Abstract
Happiness research is one of the most vivid and fruitful parts of modern economics. The focus is on empirical findings. In contrast, theoretical work has been rather neglected. The paper deals with three areas needing more analytical work: the choice or imposition of comparison or reference groups; and the extent, speed and symmetry of adaptation to positive and negative shocks on happiness. In both areas, theoretical propositions are derived which can in the future be empirically tested. The third area relates to the political economy of happiness. Many governments intend to take the happiness index as a criterion of how successful their policies are. As a consequence, survey respondents get an incentive to misrepresent their happiness level, and governments to manipulate the aggregate happiness indicator in their favor. A country’s constitution must induce governments to carefully observe human rights, democracy, the decentralization of political decision making, and market institutions and provide people with the possibility to acquire a good education and find a suitable job.
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Notes
Following the literature, the word “happiness” is used for convenience to denote the more scientific term “subjective well-being”. This paper deals more narrowly with “life satisfaction” derived from the answers to the survey question: “Taken overall, how satisfied are you with the life you lead”. In the case of employment relationships, happiness is identified with job satisfaction.
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Frey, B.S., Gallus, J. & Steiner, L. Open issues in happiness research. Int Rev Econ 61, 115–125 (2014). https://doi.org/10.1007/s12232-014-0203-y
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DOI: https://doi.org/10.1007/s12232-014-0203-y