In 1974, economist Richard Easterlin observed something puzzling: while richer individuals within a country tended to report higher happiness than poorer ones, over time, increases in average income did not correspond to increases in average happiness. This phenomenon, known as the Easterlin Paradox, challenged classical economics’ assumption that more wealth naturally leads to more well-being.
Decades of research have debated and dissected this paradox, yet a conclusive model remained elusive—until now.
The Life 3H Framework—which defines a fulfilling life as the interplay of Happiness, Highness, and Holiness—offers a fresh, integrative resolution to the Easterlin Paradox.
Happiness ≠ Money, but Money ≠ Irrelevant
The first pillar of the Life 3H framework—Happiness—is rooted in the quality of one’s social relationships: connection with family, tribe, and community. It is not a function of personal wealth or consumption, but of shared experiences, mutual care, and emotional bonds.
However, this is not to say money is irrelevant. Below a certain threshold, money acts as a prerequisite for social flourishing. If a person struggles to meet basic needs—food, shelter, health, or time—they are typically unable to invest attention or energy into their relationships. In such states of chronic financial insecurity, social connections often deteriorate, or are deprioritized. Hence, happiness does correlate with income at low-income levels.
But this correlation plateaus. Once a person’s basic needs are met and they cross this sufficiency threshold, further income does not translate to more happiness. This is the precise inflection point where the Easterlin Paradox emerges: beyond a certain income, happiness and money decouple.
The Diverging Graphs of Money and Happiness
This explains why the graph of income and happiness begins aligned, but diverges past a point. Below the threshold, both increase together—because more money supports the conditions for social bonding. But beyond the threshold, money supports other pursuits, like career ambition or luxury consumption, which don’t inherently boost relational well-being.
Often, people shift focus to “Highness”—the second pillar in the 3H model—once their material needs are secured. Highness reflects success in status competitions, whether in business, fame, achievement, or influence. This is a relative game: it’s not about how much you have, but how much more than others.
This pursuit may bring dopamine-driven satisfaction, but it does not directly nourish happiness. In fact, it can come at the expense of it—if status-seeking replaces social bonding.
The Final Distinction: Holiness
The third pillar, Holiness, adds a final layer to resolving the paradox. Holiness represents the richness of the internal world—a life of reflection, meaning, integration, and coherence. It is neither dependent on income nor status but on inner development.
Paradoxically, those who achieve the highest levels of fulfillment are not the wealthiest, but those who’ve balanced all three Hs—those whose relationships thrive (Happiness), who pursue mastery in their domain (Highness), and who cultivate a deep, reflective, and integrated sense of self (Holiness).
Conclusion: It’s Not a Paradox, It’s a Threshold Effect
The Easterlin Paradox is not a contradiction—it’s a misunderstood curve. The Life 3H Framework reveals it as a threshold effect, where income enables happiness only up to the point it enables relationships, after which their paths diverge.
Wealth matters—until it doesn’t.
A fulfilling life is not built by chasing money infinitely, but by recognizing when “enough” is enough, and then investing in what truly matters: people, purpose, and personal growth.
LIFE 3H by Alok Gotam 