The Easterlin Paradox and Happiness U-curve in Georgia

Two of the more prominent findings from the study of happiness are that money does not buy it (up to a point) and that young and old people are happier than those in between. That money does not buy happiness is often referred to as the Easterlin Paradox. It highlights that between and within countries happiness increases with wealth, but only up to a certain point, at which increases in wealth are associated with marginal gains in happiness. That the elderly and young are happier is referred to as the happiness U-curve. This finding has been found to hold in the West, but not in the former Soviet space, where the elderly are the least happy. This blog looks at these phenomenon in Georgia.

On the 2018 UN Women and CRRC Georgia survey, respondents were asked to rate their self-reported happiness, from “Extremely unhappy” to “Extremely happy” on an eleven point scale. A plurality of respondents reported being extremely happy (40%). By comparison, only 1% reported being extremely unhappy.

In agreement with previous studies on happiness within the post-Soviet space, increased household economic status was associated with higher levels of happiness. Individuals who were wealthier were more likely report a happier response on the scale. In contrast, those who have relatively few assets reported lower levels of happiness. However, once respondents have three out of the eleven assets asked about or more, reported happiness increases at a marginal rate, as the Easterlin Paradox would predict.

The U-shaped happiness curve does not hold in Georgia, as happiness generally decreases with age. The presence of children, sex, settlement type, household size, whether or not the respondent was displaced by conflict, and education level were not associated with happiness.

The above data suggests that the Easterlin paradox appears to hold in Georgia, with individuals becoming happier with greater wealth, up to a point. As in other post-Soviet countries, older people are generally less happy, again re-affirming the lack of a u-curve in happiness in the region.

Note: The above analysis is based on an ordinary least squares regression, where the dependent variable is the respondent’s self-reported happiness level. The independent variables are respondents’ household economic status (measured with an asset index, composed of ownership of 11 assets), age, sex (male, female), education, settlement type, displacement status, household size, and age’s interaction with the presence of children in the home. Replication code for the above analysis can be found here. The data for the above analysis can be found here.