(=0.006/0.020), which both falsifies the null hypothesis of no positive relationship and is roughly consistent with the
magnitudes seen in our within- and between-country assessments.
To further examine these patterns, Table 4 formalizes our findings with a series of panel regressions exploiting all
of the Eurobarometer Survey observations across all countries; the top panel analyzes life satisfaction and the bottom
panel happiness. (Due to the very limited happiness data available, estimates in the bottom panel are extremely
imprecise.) As with our panel analysis of the World Values Survey, we begin by including no fixed effects and
subsequently add in country fixed effects and then both country and year fixed effects. The latter two estimates focus on
the time series relationship between satisfaction and GDP and yield coefficients of about 0.2.
The last two rows of each panel attempt to minimize the potential influence of high-frequency variation, by
averaging well-being and GDP over five-year periods, or over entire decades. These first-difference regressions yield
somewhat larger estimates for life satisfaction, although the decadal differences are imprecisely estimated. Because
happiness was only included in the early years of the survey there are many fewer observations yielding extremely
imprecise estimates. Nonetheless, in all cases the estimated coefficients are positive, in some specifications we can falsify
the null hypothesis that the well-being-GDP gradient is zero, and in no case can we falsify that it is 0.4.
Japan
Arguably the most persuasive evidence in favor of the Easterlin paradox has come from Japan, which provides a
striking case study both because of its dramatic growth in the postwar period (real GDP has risen by a factor of six since
World War II), and because it was believed that consistent data on subjective well-being had been continuously collected
by the government since 1958 in the “Life in Nation” surveys. Previous researchers have analyzed the simple summary of
these questions provided by Veenhoven (1993), observing that average levels of well-being had remained flat even in the
face of this spectacular growth (Easterlin, 1995, pp. 39-40). 31
Upon closer inspection, however, these Japanese data are neither as persuasive as many thought, nor is the trend
flat. We returned to the original codebooks and had the questions translated.32 This exercise was quite revealing,
suggesting several important series breaks. Accounting for these breaks yields a very different perspective. We provide a
full accounting in Table 5, which shows both the literal and idiomatic translations of the survey questions as they have
changed.
Three important findings emerge from this table. First, in 1964 the response categories changed dramatically. The
top category was changed from the catch-all “Although I am not innumerably satisfied, I am generally satisfied with life
now” to the more demanding “Completely satisfied.” Not surprisingly, the proportion reporting their well-being in this
31 For instance, he notes that “Between 1958 and 1987 real per capita income in Japan multiplied a staggering five-fold, propelling
Japan to a living level equal to about two-thirds that of the United States.... Despite this unprecedented three decade advance in level
of living, there was no improvement in mean subjective well-being.” These observations have been cited approvingly by Layard
(2005a), Frank (2005), and Kahneman and coauthors (2006), among dozens of others.
32 We thank Michael L. Woodford for his patient assistance with these translations.
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