Happiness - The View of Economics

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Happiness - The View of Economics
Bruno S. Frey University of Zurich, Swiss
Federal Institute of Technology ZurichandCREMA
- Center for Research in Economics, Management
the Arts
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1. Does Money Make Us Happy?
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Life Satisfaction and Income between Persons

• Source Frey and Stutzer 2002, based on data
  from the General Social Survey, National Opinion
  Research Center.

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Life Satisfaction and GNI per Capita between
Countries

• Sources World Values Survey 1999-2004 and
  World Development Report 2003.

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Income and Life Satisfaction over Time (the
example of the USA, 1972-2002)

• Happiness and Real GDP per Capita, United States,
  1972-2002
• Source Easterlin 2005, based on data by Davis
  and Smith 2002, U.S. Bureau of the Census
  2003.

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2. Why Do I Know This?
Rembrandt (1606-1669), Aristotle contemplating a
bust of Homer
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Jeremy Bentham (1748-1832)
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• Daniel Kahneman

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3. Can We Measure Happiness?
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Global subjective well-being, approximately 1,000
surveys with 1.1 million respondents Source
Myers and Diener 1996.
Scale of subjective well-being
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Important Data Sets
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4. What Determines Happiness?
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Age
Source Clark and Oswald (2006).
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Marriage
Satisfaction with life
Source Stutzer and Frey (2006).
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Marriage
Satisfaction with life
Source Stutzer and Frey (2006).
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5. What makes Us Happy?

• Do it your own way
• Elements
• 1. Most people are satisfied with their life
• 2. Economic conditions matter
• 3. Family and friendships are important
• 4. Marriage is helpful
• 5. Religion raises happiness
• 6. Helping others is good for you
• 7. TV is bad for active people
• 8. Be aware of mispredicting utility of future
  goods
• Democracy and federalism raise life satisfaction
• Happiness cannot be chased