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.

Discussion Paper 2005 n.1 del Dipartimento di Economia dell'Universita' di Trento

By Prof. Maurizio Pugno

Summary:

•Abstract - Introduction

•The empirical relevance of the well-being paradox

•An alternative explanation and the supporting literature

•The shift from relational goods to market goods

•The formal model

•The experienced quality of the relational good, and personal disposition

•Aggregate dynamics through generations

•Conclusions

•Appendix

•References