparison explanation.
I think you’re over-interpreting the results of a single (and as far as I’m aware as-yet-non-peer-reviewed) paper.
Cross-country studies are suggestive, but as far as I’m concerned the real action is in micro data (and especially in panel studies tracking the same individuals over extended periods of time). These have pretty consistently found evidence of comparison effects in developed countries. (The state of play is a little more complicated for transition and developing countries.)
A good overview is:
Clark, Frijters and Shields (2008) “Relative Income, Happiness, and Utility” Journal of Economic Literature 46(1): 95-144. (Earlier version on SSRN here)
For what it’s worth, my read of the micro data is that it generally doesn’t support the “money doesn’t make people happy” hypothesis either. Money does matter, though in many cases rather less than some other life outcomes.
My claim would be that if the poorest country in the world could be brought up to the standard of living of the US and the rest of the world could have its standard of living increased so as to maintain the same relative inequality, then (to a first approximation) every individual in the world would find their happiness either increased or unchanged. I don’t know if anyone would go so far as to claim otherwise but it sometimes seems that some people would dispute that claim.
I think you’re over-interpreting the results of a single (and as far as I’m aware as-yet-non-peer-reviewed) paper.
Cross-country studies are suggestive, but as far as I’m concerned the real action is in micro data (and especially in panel studies tracking the same individuals over extended periods of time). These have pretty consistently found evidence of comparison effects in developed countries. (The state of play is a little more complicated for transition and developing countries.)
A good overview is:
Clark, Frijters and Shields (2008) “Relative Income, Happiness, and Utility” Journal of Economic Literature 46(1): 95-144. (Earlier version on SSRN here)
For what it’s worth, my read of the micro data is that it generally doesn’t support the “money doesn’t make people happy” hypothesis either. Money does matter, though in many cases rather less than some other life outcomes.
My claim would be that if the poorest country in the world could be brought up to the standard of living of the US and the rest of the world could have its standard of living increased so as to maintain the same relative inequality, then (to a first approximation) every individual in the world would find their happiness either increased or unchanged. I don’t know if anyone would go so far as to claim otherwise but it sometimes seems that some people would dispute that claim.
Agreed.