Revisiting The Easterlin Paradox: What Can We Learn from It?

This paper examines the Easterlin paradox using empirical and simulated data. The results reveal that the existence of Easterlin paradox could be just due to the rating scale of happiness measurement. The rating scale measurement of self-reported happiness limits the variation of happiness of time s...

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Main Author: Lim, Hock Eam
Format: Article
Language:English
Published: UUM Press 2019
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Online Access:https://repo.uum.edu.my/id/eprint/30101/1/JES%2001%2001%202019%2022-30.pdf
https://repo.uum.edu.my/id/eprint/30101/
https://e-journal.uum.edu.my/index.php/jes/article/view/12534
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Institution: Universiti Utara Malaysia
Language: English
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spelling my.uum.repo.301012023-11-30T08:19:00Z https://repo.uum.edu.my/id/eprint/30101/ Revisiting The Easterlin Paradox: What Can We Learn from It? Lim, Hock Eam HC Economic History and Conditions This paper examines the Easterlin paradox using empirical and simulated data. The results reveal that the existence of Easterlin paradox could be just due to the rating scale of happiness measurement. The rating scale measurement of self-reported happiness limits the variation of happiness of time series data due to the averaging effect compared to the happiness variation of cross-sectional data. Mathematically, the low variation of happiness can lead to the Easterlin paradox: cross-sectional effects of income on happiness are significant but turn into insignificant for time series happiness. The result of simulated data without the scale of happiness measurement, i.e., the underlying happiness, shows that the effects of income on happiness are significant at cross-sectional and time series data. Nevertheless, once the limited scale of happiness measurement, i.e., the self-reported happiness, is used, the income effect is significant only at cross-sectional data. Thus, the low variation in scale of measurement can be the cause of the Easterlin paradox. What we can learn is: the limited scale of happiness measurement produces the Easterlin paradox, and the happiness measurement needs to be revised to ensure the variation in happiness could be captured adequately. UUM Press 2019 Article PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/30101/1/JES%2001%2001%202019%2022-30.pdf Lim, Hock Eam (2019) Revisiting The Easterlin Paradox: What Can We Learn from It? Journal of Economics and Sustainability (JES), 1 (1). pp. 22-30. ISSN 2637-1294 https://e-journal.uum.edu.my/index.php/jes/article/view/12534
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
language English
topic HC Economic History and Conditions
spellingShingle HC Economic History and Conditions
Lim, Hock Eam
Revisiting The Easterlin Paradox: What Can We Learn from It?
description This paper examines the Easterlin paradox using empirical and simulated data. The results reveal that the existence of Easterlin paradox could be just due to the rating scale of happiness measurement. The rating scale measurement of self-reported happiness limits the variation of happiness of time series data due to the averaging effect compared to the happiness variation of cross-sectional data. Mathematically, the low variation of happiness can lead to the Easterlin paradox: cross-sectional effects of income on happiness are significant but turn into insignificant for time series happiness. The result of simulated data without the scale of happiness measurement, i.e., the underlying happiness, shows that the effects of income on happiness are significant at cross-sectional and time series data. Nevertheless, once the limited scale of happiness measurement, i.e., the self-reported happiness, is used, the income effect is significant only at cross-sectional data. Thus, the low variation in scale of measurement can be the cause of the Easterlin paradox. What we can learn is: the limited scale of happiness measurement produces the Easterlin paradox, and the happiness measurement needs to be revised to ensure the variation in happiness could be captured adequately.
format Article
author Lim, Hock Eam
author_facet Lim, Hock Eam
author_sort Lim, Hock Eam
title Revisiting The Easterlin Paradox: What Can We Learn from It?
title_short Revisiting The Easterlin Paradox: What Can We Learn from It?
title_full Revisiting The Easterlin Paradox: What Can We Learn from It?
title_fullStr Revisiting The Easterlin Paradox: What Can We Learn from It?
title_full_unstemmed Revisiting The Easterlin Paradox: What Can We Learn from It?
title_sort revisiting the easterlin paradox: what can we learn from it?
publisher UUM Press
publishDate 2019
url https://repo.uum.edu.my/id/eprint/30101/1/JES%2001%2001%202019%2022-30.pdf
https://repo.uum.edu.my/id/eprint/30101/
https://e-journal.uum.edu.my/index.php/jes/article/view/12534
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