Insight by Psychology
The sharp national drop in happiness around 2020 is best explained by the COVID shock because the long pre-2020 series behaved like a random walk and then a sudden exogenous event produced a persistent crater rather than a slow systemic decline.
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See all →Economic growth gives durable wellbeing gains because material improvements from higher per-capita GDP persist across administrations and accumulate over centuries, making them hard to reverse with short-term political shifts.
Differences in happiness between countries with similar incomes arise from culture and institutions because the log(income) relationship has wide error margins, so non-income factors can shift national happiness substantially above or below the income prediction.
