Does development lead to happiness?

Does development lead to happiness, this is the main question which we attempted to analyze in this paper. Researchers trying to measure the association between happiness and development widely differ in their observations depending upon the data (whether cross sectional or time series; short-term or long-term) and measure of development (level of development or pace of development) used by them. Our argument is that level of development (not the pace of development) has stronger positive linkages with the level of happiness across the nations whether developed or developing. The study also argues that slow economic growth alone is not sufficient to bring measurable changes in happiness. The reason is that people consider lower economic growth as insignificant from the perspective of making changes in their standard of living and they attach lower happiness weight. Using World Development Indicators (WDI) database of the World Bank, the paper applies panel data econometrics and parametric tests for data analysis. The study concludes that development does lead to happiness and nations experiencing long episodes of high economic growth exhibit high positive rise in happiness.