Skip to main content
SpringerLink
Log in

The use of happiness research for public policy

  • Original Paper
  • Published:
Social Choice and Welfare Aims and scope Submit manuscript

Abstract

Research on happiness tends to follow a “benevolent dictator” approach where politicians pursue people’s happiness. This paper takes an antithetic approach based on the insights of public choice theory. First, we inquire how the results of happiness research may be used to improve the choice of institutions. Second, we show that the policy approach matters for the choice of research questions and the kind of knowledge happiness research aims to provide. Third, we emphasize that there is no shortcut to an optimal policy maximizing some happiness indicator or social welfare function since governments have an incentive to manipulate this indicator.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alesina A, Glaeser E, Sacerdote B (2005) Work and leisure in the United States and Europe: why so different?. NBER macroeconomics annual, vol 20. MIT Press, Cambridge, pp 1–64

  • Arrow KJ (1951) Social choice and individual values. Wiley, New York

    Google Scholar 

  • Bentham J (1789) An introduction to the principles of morals and legislation. Clarendon Press, Oxford

    Google Scholar 

  • Brennan G, Buchanan JM (1980) The power to tax. Analytical foundations of a fiscal constitution. Cambridge University Press, Cambridge

    Google Scholar 

  • Brennan G, Buchanan JM (1986) The reason of rules: constitutional political economy. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Brickman P, Coates D, Bulman RJ (1978) Lottery winners and accident victims: is happiness relative?. J Personal Soc Psychol 36(8): 917–927

    Article  Google Scholar 

  • Buchanan JM, Tullock G (1962) The calculus of consent. Logical foundations of constitutional democracy. University of Michigan Press, Ann Arbor

    Google Scholar 

  • Carroll N, Frijters P, Shields MA (2009) Quantifying the costs of drought: new evidence from life satisfaction data. J Popul Econ 22(2): 445–461

    Article  Google Scholar 

  • Charles KK (2004) Is retirement depressing? Labor force inactivity and psychological well-being in later life. In: Polachek SW (ed) Accounting for worker well-being. Research in Labor Economics 23. Elsevier, Amsterdam, pp 269–299

    Chapter  Google Scholar 

  • Dafflon B, Rossi S (1999) Public accounting fudges towards emu: a first empirical survey and some public choice considerations. Public Choice 101(1–2): 59–84

    Article  Google Scholar 

  • Di Tella R, Haisken-De New J, MacCulloch R (2007) Happiness adaptation to income and to status in an individual panel. NBER Working Paper No. W13159, Cambridge

  • Diener E (2005) Guidelines for national indicators of subjective well-being and ill-being. University of Illinois at Urbana Champaign, Mimeo

    Google Scholar 

  • Diener E, Biswas-Diener R (2008) Happiness: unlocking the mysteries of psychological wealth. Blackwell, Malden

    Google Scholar 

  • Dolan P, Metcalfe R (2008) Comparing willingness-to-pay and subjective well-being in the context of non-market goods. Centre for economic performance discussion Paper No. 0890, London School of Economics

  • Dolan P, Peasgood T, White M (2008) Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. J Econ Psychol 29(1): 94–122

    Article  Google Scholar 

  • Easterlin RA (2010) Happiness, growth, and the life cycle. Oxford University Press, Oxford

    Google Scholar 

  • Edgeworth FY (1881) Mathematical psychics: an essay on the application of mathematics to the moral sciences. Kegan Paul, London

    Google Scholar 

  • Freeman AM III (2003) The measurement of environmental and resource values: theory and methods. Resources for the future, Washington

    Google Scholar 

  • Frey BS (2008) Happiness: a revolution in economics. MIT Press, Cambridge

    Google Scholar 

  • Frey BS, Eichenberger R (1999) The new democratic federalism for Europe: functional, overlapping, and competing jurisdictions. Edward Elgar, Cheltenham

    Google Scholar 

  • Frey BS, Stutzer A (2000) Happiness, economy and institutions. Econ J 110(466): 918–938

    Article  Google Scholar 

  • Frey BS, Stutzer A (2002a) What can economists learn from happiness research?. J Econ Lit 40(2): 402–435

    Article  Google Scholar 

  • Frey BS, Stutzer A (2002b) Happiness and economics: how the economy and institutions affect well-being. Princeton University Press, Princeton

    Google Scholar 

  • Frey BS, Stutzer A (2006a) Direct democracy: designing a living constitution. In: Congleton R, Swedenborg B (eds) Democratic constitutional design and public policy, analysis and evidence. MIT Press, Cambridge, pp 39–80

    Google Scholar 

  • Frey BS, Stutzer A (2006b) Mispredicting utility and the political process. In: McCaffery EJ, Slemrod J (eds) Behavioral public finance. Russell Sage Foundation, New York, pp 113–140

    Google Scholar 

  • Frey BS, Stutzer A (2010) Happiness and public choice. Public Choice 144(3–4): 557–573

    Article  Google Scholar 

  • Frey BS, Luechinger S, Stutzer A (2009) The life satisfaction approach to the value of public goods: the case of terrorism. Public Choice 138(3–4): 317–345

    Article  Google Scholar 

  • Frey BS, Luechinger S, Stutzer A (2010) The life satisfaction approach to environmental valuation. Annu Rev Resour Econ 2: 139–160

    Article  Google Scholar 

  • Gregg P (1994) Out for the count: a social scientist’s analysis of unemployment statistics in the UK. J R Stat Soc A 157(2): 253–270

