Three years of COVID-19 and life satisfaction in Europe: A macro view.

Every country in Europe experienced an adverse impact from the COVID-19 pandemic on life satisfaction, though on average, satisfaction with life in the summer of 2022 is about the same as the pre-pandemic value in the autumn of 2019. Typically, an upsurge in the severity of the pandemic (measured by the number of COVID-related deaths) is associated with declining life satisfaction and an ebbing, with increasing life satisfaction. Of the three waves of the pandemic between March 2020 and the autumn of 2022, the most severe impact typically occurred in 2021 during the second wave; in the third wave, the response declined due to the spread of effective vaccines and the takeover of omicron variants.

Explaining happiness trends in Europe.

In Europe, differences among countries in the overall change in happiness since the early 1980s have been due chiefly to the generosity of welfare state programs-increasing happiness going with increasing generosity and declining happiness with declining generosity. This is the principal conclusion from a time-series study of 10 Northern, Western, and Southern European countries with the requisite data. In the present study, cross-section analysis of recent data gives a misleading impression that economic growth, social capital, and/or quality of the environment are driving happiness trends, but in the long-term, time-series data, these variables have no relation to happiness.

China's life satisfaction, 1990-2010.

Despite its unprecedented growth in output per capita in the last two decades, China has essentially followed the life satisfaction trajectory of the central and eastern European transition countries--a U-shaped swing and a nil or declining trend. There is no evidence of an increase in life satisfaction of the magnitude that might have been expected to result from the fourfold improvement in the level of per capita consumption that has occurred. As in the European countries, in China the trend and U-shaped pattern appear to be related to a pronounced rise in unemployment followed by a mild decline, and an accompanying dissolution of the social safety net along with growing income inequality. The burden of worsening life satisfaction in China has fallen chiefly on the lowest socioeconomic groups. An initially highly egalitarian distribution of life satisfaction has been replaced by an increasingly unequal one, with decreasing life satisfaction in persons in the bottom third of the income distribution and increasing life satisfaction in those in the top third.

The happiness-income paradox revisited.

The striking thing about the happiness-income paradox is that over the long-term--usually a period of 10 y or more--happiness does not increase as a country's income rises. Heretofore the evidence for this was limited to developed countries. This article presents evidence that the long term nil relationship between happiness and income holds also for a number of developing countries, the eastern European countries transitioning from socialism to capitalism, and an even wider sample of developed countries than previously studied. It also finds that in the short-term in all three groups of countries, happiness and income go together, i.e., happiness tends to fall in economic contractions and rise in expansions. Recent critiques of the paradox, claiming the time series relationship between happiness and income is positive, are the result either of a statistical artifact or a confusion of the short-term relationship with the long-term one.

Explaining happiness.

What do social survey data tell us about the determinants of happiness? First, that the psychologists' setpoint model is questionable. Life events in the nonpecuniary domain, such as marriage, divorce, and serious disability, have a lasting effect on happiness, and do not simply deflect the average person temporarily above or below a setpoint given by genetics and personality. Second, mainstream economists' inference that in the pecuniary domain "more is better," based on revealed preference theory, is problematic. An increase in income, and thus in the goods at one's disposal, does not bring with it a lasting increase in happiness because of the negative effect on utility of hedonic adaptation and social comparison. A better theory of happiness builds on the evidence that adaptation and social comparison affect utility less in the nonpecuniary than pecuniary domains. Because individuals fail to anticipate the extent to which adaptation and social comparison undermine expected utility in the pecuniary domain, they allocate an excessive amount of time to pecuniary goals, and shortchange nonpecuniary ends such as family life and health, reducing their happiness. There is need to devise policies that will yield better-informed individual preferences, and thereby increase individual and societal well-being.