AIM Framework glossary
Easterlin Paradox
Canonical definition
The Easterlin Paradox is the empirical observation that within countries richer people report higher life satisfaction than poorer people, while across countries and across time rising GDP does not correlate with rising average life satisfaction, a cross-sectional / time-series mismatch which AIM explains as economies shifting from Appetitive-dominant growth (genuinely improving A-sufficiency) to Mimetic-dominant growth (inflating positional goods and Status competition) without corresponding investment in Intrinsic Infrastructure, causing wM to rise while wA stabilises and wI stagnates, producing higher GDP without gains in Freedom or Well-Being.
Explanation
Richard Easterlin's 1974 finding created a puzzle for economics: within countries, richer people are happier than poorer people, but across countries and over time, rising GDP does not correlate with rising happiness. AIM resolves the paradox: early economic development primarily expands A-sufficiency (more people have adequate food, shelter, healthcare), which genuinely improves well-being. But once Appetitive sufficiency is widespread, additional income increasingly chases positional goods (luxury markers, status symbols, speculative assets) which are zero-sum. The marginal dollar shifts from A-valuable (reducing deprivation) to M-intensive (funding Status races). Since Status competition produces no net well-being gains and constantly resets reference points (the hedonic treadmill effect), GDP rises but average life satisfaction plateaus. The solution from AIM's perspective is not degrowth but redirection: steer marginal resources toward Intrinsic Infrastructure (education, research, creative capacity, community space) and away from M-intensive positional competition via M-taxation and visibility governance. This would allow GDP growth to resume improving well-being instead of merely escalating Status races.
Epistemic status
Validated Empirical Pattern.
Derivation
Chapter 5, Section 5.6.4; Chapter 5, Section 5.1.3; Chapter 8, Section 8.5.3; Chapter 19, Section 19.12.
Also in the entry
Distinction from Easterlin Plateau. The Easterlin Paradox names the cross-sectional / time-series mismatch (positive within-country correlation between income and satisfaction; absent or weak cross-country and over-time correlation). The Easterlin Plateau names the time-series observation alone: that the income-satisfaction curve flattens beyond a threshold. The Plateau is the empirical pattern the Paradox is named after; the Paradox is the puzzle that emerges when the Plateau is set alongside the within-country positive correlation.