Scitovsky and the Income-Happiness Paradox
University of Cassino, Italy, Department of Economic Sciences, Working Paper No. 7/2011
23 Pages Posted: 16 Dec 2011
Date Written: December 16, 2011
The recent debate on happiness in economics has revived interest in Scitovsky's 1976 book The Joyless Economy, which aims at explaining the income-happiness paradox, i.e. 'why [American] unprecedented and fast-growing prosperity had left its beneficiaries unsatisfied.' A dynamic economic model will distil Scitovsky's proposal, which has not yet been integrated into conventional economics. It will show that people's dissatisfaction may be due to their excess of demand for `comfort', which requires consumption goods, and to their lack in pursuing `creative activities', which instead essentially require leisure and a skill, called `leisure skill', that people have failed to develop. Since comfort includes comparing consumption with that of others, Scitovsky also strengthened the conventional solution of the paradox.
Keywords: Scitovsky, income-happiness paradox, comfort, creative activities, leisure skill
JEL Classification: A12, D60, J24, Z10
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