Academic special session, with Filka Sekulova, Christopher Boyce, and Martin Fritz
Interest in subjective well-being in public policy has been growing steadily over the last decades arriving at a voluminous and thematically diverse literature. A reoccurring theme for debates is the extent to which short and long-term income growth relates to well-being. Although many studies have shown that income growth at the societal level contributes little, if any, to well-being over time (Brockmann 2009, Clark et al. 2008, Di Tella and MacCulloch 2006, Blanchflower and Oswald 2004, Gardner and Oswald 2001, Easterlin 1974) others maintain that income growth does contribute meaningfully to well-being (Sacks et al. 2012). Nevertheless, a consistent significant positive causal relationship between income and happiness growth in a country over time is difficult to find (Easterlin 2012). A slightly different picture emerges when individual income and well-being is considered. Research consistently suggests that income changes may have some influence on well-being (Ferrer-i-Carbonell & Frijters, 2004; Kahneman & Deaton, 2010; Layard, Mayraz, & Nickell, 2008). However, the magnitude of this effect is often found to be small owing to psychological tendencies to adapt (Di Tella, Haisken-De New, & MacCulloch, 2010) and/or compare (Clark et al. 2008).