Happiness Economics

"Will Thorne is a stalled poet, married to Judy, a wildly successful celebrity economist ... When Will meets his muse, the enigmatic and athletic Lily White, he becomes inspired not only to write poetry, but to take guerrilla action in support of poets everywhere"--P. [4] of cover.

Practical solutions for building economies of well-being based on Genuine Wealth.

Can money buy happiness? Is income a reliable measure for life satisfaction? In this book, three economists explore the happiness-prosperity connection, investigating how economists measure life satisfaction and well-being. --

Curiously, economists, whose discipline has much to do with human well-being, have shied away from factoring the study of happiness into their work. Happiness, they might say, is an ''unscientific'' concept. This is the first book to establish empirically the link between happiness and economics--and between happiness and democracy. Two respected economists, Bruno S. Frey and Alois Stutzer, integrate insights and findings from psychology, where attempts to measure quality of life are well-documented, as well as from sociology and political science. They demonstrate how micro- and macro-economic conditions in the form of income, unemployment, and inflation affect happiness. The research is centered on Switzerland, whose varying degrees of direct democracy from one canton to another, all within a single economy, allow for political effects to be isolated from economic effects. Not surprisingly, the authors confirm that unemployment and inflation nurture unhappiness. Their most striking revelation, however, is that the more developed the democratic institutions and the degree of local autonomy, the more satisfied people are with their lives. While such factors as rising income increase personal happiness only minimally, institutions that facilitate more individual involvement in politics (such as referendums) have a substantial effect. For countries such as the United States, where disillusionment with politics seems to be on the rise, such findings are especially significant. By applying econometrics to a real-world issue of general concern and yielding surprising results, Happiness and Economics promises to spark healthy debate over a wide range of the social sciences.

A leading economist discusses the potential of happiness research (the quantification of well-being) to answer important questions that standard economics methods are unable to analyze. Revolutionary developments in economics are rare. The conservative bias of the field and its enshrined knowledge make it difficult to introduce new ideas not in line with received theory. Happiness research, however, has the potential to change economics substantially in the future. Its findings, which are gradually being taken into account in standard economics, can be considered revolutionary in three respects: the measurement of experienced utility using psychologists' tools for measuring subjective well-being; new insights into how human beings value goods and services and social conditions that include consideration of such non-material values as autonomy and social relations; and policy consequences of these new insights that suggest different ways for government to affect individual well-being. In Happiness, emphasizing empirical evidence rather than theoretical conjectures, Bruno Frey substantiates these three revolutionary claims for happiness research. After tracing the major developments of happiness research in economics and demonstrating that we have gained important new insights into how income, unemployment, inflation, and income demonstration affect well-being, Frey examines such wide-ranging topics as democracy and federalism, self-employment and volunteer work, marriage, terrorism, and watching television from the new perspective of happiness research. Turning to policy implications, Frey describes how government can provide the conditions for people to achieve well-being, arguing that a crucial role is played by adequate political institutions and decentralized decision making. Happiness demonstrates the achievements of the economic happiness revolution and points the way to future research.

This book is a welcome consolidation and extension of the recent expanding debates on happiness and economics. Happiness and economics, as a new field for research, is now of pivotal interest particularly to welfare economists and psychologists.

This book focuses on what makes people happy. The author explains methods for measuring subjective life satisfaction and well-being by discussing economic and sociodemographic factors, as well as the psychological, cultural and political dimensions of personal happiness. Does higher income increase happiness? Are people in rich countries, such as the United States, the United Kingdom and Scandinavian countries, happier than those living elsewhere? Does losing one’s job make one unhappy? What is the role of genetic endowments inherited from our parents? How important are physical and emotional health to subjective life satisfaction? Do older people tend to be happier, or younger people? Are close social relationships necessary for happiness? Do political conditions, such as respect for human rights, democracy and autonomy, play a part? How can governments contribute to the population’s happiness? This book answers these questions on the basis of extensive interdisciplinary research reflecting the current state of knowledge. The book will appeal to anyone interested in learning more about the various dimensions of personal well-being beyond the happiness-prosperity connection, as well as to policymakers looking for guidance on how to improve happiness in societies.

There is a lot of attention for happiness, but there is also a lot of confusion, about the concept and the nature of happiness. This book wants to reduce this confusion, to make the deliberations and discussions about happiness more productive. A reduction of confusion will also make it easier to assess happiness as a possible standard in our personal life and in politics. Acceptance of happiness as a standard will have positive effects. Acceptance in personal life will make individuals more critical, and less vulnerable for adversity and manipulation. Acceptance in politics will contribute to a better detection and analysis of social-economic problems. Such positive effects are important for well-being. Well-being is usually defined as ‘objective well-being’ by experts, like medical specialists or psychologists. They apply their professional standards like blood pressure or personality characteristics. Happiness, on the other hand, is ‘subjective well-being’ as experienced by the people themselves. This happiness is the appreciation of one’s own life as a whole, and this appreciation is based on standards people have adopted themselves, knowingly or unknowingly. Happiness as subjective well-being, and objective well-being as defined by experts, are complementary. It is important to asses objective and subjective well-being simultaneously, and it is incorrect to ignore one of them.