Economic Analysis Of Happiness Paradox

Wealth and income are considered to be the most direct factors in people’s access to utility, economics put the level of income into a main indicator of human’s Subjective Well-being(SWB). Scholars found that people’s SWB would not continue to ascend along with the improvement of economic development when it comes into a certain threshold. Therefore, paying too much attention to economic growth will lead us deviating from human’s welfare. This paper started from the “happiness” to discuss how do income and economic development influenced individual utility, and tried to uncover the Chinese “Happiness Paradox”.This paper used six chapters to analyze the “Happiness Paradox” that happened in China. From the beginning, we talked about research background and content elaboration in, and explained the theoretical value and practical meaning Chapter 1. Chapter 2 that based on the Happiness Economics theory provided the whole research with theoretical basis. Chapter 3 discussed China’s “Happiness Paradox” situation, and we carried out the empirical research base on the data of CGSS 2012 to discuss the inherent mechanism of “Happiness Paradox” more deeply in Chapter 4. Through the analysis above, Chapter 5 put forward suggestions based on China’s present situation, in order to improve Chinese residents SWB level. Chapter 6 was the main and the last contents of this paper, an overview of the full text of the whole research, in this section we summarized the theory we had already confirmed.This paper finally draw the following conclusions:(1) the increasing of absolute income might enhance the residents’ SWB; and the relative income level of the residents can directly affect individual SWB.(2) macro-economy development can enhance residents’ SWB level. Macroeconomic factors can also affect residents’ SWB through the wealth effect and other micro mechanism.(3) Residents’ SWB and government finance are closely linked. Fiscal expenditure and SWB are positively correlated, while fiscal revenue and SWB are inversely related.(4) micro-variables can affect the residents’ SWB. Individual’s sex, health status and educational level are vary from each other, thus residents’ SWB levels are different. Furthermore, we would investigate age, census register, educational level of individual and many other micro factors in further study.This paper, which focused on the "Happiness Paradox", was a kind of development and supplement of Happiness Economics theory. We analyzed China "Happiness Paradox ", interpreted China’s economic and social issues. On the methodology, this paper combined empirical and normative, deductive and inductive, theoretical and practical methods. However, there is still a large space to improve as for this paper, thus we will improve in subsequent research of Happiness Economics.