Year: 2005
Type: preprint
Abstract: The first aim of the paper is to provide a formal explanation for the happiness paradox, i.e. the fact that well-being in the advanced countries does not increase over time, or even declines, in spite of the rising trend of income, while people continue to strive for money. The second aim is to propose an economic approach which draws from psychology crucial arguments. Psychology, contrary to economics, stresses the crucial importance of close personal relationships as non-marketed goods for well-being by arguing that relatedness is a basic human need. Unfortunately, various indices show that close personal relationships in the advanced countries are deteriorating, which may reduce overall individual well-being. But why do people persist in devoting time and effort to making money rather than to improving their relationships? Authoritative psychologists argue that non-satisfaction of the need for relatedness during infancy makes a significant proportion of people less able to feel, to understand and to enjoy others, as well as being less affectively disposed towards others. This reaction originates outside consciousness, and it impairs the capacity to perceive signals from others and from the self to maximise well-being, whereas signals from the product market become relatively more attractive. This explains both the race for greater consumption and the deterioration of close personal relationships, and also, possibly, of overall individual wellbeing. JEL Code: A12, D01, I31, J22, O40
Author: Maurizio Pugno
Institution: University of Trento
Language: English
Subfield: Social Psychology
Field: Psychology
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1549751420