David Leonhardt's column yesterday discusses a new paper by Wolpers and Stevenson that claims to debunk the Easterlin paradox. The paradox was that despite an association between income and reported happiness in cross-sectional data, in the time series big increases in income did not increase average reported happiness. An obvious interpretation is that people care about relative, not absolute, income. I have to get the paper, but from Leonhardt's account, I wonder if it answers what to me is the larger point of Easterlin and Easterlin-spawned work: that relative income matters.
The column includes a graph that shows a positive correlation between income and happiness across countries. What I want to know - I have to get the paper - is , granting that the correlation is positive for a particular country's time series, not zero, as Easterlin found, whether the correlation in a cross-section is stronger than in the time series - whether relative income matters at all. The idea that only relative income matters, that absolute income matters not at all, was never very plausible.
Got to go: I'm bitter and angry and dodging sniper fire, can't seem to find my flag lapel pin, trying to find a weatherman to see which way the wind blows, and damn if isn't Spring in poor old Northwest Ohio!