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Individual Experience of Positive and Negative Growth is Asymmetric: Global Evidence from Subjective Well-being Data

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2014-12-08

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De Neve, Jan-Emmanuel, George W. Ward, Femke De Keulenaer, Bert Van Landeghem, Georgios Kavetsos, and Michael I. Norton. "Individual Experience of Positive and Negative Growth is Asymmetric: Global Evidence from Subjective Well-being Data." Harvard Business School Working Paper, No. 15-021, October 2014.

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Are individuals more sensitive to losses than gains in macroeconomic growth? Using subjective well-being measures across three large data sets, we observe an asymmetry in the way positive and negative economic growth are experienced, with losses having more than twice as much impact on individual happiness as compared to equivalent gains. We use Gallup World Poll data drawn from 151 countries, BRFSS data taken from a representative sample of 2.5 million US respondents, and Eurobarometer data that cover multiple business cycles over four decades. This research provides a new perspective on the welfare cost of business cycles with implications for growth pol- icy and our understanding of the long-run relationship between GDP and subjective well-being.

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