Happiness and health: two paradoxes

This paper aims to establish systematic relationships between the two rapidly growing research streams on the socio-economic determinants of happiness and health. Although they have been pursued quite independently by different communities of researchers, empirical evidence points to very similar underlying causal mechanisms. In particular, in both cases per capita income plays a major role only up to a very low threshold, beyond which relative income and other relational factors become crucial for happiness and health. In addition, we argue that the so-called “paradox of happiness”, extensively discussed in the first research stream, has an empirical counterpart in the decoupling between self-reported happiness and health indexes: while life expectancy grew almost continuously in developed countries after World War II, self reported happiness did not increase and sometimes even decreased. On the basis of these structural analogies, we argue that a process of cross-fertilization between these two research streams would contribute to their development by clarifying the relationship between happiness, health and their determinants. Finally, we observe that the two literatures have converging policy implications: measures meant to reduce poverty and inequality and invest in social and environmental capital may improve both health and happiness of the individuals.