the economics of happiness

Economists continue to study happiness, and new research appears frequently. FT undercover economist Tim Harford faces this question head-on, asking whether the pursuit of wellbeing should guide government policy and, if so, how should we measure wellbeing. Typically, happiness surveys ask respondents how satisfied they are with life, on a scale of one to ten. Is moving from 3 to 4 the same as moving from 7 to 8 on the scale? And, what does a score of one, five or ten really mean?

[O]ne of Barack Obama’s senior advisers, the economist Alan Krueger, was a noted expert in “subjective wellbeing” (happiness to you and me), while former UK prime minister David Cameron also championed the idea. It now seems strangely out of step with the times: whatever you think is driving Britain’s current PM Theresa May or US president Donald Trump, it seems unlikely to be surveys of life satisfaction.

Still, it is easy to sympathise with Thomas Jefferson’s remark, shortly after he stepped down as US president, that “The care of human life & happiness, & not their destruction, is the first & only legitimate object of good government.”

The question is what that means for government policy — and whether the academic study of wellbeing can help. ….

There is much in the idea of an activist happiness policy to amuse or horrify anyone with laissez-faire instincts. But to the extent that we think governments can sometimes bodge their way into bettering the human condition, there’s a case to look at what people say makes them happy with their lives.

As a cautionary note, however, I offer Adam Smith’s warning against the person who “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard”. Whether a politician seeks to maximise national income or national happiness, Smith’s critique rings just as true.

Tim Harford, “The economics of happiness“, Financial Times, 26 January 2018 (gated paywall).

Mr Harford is reviewing The Origins of Happiness: The Science of Well-Being Over the Life Course (Princeton University Press, 2018) by Andrew E. Clark, Sarah Flèche, Richard Layard, Nattavudh Powdthavee, and George Ward. All of the authors are members of the Wellbeing Programme at the London School of Economics’ Centre for Economic Performance.

 

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