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Here we're looking at why an increase in gdp might not always make people happier.
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For one, we could say adaptation.
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People usually adapt to their income levels.
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So as the income increases, they may initially feel happier, but over time they're just going to get used to it.
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Two is going to be relative income.
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People often compare their income and possession to those of others.
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If everyone's income increases, people may not feel happier because their relative standing is still going to be the same.
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Three, we have diminishing marginal utility.
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The concept of diminishing marginal utility states that a person consumes more of a good.
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The additional satisfaction they gain, each additional unit is going to decrease...