>[!abstract] >While people on higher incomes are typically happier than their lower-income counterparts at a given point in time, higher incomes don't produce greater happiness over time. One explanation is that one's happiness depends on a comparison between their income and their perceptions of the average standard of living. If everyone's income increases, one's increased income gives a short boost to their happiness, since they do not realize that the average standard of living has gone up. Some time later, they realize that the average standard of living has also gone up, so the happiness boost produced by increased income disappears. It is the contradiction between the point-of-time and time series findings that is the root of the paradox: while there is a correlation at a fixed point, there is no trend over multiple points. That is, in the short run, everyone perceives increases in income to be correlated with happiness and tries to increase their incomes. However, in the long run, this proves to be an illusion, since everyone's efforts to raise standards of living lead to increasing averages, leaving everyone in the same place in terms of relative income (Wikipedia, 2025). >[!related] >- **North** (upstream): [[Gini coefficient]] >- **West** (similar): — >- **East** (different): — >- **South** (downstream): —