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I remember reading about a study that had measured GDP per capita (or a similar parameter) and average (self-reported?) happiness in a lot of countries. It was hypothesized that there's a limit where GDP per capita can't make you any happier, but it was found that the relation is logarithmic, as opposed to asymptotic. Unfortunately, I can't find any such study.

I've heard both arguments (asymptotic/logarithmic relation) in arguments in political discussion.

Is there a limit where GDP per capita (or a similar parameter) can not make a country happier?

Christian
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Klas
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  • There have been several books that make related claims (and the slightly more sophisticated claim that inequality at a high GDP is worse than equality at a lower GDP). [*The Spirit Level*](http://www.amazon.co.uk/Spirit-Level-Equality-Better-Everyone/dp/0241954290/ref=sr_1_1?ie=UTF8&qid=1326152991&sr=8-1) is one, [*Affluenza*](http://www.amazon.co.uk/Affluenza-Oliver-James/dp/0091900115/ref=sr_1_1?s=books&ie=UTF8&qid=1326153045&sr=1-1) is another. – matt_black Jan 09 '12 at 23:52
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    See here for a log-scale version of this chart. There don't appear to be many plateaus to me. http://www.economist.com/blogs/dailychart/2010/11/daily_chart_1 – John Lyon Jan 10 '12 at 04:28
  • @jozzas: That's the graph I had seen before. Thank you very much! – Klas Jan 10 '12 at 09:09
  • This doesn't answer the question, but here's a relevant TED talk on how income inequality harms societies: http://www.ted.com/talks/richard_wilkinson.html. It has a lot of interesting statistics to back up the claim. – Asaf Jan 10 '12 at 14:17
  • If you look at http://en.wikipedia.org/wiki/Satisfaction_with_Life_Index, you can see some countries with low GDP way up in the ranking (Bhutan, Costa Rica), and on the other hand high-GDP countries way down (Japan, S. Korea), also lot of mid-GDP ones almost at the top (Bahamas) and almost at the bottom (Russia, Ukraine). There seems to be some correlation, but it's not very strong. – vartec Jan 10 '12 at 15:15
  • Also strangely enough, countries who lead in life satisfaction ranking are way high in suicide rate ranking, which seems a bit contradictory: http://en.wikipedia.org/wiki/Suicide_rate – vartec Jan 10 '12 at 15:18
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    It's also true that GDP isn't necessarily a good index even of a country's material wealth. For example a good way someone to personally increase GDP is to get divorced, get cancer and wreck their car; all of those require expensive work from professionals, causing GDP to rise, but don't actually benefit anyone. – DJClayworth Jan 10 '12 at 16:11
  • @DJClayworth - I nominate you to head the Fed, or at least Treasury :) – user5341 Jan 10 '12 at 20:23
  • Also, GDP is not necessarily a good measurment - they are all denominated in $USD, and for a country with very low exchange rate that has self-sufficient economy, per-capita GDP is effectively a lie as far as living standards. An average person may be making $1/day, but decent cost of living is only $50/year. – user5341 Jan 10 '12 at 20:26
  • Also, see this research: http://www.noogenesis.com/pineapple/fisherman.html – user5341 Jan 10 '12 at 20:32
  • @DVK: The Economist article compared purchasing power parity, instead of GDP. – Klas Jan 11 '12 at 08:15
  • "Is there a limit where GDP per capita (or a similar parameter) can not make a country happier?" Surely that is false for both the logarithmic and asymptotic cases? Can we reword it: "Does a country's happiness approach a limit that can't be crossed as GDP is increased?" Maybe we should making it even stronger: "Are rich countries near a happiness limit that can't be crossed, even as GDP is increased?" – Oddthinking Apr 24 '12 at 23:31
  • This kind of question blurs the distinction between an individual and various groupings of individuals. It is possible to ask an individual if they are happy, or if more money would make them happier. How would one purport to do this with a group, or a nation, in a rational way? The question posed is vague because there is unlikely to be any agreement among classical economists, psychologists, sociologists, etc... on what it means for a group to be happy, and whether or how to measure that happiness. – Paul Apr 26 '12 at 08:44
  • @Klas Isn't the question better suited for http://cogsci.stackexchange.com/? – Piotr Migdal Apr 29 '12 at 11:54
  • one corollary from the economist article is that nature is the second most important factor for happiness. ( see Venezuela + Brazil) – Anno2001 Nov 03 '12 at 20:01
  • My answer to a related question might help you: http://skeptics.stackexchange.com/a/14033/1950 – Kip Dec 12 '12 at 19:39

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