THE DIMINISHING UTILITY OF ECONOMIC-GROWTH - FROM MAXIMIZING SECURITYTOWARD MAXIMIZING SUBJECTIVE WELL-BEING

Twenty Years ago, Tibor Scitovsky questioned tile assumption, embedded in neoclassical economics, that human happiness will be augmented if the level of consumption either rises or becomes more uniform over rim e. Evidence from the 1990-1993 World Values Survey suggests that his d oubts weve well-founded: although economic gains apparently make a maj or contribution to subjective well-being as one moves from societies a t the subsistence level to those with moderate levels of economic deve lopment, further economic growth seems to have little or no impact on subjective wellbeing. This transition seems to reflect a basic cultura l change that results in the diminishing marginal utility of economic growth.