Final answer:
Research indicates that increased prosperity does not necessarily lead to greater contentment, as happiness levels of rich people do not always rise with income. GDP growth can also misrepresent improvements in the standard of living, particularly when it results from spending on security or disaster recovery. Holistic prosperity, including psychosocial factors, plays a vital role in a person's well-being.
Step-by-step explanation:
It is evident that increased prosperity does not necessarily lead to a greater sense of contentment among people. Research, such as that by Diener et al. (2010, 2013), has illustrated a complex relationship between wealth and happiness. For instance, although income grew, people's happiness did not necessarily follow suit, highlighting that rich people often report their happiness levels remain static despite increased wealth.
This phenomenon is sometimes explained by the fact that after basic needs are met, the impact of additional wealth on well-being diminishes. Furthermore, the rise in GDP can sometimes be misleading. Events that lead to a temporary surge in economic activity, like post-disaster rebuilding, do not necessarily equate to a rise in standard of living.
Similarly, expenditures driven by fear, such as security enhancements due to crime, may increase GDP but do not enhance well-being, disputing the idea that more wealth automatically translates to a better life.
Lastly, the assumption that wealth leads to happiness overlooks the importance of psychosocial factors that substantially contribute to well-being, indicating that holistic prosperity is more significant than material wealth alone. This reflects on the view that focusing solely on economic growth misses other important aspects of a society's progress and the contentment of its people.