Case Summary

Richard Easterlin, a U.S. economist, attempted to suggest that wealth is not a prerequisite to happiness. The suggestion was in response to a widely discussed debate, about the role of monetary wealth to the general happiness of citizens of any country. In his contribution to this topic, Richard suggested that rich countries are not generally happier than the developing countries and that increase in wealth does not translate to increase in happiness. Richard explained that it is not about how much a person earns but rather how their earnings are comparable to those of his peers. However, Betsey Stevenson and Justin Wolfers disagreed with Easterlin's view saying that the increase in wealth leads to an increase in happiness (Gómez-Mejía, Balkin & Cardy, 2016). Their conclusion was based on a study conducted in the U.S where most families that earn high income admitted to being happy while fewer families that earn relatively low income admitted to being happy. In as much as Richard Easterlin agreed to this new research, he also suggested that people in rich countries are not necessarily happy due to wealth, but because their governments pay more attention to issues affecting them directly, giving an example of Denmark