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2018 | Buch

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Economics of Happiness

verfasst von: Prof. Dr. Dr. Bruno S. Frey

Verlag: Springer International Publishing

Buchreihe : SpringerBriefs in Economics

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

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.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Happiness as a Goal of Human Beings

Abstract

There are many concepts and ideas regarding what happiness may mean, but it certainly is a major goal of human beings. In the past, the concept of Gross National Product (GNP) was an important social innovation for capturing economic activity. A higher material living standard enabled people to lead better and healthier lives. Many people have a romantic view of the quality of life in previous centuries. However, people living in those times had no access to material things nowadays taken for granted. Similarly, goods and services that are generally available in the developed world may be inaccessible for many in the developing world. Today, it is no longer assumed that higher material wealth automatically leads to higher life satisfaction. There are many other factors that determine happiness beyond purely material aspects. It is important to deal with the fundamental questions of how much material consumption contributes to our happiness and which factors above and beyond material aspects determine human well-being.

Bruno S. Frey

Chapter 2. Happiness Can Be Measured

Abstract

Most empirical research uses subjective and self-reported life satisfaction to capture happiness. The answers correspond well to everyday observations about what well-being means. Subjective life satisfaction data are presented here for several countries. People living in the Nordic countries, above all Denmark and Switzerland, are the happiest. The nations in which the average life satisfaction of its inhabitants is lowest are, with the exception of Syria, all situated in Africa. Happiness can also be measured by other methods such as the U-index, which captures the periods of a day in which individuals surveyed felt that they were in an “unpleasant state”; experience sampling, which is an electronic diary capturing immediate, affective experiences; day reconstruction, which retrospectively reconstructs subjective feelings through the various phases of a day; and brain imaging, which employs functional magnetic resonance imaging (fMRI) to capture the brain activity of human beings with respect to positive and negative affect.

Bruno S. Frey

Chapter 3. What Makes People Happy?

Abstract

Happiness research determines, isolates, and measures the various determinants of human well-being. The data collected on the subjective life satisfaction of individuals are related to possible determinants of happiness by multiple regressions. The personality structure determined by one’s genetic inheritance has a strong influence on happiness. Among economic factors, people with higher incomes unambiguously consider themselves to be more satisfied with their lives than do people with low income, and people losing their job are much more dissatisfied with their lives than are those holding a job. Prominent among the socio-demographic influences is a U-shaped relationship between age and life satisfaction; married people are happier than those living alone; and intensive and regular social contacts within the family and among friends and acquaintances contribute strongly to happiness. Physical and psychological health contribute strongly to well-being. Cultural differences matter, and religious persons are demonstrably happier than those who do not belong to a religious community. Happiness is positively influenced by democracy and political decentralization.

Bruno S. Frey

Chapter 4. Consequences of Happiness

Abstract

Happiness has various effects: Persons considering themselves to be happy act differently in many life circumstances. Happier persons are more productive, in better health, and therefore live longer. The positive consequences of happiness are illustrated using the case of health. The effects can be captured by various methods: A large number of persons are observed over many years; emotions can be manipulated in laboratory experiments; and the impact on health of personal misfortunes such as the loss of a marital partner can be explored. Often it is difficult to establish in which direction the relationship between cause and effect works. To identify the direction, lottery winners are analysed. This analysis shows that higher income and wealth indeed raise happiness, though only for a short period.

Bruno S. Frey

Chapter 5. Psychological Influences on Happiness

Abstract

Individual happiness is to some extent constructed by the individuals themselves and depends on the past and present social environment. Many individuals adapt quite quickly to a new situation and move towards a similar well-being level as they experienced before a positive or negative event. However, this is not always the case. Our well-being depends not so much on absolute income but on our income compared to colleagues, friends, and relatives. This also holds for unemployment. Experiments reveal that people are incapable of accurately remembering the pain they experienced in the past. Wrong decisions are often taken because people disregard the scale and speed of adjustment to a new situation. Human beings tend to be overoptimistic and find it difficult to predict how happy they will be in the future under different life circumstances.

Bruno S. Frey

Chapter 6. Happiness Maximization by the Government

Abstract

Fundamental arguments speak against politicians attempting to maximize the aggregate subjective well-being index of their country’s population. This approach to economic policy corresponds to the idea of a “benevolent dictator” who determines from above what is good for the people. Such an assumption is naïve. Once the maximization of the aggregate happiness index of the population is taken to be the official goal of economic and social policy, one can no longer trust that survey respondents answer any questions about their subjective life satisfaction in an unbiased way. When citizens’ happiness is taken as the measuring rod of politics, government politicians will make an effort to manipulate the aggregate happiness index in their favour. For both these reasons, the subjective well-being data are no longer a reliable measure of people’s happiness. Governments should not be asked to maximize happiness.

Bruno S. Frey

Chapter 7. What Happiness Policy Is Appropriate?

