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Robert Frank on Income and Happiness

Geoff Riley

9th March 2008

One of my favourite authors, the 'Economic Naturalist', Robert Frank writes about real incomes and happiness in today's New York Times. He makes the point that “findings suggest that relative income is a much better predictor of well-being than absolute income" and the article is excellent for students wanting to know a little more about the problems in adjusting for price changes in the economy when trying to capture real improvements in living standards. “Since the mid-1970s, however, income growth has been confined almost entirely to top earners. Changes in per-capita G.D.P., which track only changes in average income, are completely silent about the effects of this shift. A society that aspires to improve needs a better measure of what counts as progress."See: Income and Happiness: An Imperfect Link

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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