The notion that money can't buy happiness is popular, especially among Europeans who believe that growth-oriented free-market economies have got it wrong. They drew comfort from the work of Richard Easterlin, professor of economics at the University of Southern California, who trawled through the data in the 1970s and observed only a loose correlation between money and happiness. Although income and well-being were closely correlated within countries, there seemed to be little relationship between the two when measured over time or between countries. This became known as the "Easterlin paradox". Mr Easterlin suggested that well-being depended not on absolute, but on relative, income: people feel miserable not because they are poor, but because they are at the bottom of the particular pile in which they find themselves.
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