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Wednesday, October 05, 2005


Andrew Leigh

Interesting stuff. Three thoughts on this.
1. The relationship is almost linear when you use a log scale. We think of growth in percentage terms, so I'm bewildered as to why anyone who thought about the issue for more than 5 minutes would use a dollar scale on the X axis.
2. A paper in ReStat a few years back (http://www2.warwick.ac.uk/fac/soc/economics/research/papers/twerp615.pdf) showed that on average, within-country income growth makes people happier. Americans love just talking about America, but if you want to understand the issue, it helps to look at more than one country.
3. Much of this discussion ignores life expectancy. Even if you thought that point #2 was wrong, and that more income made us no happier, surely the positive relationship between income and life expectancy would mean that income led to more happiness over a lifetime.

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