    Article  Google Scholar 

  • Huppert FA, Marks N, Clark A, Siegrist J, Stutzer A, Vittersø J, Wahrendorf M (2009) Measuring well-being across Europe: description of the ESS well-being module and preliminary findings. Soc Indic Res 91(3): 301–315

    Article  Google Scholar 

  • Kahneman D, Knetsch JL (1992) Valuing public goods: the purchase of moral satisfaction. J Econ Manage 22(1): 57–70

    Article  Google Scholar 

  • Kahneman D, Krueger AB (2006) Developments in the measurement of subjective well-being. J Econ Perspect 20(1): 3–24

    Article  Google Scholar 

  • Kahneman D, Sugden R (2005) Experienced utility as a standard of policy evaluation. Environ Resour Econ 32(1): 161–181

    Article  Google Scholar 

  • Kahneman, D, Diener, E, Schwarz, N (eds) (1999) Well-being: the foundations of hedonic psychology. Russell Sage Foundation, New York

    Google Scholar 

  • Kahneman D, Krueger AB, Schkade DA, Schwarz N, Stone AA (2004) Toward national well-being accounts. Am Econ Rev 94(2): 429–434

    Article  Google Scholar 

  • Layard R (2005) Happiness: lessons from a new science. Penguin, New York

    Google Scholar 

  • Lewis-Beck MS, Paldam M (2000) Economic voting: an introduction. Elect Stud 19(2–3): 113–121

    Article  Google Scholar 

  • Loewenstein G, Ubel PA (2008) Hedonic adaptation and the role of decision and experience utility in public policy. J Public Econ 92(8–9): 1795–1810

    Article  Google Scholar 

  • Luechinger S (2009) Valuing air quality using the life satisfaction approach. Econ J 119(536): 482–515

    Article  Google Scholar 

  • Luechinger S, Raschky PA (2009) Valuing flood disasters using the life satisfaction approach. J Public Econ 93(3–4): 620–633

    Article  Google Scholar 

  • Mueller DC (2003) Public Choice III. Cambridge University Press, Cambridge

    Google Scholar 

  • Oreopoulos P (2007) Do dropouts drop out too soon? Wealth, health, and happiness from compulsory schooling. J Public Econ 91(11–12): 2213–2229

    Article  Google Scholar 

  • Oswald AJ, Powdthavee N (2008) Does happiness adapt? A longitudinal study of disability with implications for economists and judges. J Public Econ 92(5–6): 1061–1077

    Article  Google Scholar 

  • Persson T, Tabellini G (2003) The economic effects of constitutions. MIT Press, Cambridge

    Google Scholar 

  • Sen AK (1970) Collective choice and social welfare. Holden-Day, San Francisco

    Google Scholar 

  • Sen AK (1999) Development as freedom. Alfred Knopf, New York

    Google Scholar 

  • Stiglitz J, Sen AK, Fitoussi J-P (2009) Report by the commission on the measurement of economic performance and social progress. http://www.stiglitz-sen-fitoussi.fr

  • Stutzer A (2004) The role of income aspirations in individual happiness. J Econ Behav Organ 54(1): 89–109

    Article  Google Scholar 

  • Stutzer A (2009) Happiness when temptation overwhelms willpower. In: Dutt AK, Radcliff B (eds) Happiness, economics, and politics: toward a multi-disciplinary approach. Edward Elgar, Cheltenham, pp 97–126

    Google Scholar 

  • Stutzer A, Frey BS (2010) Recent advances in the economics of individual subjective well-being. Soc Res 77(2): 679–714

    Google Scholar 

  • Theil H (1964) Optimal decision rules for government and industry. North Holland, Amsterdam

    Google Scholar 

  • Tinbergen J (1956) Economic policy: principles and design. North Holland, Amsterdam

    Google Scholar 

  • van Praag BMS, Baarsma BE (2005) Using happiness surveys to value intangibles: the case of airport noise. Econ J 115(500): 224–246

    Article  Google Scholar 

  • Vournas Y (1999) Official statistics and the manipulation of conceptual and technical instruments: implications for research on social security. Radical Statistics 72

  • Webster D (2002) Unemployment: how official statistics distort analysis and policy, and why. Radical Statistics 79/80

  • Weisbach DA (2008) What does happiness research tell us about taxation?. J Legal Stud 37(S2): S293–S324

    Article  Google Scholar 

  • Welsch H (2006) Environment and happiness: valuation of air pollution using life satisfaction data. Ecol Econ 58(4): 801–813

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Warwick, Coventry, UK

    Bruno S. Frey

  2. Department of Economics, University of Zurich, Wilfriedstrasse 6, 8032, Zurich, Switzerland

    Bruno S. Frey

  3. Faculty of Business and Economics, University of Basel, Peter Merian-Weg 6, 4002, Basel, Switzerland

    Alois Stutzer

Authors
  1. Bruno S. Frey
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Alois Stutzer
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Bruno S. Frey.

Additional information

Bruno S. Frey and Alois Stutzer are also associated with CREMA—Center for Research in Economics, Management and the Arts.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Frey, B.S., Stutzer, A. The use of happiness research for public policy. Soc Choice Welf 38, 659–674 (2012). https://doi.org/10.1007/s00355-011-0629-z

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00355-011-0629-z

Keywords

Search

Navigation