The Wealth (and Happiness) of Nations

Clive Crook has an insightful post up about an Aspen session on the economics of happiness. The two panelists from this discussion, Justin Wolfers and Robert Frank, have both given a lot of thought to the age-old question of whether rich people truly have better lives than poor people do. 

The Ideas ReportWolfers, a Wharton professor with an Australian accent and surfer-style blond hair, certainly seems like someone who should be an expert on happiness. And he has solid data to back up his claims: His research indicates that money really does correlate with well-being, not just for individuals but for entire countries. 

Frank, a professor at Cornell's MBA program, refuses to see things so simply. He insists that status makes a difference -- moving from a poor nation to a rich one isn't a ticket to happiness if it means suddenly having much less than the people around you.

Crook is convinced by Wolfers' rebuttal: If relative wealth mattered so much, Americans would be rushing south across the Mexican border. Instead, Mexicans are flocking to America -- even when that means becoming the poorest people in their new society. This thought experiment, coupled with the data he goes on to present, seems to prove that rich countries are simply happier.

Later, though, Wolfers's conclusion is challenged by an audience question from Dalia Mogahed, an Egyptian-American scholar who heads the Gallup Center for Muslim Studies. As Mogahed points out, the economies of Egypt and Tunisia have been growing faster than those of other Arab countries. And yet, after the events of last winter, it would be hard to argue that the those countries were becoming happier. 

This question gives Frank a chance to repeat his basic point: When people know they aren't as rich as the family -- or the country -- next door, it's natural to be discontent. He gives the example of East Germany, where Berliners on one side of the city could pick up television signals from the west and see exactly what they were lacking.

Wolfers doesn't have a response except to say that in 2010, he turned down an invitation from the Gallup Center to study their newest data on those countries. "That," he admits in hindsight, "was the greatest missed opportunity of my professional career."

More video from the 2011 Aspen Ideas Festival

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Jennie Rothenberg Gritz is a senior editor at The Atlantic, where she edits digital features.

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