"I think exploration and adventure are essential to the happiness of every person, but I can't presume to present this as anything but my own opinion. Most people are pre-naturally more happy than I am, out the gate."

Easterlin offered an appealing resolution to his paradox, arguing that only relative income matters to happiness. Other explanations suggest a “hedonic treadmill,” in which we must keep consuming more just to stay at the same level of happiness. Either way, the policy implications of the Paradox are huge, as they suggest that economic growth may not raise well-being by much. Given the stakes in this debate, Betsey Stevenson and I thought it worth reassessing the evidence. We have re-analyzed all of the relevant post-war data, and also analyzed the particularly interesting new data from the Gallup World Poll. Last Thursday we presented our research at the latest Brookings Panel on Economic Activity, and we have arrived at a rather surprising conclusion: There is no Easterlin Paradox.

In recent years, cognitive scientists have turned in increasing numbers to the study of human happiness, and one of their central findings is that we are not very good at predicting how happy or unhappy something will make us. Given time, survivors of tragedies and traumas report themselves nearly as happy as they were before, and people who win the lottery or achieve lifelong dreams don't see any long-term increase in happiness.

Can money buy you happiness? Yes—so long as you spend the money on someone else. According to new research, giving other people even as little as $5 can lead to increased well-being for the giver.