generated by growth are used to satisfy people’s basic
needs. But in high-income societies, economic growth
generates diminishing marginal returns, so that large
increases in production and consumption have almost
no effect on average well-being in society. Still, a concern
for relative economic status can lead people to
pursue higher income and consumption levels even
when, from a social perspective, these activities generate
negative costs of the kind measured by the ISEW.35
Since these costs are excluded from the standard
measure of economic output, it is not surprising that
the economic growth that has occurred in the United
States since 1970 has not been matched by a corresponding
increase in ISEW or subjective well-being.
generated by growth are used to satisfy people’s basicneeds. But in high-income societies, economic growthgenerates diminishing marginal returns, so that largeincreases in production and consumption have almostno effect on average well-being in society. Still, a concernfor relative economic status can lead people topursue higher income and consumption levels evenwhen, from a social perspective, these activities generatenegative costs of the kind measured by the ISEW.35Since these costs are excluded from the standardmeasure of economic output, it is not surprising thatthe economic growth that has occurred in the UnitedStates since 1970 has not been matched by a correspondingincrease in ISEW or subjective well-being.
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