A Paradox of Economic Growth and Relative Deprivation

Rapid economic growth sometimes intensifies people's frustration. In this article, we attempt to formulate this kind of paradox of economic growth, and to explain theoretically how economic growth increases people's dissatisfaction by way of the notion of relative deprivation by employing the theoretical framework of Yitzhaki's relative deprivation index. We introduce the problem of the China puzzle as the latest case of the paradox. Then, we introduce the definition of Yitzhaki's index of relative deprivation, and use this to explain the China puzzle. Besides, through a theoretical examination of Yitzhaki's index, we propose a proposition proving that an increase of relative deprivation in the society can occur even when the amount of wealth increases and the degree of inequality reduces.