Cognitive Scaffold

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MENTAL MODEL · M2669

Easterlin Paradox

Easterlin Paradox
BusinessHigh supportEconomics
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

Within a country, the rich are generally happier than the poor; however, in cross-national comparisons or over time, once a country's per capita income exceeds the subsistence level, average happiness does not significantly increase with GDP growth. -

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

The relativity of happiness. - Why do we get richer but not feel happier? Because happiness stems from relative status (being richer than the neighbor), not absolute wealth. This reminds us that after meeting basic survival needs, the marginal utility of pursuing wealth drops sharply; at that point, resources should be directed to 'non-competitive' areas (such as health, family, hobbies), because happiness in these areas is less susceptible to comparison.

anchor

Anchor fast decisions

Easterlin (1974) found that within a cross-section, income and happiness are positively correlated, but over time or across countries, once income exceeds a threshold, happiness does not rise with GDP—because happiness is anchored to 'relative income' and 'hedonic adaptation', and the marginal utility of absolute wealth drops sharply.

MINIMUM ACTION

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Easterlin_paradoxZH · Explicit
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