The Conflictive Relationship between Satisfaction and Income

52 Pages Posted: 25 Apr 2011

See all articles by Eduardo A. Lora

Eduardo A. Lora

Inter-American Development Bank (IDB) - Research Department

Juan Camilo Chaparro

affiliation not provided to SSRN

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Date Written: November 2008

Abstract

Using the 2006 Gallup World Survey of life satisfaction in 130 countries, this paper finds a very solid relationship between satisfaction and income (both across and within countries) and uncovers the “unhappy growth paradox,” whereby faster growth rates are accompanied by lower levels of satisfaction. The losses of satisfaction associated with growth are more pronounced in the material domains of life and are greater in richer and more urban societies. At the individual level, although higher incomes tend to be reflected in greater satisfaction, an increase in the income of the social group to which an individual belongs has the opposite effect. The conflictive relationship between satisfaction and income has implications for political economy and may help explain various characteristics of economic and social populism.

Suggested Citation

Lora, Eduardo A. and Chaparro, Juan Camilo, The Conflictive Relationship between Satisfaction and Income (November 2008). IDB Working Paper No. 542, Available at SSRN: https://ssrn.com/abstract=1820930 or http://dx.doi.org/10.2139/ssrn.1820930

Eduardo A. Lora (Contact Author)

Inter-American Development Bank (IDB) - Research Department ( email )

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Juan Camilo Chaparro

affiliation not provided to SSRN

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