The link between rising incomes and happiness was challenged before the financial crisis but falling living standards have muddied the waters
You have a job. You live in a small town in New Jersey, New South Wales or West Sussex. You are neither poor nor rich. You haven’t had a real pay rise in the past five years. For the first time in your life, your standard of living has been falling. So how happy do you feel?
This is not as daft a question as it might appear. The conventional wisdom is that people expect to become better off year after year. What’s more, they punish governments that make them worse off. Elections are won and lost on this bread-and-butter issue.
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