**1. Introduction**

### **1.1 The issue**

One of the ideological foundations of the modern welfare states is the belief that people can be made happier by providing them with better living conditions. This belief is challenged by two theories of happiness: 'comparison theory' and 'trait theory'. Both these theories predict that average happiness will remain unchanged over time despite changes in living conditions such as economic growth or decline. They contradict common sense 'liveability theory', which holds that improvement of living conditions in a society will make life more enjoyable, and reversely, that deterioration of living conditions will reduce average happiness.
