Happiness economics
It typically treats subjective happiness-related measures, as well as more objective quality of life indices, rather than wealth, income or profit, as something to be maximized.
The field has grown substantially since the late 20th century, for example by the development of methods, surveys and indices to measure happiness and related concepts,[2] as well as quality of life.
[3] Nevertheless, furthering gross national happiness, as well as a specified Index to measure it, has been adopted explicitly in the Constitution of Bhutan in 2008, to guide its economic governance.
Anielski in 2008 wrote a reference definition on how to measure five types of capital: (1) human; (2) social; (3) natural; (4) built; and (5) financial.
Van Praag was the first person who organized large surveys in order to explicitly measure welfare derived from income.
[14] In 2010, Daniel Kahneman and Angus Deaton found that higher earners generally reported better life satisfaction, but people's day-to-day emotional well-being only rose with earnings until a threshold annual household pre-tax income of $75,000.
The study included the following eight general recommendations: In their "Unhappy Cities" paper, Edward Glaeser, Joshua Gottlieb and Oren Ziv examined the self-reported subjective well-being of people living in American metropolitan areas, particularly in relation to the notion that "individuals make trade-offs among competing objectives, including but not limited to happiness."
However, Johan Norberg of CIS, a free enterprise economy think tank, presents a hypothesis that as people who think that they themselves control their lives are happier, paternalist institutions may decrease happiness.
[21][22] An alternative perspective focuses on the role of the welfare state as an institution that improves quality of life not only by increasing the extent to which basic human needs are met, but also by promoting greater control of one's life by limiting the degree to which individuals find themselves at the mercy of impersonal market forces that are indifferent to the fate of individuals.
This is the argument suggested by the U.S. political scientist Benjamin Radcliff, who has presented a series of papers in peer-reviewed scholarly journals demonstrating that a more generous welfare state contributes to higher levels of life satisfaction, and does so to rich and poor alike.
[27] Feelings of autonomy and mastery, found in higher levels in the employed than unemployed, are stronger predictors of subjective well-being than wealth.
[27] When personal preference and the amount of time spent working do not align, both men and women experience a decrease in subjective well-being.
Levels remained lower only when individuals worked more hours than preferred for a period of two years or more, which may indicate that it is more detrimental to be over-employed than under-employed in the long-term.
[38] In rich societies, where a rise in income doesn't equate to an increase in levels of subjective well-being, personal relationships are the determining factors of happiness.
National cross-sectional data suggest an inverse relationship between religious diversity and happiness[clarification needed], possibly by facilitating more bonding (and less bridging) social capital.
These include psychological mechanisms, and the types and characteristics of leisure activities that result in the greatest levels of subjective happiness.
[42] Leisure activities that are physical, relational, and performed outdoors are correlated with greater feelings of satisfaction with free time.
[43] Research across 33 different countries shows that individuals who feel they strengthen social relationships and work on personal development during leisure time are happier than others.
Within the Croatian culture, family related leisure activities may enhance SWB across a large spectrum of ages ranging from adolescent to older adults, in both women and men.
Active socializing and visiting cultural events are also associated with high levels of SWB across varying age and gender.
Thus, although significant evidence has demonstrated that active leisure is associated with higher levels of SWB, or happiness, this may not be the case with older populations.
[50] Leisure activities, such as meeting with friends, participating in sports, and going on vacation trips, positively correlate with life satisfaction.
According to the latest systematic review of the economic literature on life satisfaction: Volatile or high inflation is bad for a population's well-being, particularly those with a right-wing political orientation.
Historically, economists thought economic growth was unrelated to population level well-being, a phenomenon labelled the Easterlin paradox.
Happiness may act as a determinant of economic outcomes: it increases productivity, predicts one's future income and affects labour market performance.
[73][74] The Inter-American Development Bank (IDB), published in November 2008 a major study on happiness economics in Latin America and the Caribbean.
[7][76] Bhutan's index has led that country to limit the amount of deforestation it will allow and to require that all tourists to its nation must spend US$200[citation needed].
[77] The index uses poll data from the population surveying various satisfaction factors such as security, public utilities, good governance, trade, social justice, allocation of resources, education and community problems.
The CIW has adopted the following working definition of wellbeing: The presence of the highest possible quality of life in its full breadth of expression focused on but not necessarily exclusive to good living standards, robust health, a sustainable environment, vital communities, an educated populace, balanced time use, high levels of democratic participation, and access to and participation in leisure and culture[82] Ecuador's and Bolivia's new constitutions state the indigenous concept of "good life" ("buen vivir" in Spanish, "sumak kawsay" in Quichua, and "suma qamaña" in Aymara) as the goal of sustainable development.
To support this even further it is believed that a country aggregate level of SWB can account for more variance in government vote share than standard macroeconomic variables, such as income and employment.
