Happiness economics

Happiness economics uses reported well-being and related measures to study how income, public policy, and other conditions affect people’s lives.

Subjective well-being: People’s evaluations of their lives and feelings, measured through self-reports. Its life satisfaction and emotional measures provide the field’s central outcomes.
Gross National Happiness: A framework developed in Bhutan that treats collective well-being as a goal of national development. It illustrates an attempt to put well-being measures alongside conventional economic indicators.
Jeremy Bentham: An English philosopher and jurist who founded modern utilitarianism. His proposal to judge institutions by pleasure and pain anticipates well-being as a policy outcome.
Gross domestic product: The monetary value of final goods and services produced within a country during a period. GDP tracks production, while happiness economics asks whether that production improves lived well-being.
Life satisfaction: A person’s considered judgment of how satisfactory their life is overall. Survey questions about life satisfaction turn broad well-being into a comparable outcome.
Well-being budget: A public budget framework that assesses spending and policy goals using measures of well-being. It applies happiness-economics evidence to choices about public resources.
Richard Easterlin: An American economist known for research on income, happiness, and long-run economic growth. His 1974 paper gave the income–happiness debate its enduring paradox.
Revealed preference: An approach that infers preferences from choices people make under constraints. It contrasts observed choices with happiness research’s reliance on reported experience.
Day reconstruction method: A survey method that asks people to reconstruct the previous day and rate their feelings during activities. It captures experienced emotions across daily activities, complementing global life evaluations.
Cost-benefit analysis: A method for comparing a policy’s social benefits with its costs, often expressed in monetary terms. Well-being valuations can broaden its accounting beyond market transactions.

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