Measuring Happiness
The Economics of Well-Being
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Steven Menasche
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Can money buy happiness? Is income a reliable measure for life satisfaction? In the West after World War II, happiness seemed inextricably connected to prosperity. Beginning in the 1960s, however, other values began to gain ground: peace, political participation, civil rights, environmentalism. "Happiness economics" - a somewhat incongruous-sounding branch of what has been called "the dismal science" - has taken up the puzzle of what makes people happy, conducting elaborate surveys in which people are asked to quantify their satisfaction with "life in general". In this book three economists explore the happiness-prosperity connection, investigating how economists measure life satisfaction and well-being.
The authors examine the evolution of happiness research, considering the famous "Easterlin Paradox", which found that people's average life satisfaction didn't seem to depend on their income. But they question whether happiness research can measure what needs to be measured. They argue that we should not assess people's well-being on a "happiness scale" because that necessarily obscures true social progress. Instead, rising income should be understood as increasing opportunities and alleviating scarcity. Economic growth helps societies to sustain freedom and to finance social welfare programs. In this respect, high income may not buy happiness with life in general, but it gives individuals the opportunity to be healthier, better educated, better clothed, and better fed, to live longer and to live well.
©2015 Massachusetts Institue of Technology (P)2015 Gildan Media LLCIn my reading, the main takeaways from this book are:
- Happiness is difficult to meaure because it's subjective and qualitative, and because our expectations for what the minimum and maximum possible happiness change over very long periods of time. That said, happiness is not impossible to measure, because it is fairly stable, predictable, and reactive to certain common life circumstances like unemployment, marriage, and illness.
- The global measures ("cognitive happiness") are probably more useful than the moment-to-moment measures ("affective happiness"). Though there is still a debate in the literature about the appropriate methodology for measuring happiness (a single overall question, multiple scales for different life areas, diary studies, phone apps with constant reminders).
- The Easterlin Paradox, which postulates that very high incomes do not lead to higher happiness, is probably not individually true per se but better explained by the logarithmic perception of stimuli (the Weber-Fechner Law). The global poor would be substantially happier with one extra dollar per day while this amount would go unnoticed by an upper-class American. But that does not imply doubling an upper-class American's income would have no effect at all on their happiness. On the societal level, the Easterlin Paradox can be dismissed, because economic growth leads to longer lifespans which means greater total happiness per life.
This book does not provide a guide for the reader on how to become happy or a guide for a policymaker about what to do to make everyone more happy. Those topics are outside the scope of this book. But if you want to read what economists have to say about wellbeing research, this is an excellent book for that.
This book gives an unbiased overview of the economic research on wellbeing
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