Dawn of the Happiness Revolution

Abstract

At its birth in the 1970s, the Paradox ran up against several well-established preconceptions of the economics discipline. Economics was interested only in peoples’ behavior, not what they said, and it did not indulge in interpersonal comparisons of well-being (happiness). Moreover, economic theory held that increasing peoples’ incomes was a principal means of raising well-being. Over time, however, the economics of happiness began to materialize, as a growing body of happiness statistics offered an enticing subject for research. Also, acceptance by the economics discipline of the new field of behavioral economics, which explicitly incorporated psychological influences, added momentum to happiness studies. Perhaps most important, increasing dissatisfaction, especially among policy-makers, with GDP per capita as the primary metric for gauging well-being added fuel to the fire. Today, although remnants of the behaviorist era persist, more and more economists as well as the general public are vitally interested in what people say about their happiness, and a growing number of governments are officially collecting happiness statistics as a guide to policy.