A recent paper by Daniel Sacks, Betsey Stevenson and Justin Wolfers suggests that Easterlin and his followers got it wrong. After poring over data from 140 countries, they concluded that rich people are happier than poor people, people in rich countries are happier than people in poor countries and when countries get richer their people tend to get happier. Therefore, it appears that the happiness effect isn’t relative; it is based on a person’s absolute income..
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