Why isn't growth making us happier? Utility on the hedonic treadmill

A preference structure is constructed, grounded in psychological evidence, with well-being a function of the consumption level and the growth of the variety of goods consumed. Such preferences are analyzed in an endogenous variety growth model. The implications are consistent with the increase in income and the variety of goods consumed in developed economies in the post-war period that have not been accompanied by an increase in reported well-being. Moreover, the results suggest a connection between the stagnancy of reported well-being and diminishing returns in technological change, despite an increase in the variety of goods available over time.