Happiness Economicd Essay

4216 Words Sep 10th, 2014 17 Pages
China’s New Challenge: Declining Happiness in a Growing Economy

By Shiyu Song

Dr. Nikolaev
Econ 385R 03J
21st November 2013

Abstract Since 1978, China has seen a sustainable rapid growth in its economy. China’s real GDP has already surpassed 7 trillion US dollars in 2011 in current dollars, and it has replaced Japan as the world’s second largest economy. People in China also have significant improvements in their standards of living and material life. However, my findings contradict the notion that an increase in income and standard of living will gain people happiness. My major findings show that income inequality and other major social problems, such as lack of religious belief and faith, political problems, and family
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(The World Bank)

Figure 1: Mean happiness in China from 1990 to 2006
Source: Inglehart, Foa and Welzel, “Social Change, Freedom and Rising Happiness,” Journal of Personality and Social Psychology Almost every key economic factor indicates that there are significant improvements in Chinese living standards and material life. Commonly, we think that people would face an increase in happiness when they experienced increasing income from low living standards. (Knight et al. 2008) However, despite the improvements in objective measures, the subjective well being measured by self-reported ratings of people’s happiness shows that the mean happiness in China has gradually decreased from 3+ in 1985 to almost 2.8 in 2006. (Inglehart et al. 2008) This research paper aimed to study the reasons that bring down Chinese happiness with increasing income and a growing economy. The first part of the paper presents the four major problems that might explain Chinese declining happiness. The second section explores other possible problems emerged from rapid economic growth that might influence Chinese happiness. In the concluding part of this paper, I speculate whether my findings are consistent in all rapid growth economies, especially the BRICS counties.
2. Four Major Problems Income inequality, family burden, lack of belief and distrust are

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