17. If Money Does Not by Much Happiness, What Does? A Multilevel Analysis on the Impact of Absolute and Relative Income, Social Values and Modernization on Subjective Well-Being in Europe

From the rich literature on happiness and subjective well-being that money does not buy happiness. This is known as Easterlin's paradox, which posits that beyond a certain level of gross domestic product (GDP) per capita wealthier nations are not better off in terms of subjective well-being than less wealthy nations, whereas within countries absolute income pays off in terms of happiness though at a diminishing rate. The paradox is challenged in a seminal paper by Stevenson and Wolfers, who used the World Values Survey, the Eurobarometer, the General Social Survey and Gallup's World Poll Data for various years to examine the relationship between subjective well-being (SWB) and absolute income. The Easterlin paradox constitutes the analysis, supplemented with sociological notions about the possible impact of social and modernization values on happiness. Research on SWB from a modernization perspective is rather scarce in the social sciences. Keywords: Easterlin's paradox; Eurobarometer; gross domestic product (GDP); relative income; social values; subjective well-being (SWB); Wolfers; World Values Survey