For much of the twentieth century, (0) ECONOMISTS (ECONOMY) worked under the convenient 1ASSUME that rising incomes would automatically translate into rising wellbeing. Large-scale studies, however, have revealed a far weaker 2CORRELATE between GDP and reported happiness than the textbooks once implied. Beyond a surprisingly modest threshold, additional income yields 3DIMINISH returns, and further pay rises bring only a small increase in reported life 4SATISFY. Much of the effect that does remain appears to be 5COMPARE in nature: people judge their prosperity by looking at their neighbours, not by measuring it in absolute terms. As a result, a country where most households are 6RELATE equal tends to score higher on wellbeing indices than a richer one marked by sharp inequality. Researchers now speak routinely of 'hedonic adaptation' and emphasise the role of meaningful work, strong relationships and a sense of personal 7FULFIL. These findings, although sometimes challenged 8STATISTIC, have already begun to shape how several governments measure national progress.