Abstract

Happiness may not be the only goal of human beings. Personal development, virtue, fairness, companionship, freedom, and solidarity may also matter. The political process should provide everybody the opportunity to find his or her own way to reach happiness. At the constitutional level, citizens appreciate increased political participation rights in the form of popular initiatives and referendums in which issues of content are decided. They prefer a federal political organization in which local units have extensive decision rights about both expenditures and taxes. In current politics, citizens can urge politicians and public officials to follow the insights gained in happiness research. Important areas include, for instance, the job market and economic growth, income inequality, independence, voluntary work and donations, social relationships, education, and liveable cities. Politicians can discuss the proposals with the population, and if supported, put them into practice.

Bruno S. Frey

Chapter 8. What About a Happiness Pill?

Abstract

Happiness pills provided by the government free of charge would have several positive, but also negative consequences. The procedural aspects of happiness are important and should not be neglected. Politicians may have an incentive to keep the population quiet by offering them happiness pills for free. But this may backfire if citizens are then induced to engage more strongly in political activities against the wishes of politicians. It is illusory to expect that happiness pills are able to raise people’s well-being over an extended period of time.

Bruno S. Frey

Chapter 9. Happiness and Consumption

Abstract

Standard economics assumes consumers to be rational actors, but happiness research suggests that consumers tend to mispredict the utility of activities and that they face self-control problems. People often hold incorrect intuitive theories about the determinants of happiness. They overestimate the impact of specific life events on their experienced future well-being with regard to both intensity and duration. There are four major sources for the systematic over- and undervaluation of choice options: the underestimation of adaptation, distorted memory of past experiences, the rationalization of decisions, and false intuitive theories about the sources of future utility.

Bruno S. Frey

Chapter 10. Happiness and Television Viewing

Abstract

Watching TV is a major human activity. Many people are tempted to watch television rather than to pursue more engaging activities. Individuals with incomplete control over their own behaviour watch more TV than they consider optimal for themselves. Their well-being is lower than they could achieve. Heavy TV viewers, and in particular those who lose a great deal of time that might have been spent doing something else, report lower life satisfaction. Long TV hours are also linked to higher material aspirations and anxiety.

Bruno S. Frey

Chapter 11. Happiness and Management

Abstract

Happy people have higher intrinsic motivation to work, which raises their productivity. Some firms exploit happiness to attract more customers. Such business policy exploits happiness in an instrumental way; this flies in the face of true happiness. In what kind of happiness can business organizations engage? A firm should offer all its stakeholders the possibility to achieve happiness. Firms should create a work atmosphere that supports employees’ autonomy and creativity and foster valuable social relationships. Individuals can then pursue their quest for happiness in the way best for themselves.

Bruno S. Frey

Chapter 12. Happiness and Religion

Abstract

Modern happiness research makes it possible to empirically measure the impact of religion on subjective well-being. There is a positive correlation between religion and happiness, with a robust effect of churchgoing and Protestant confession, while the results regarding internal religiosity or faith are more ambiguous.

Bruno S. Frey

Chapter 13. Happiness and War

Abstract

A crucial question of happiness research is how people who died in military conflicts should be treated. The present procedure of surveying the living does not consider the potential future happiness of the deceased. Alternatively, the well-being lost by the people who died in a war can be calculated. There are some benefits of war to individuals such as feelings of solidarity, mutual support, and national pride, as well as “combat flow”. There may also be an “afterglow” that glorifies the combat experience. Research results indicate a substantial loss in well-being due to terrorist incidents.

Bruno S. Frey

Chapter 14. Happiness in the Digital World

Abstract

Spending a large number of hours on the Internet has positive and negative effects on subjective well-being. Social network users tend to compare their income to those with whom they interact, leading to less satisfaction with their own income. People with a strong inclination to be “liked” on Facebook are less satisfied with the life they lead and feel lonelier. Hours spent on online social networks are negatively correlated with happiness. The overall consequences on subjective well-being of these far-reaching digital developments are yet unknown.

Bruno S. Frey

Chapter 15. Beyond Material Aspects

Abstract

These are the most important insights of modern happiness research: People with higher income are happier, but this effect becomes weaker and weaker as income rises. Good social relationships, physical and psychological health, and democracy as well as decentralized political decision-making raise happiness. Several insights of happiness research are inconsistent with human beings being rational and egotistic: Unemployed people are much less satisfied with their lives even though they have more leisure time. Self-employed people work harder, but thanks to higher autonomy report being happier. People who care for others by donating money and engaging in voluntary work are happier. Human well-being is no longer intimately connected with the provision of material goods. Material aspects are not to be neglected, but self-determined work is of crucial importance for happiness.

Bruno S. Frey

Titel: Economics of Happiness
verfasst von: Prof. Dr. Dr. Bruno S. Frey
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-75807-7
Print ISBN: 978-3-319-75806-0
DOI: https://doi.org/10.1007/978-3-319-75807-7