The economics of happiness

Posted on January 26, 2010 

The economics of happiness

Last year was not a happy one. Economic crisis. Job losses. Wars. Yet, while we can quantify things such as gross domestic product or home foreclosures, it’s harder to measure their impact on our collective happiness.

One way to gauge that effect is through what has become known as the economics of happiness — a set of new techniques and data to measure well-being and contentment. Hundreds of thousands of people are surveyed and asked how happy or satisfied they are with their lives, with possible answers on a scale between very unhappy and very happy.

How much happiness does money really buy? How do you weigh the relative loss in happiness resulting from a pink slip, a divorce or a diagnosis of illness? Such questions have gone from the fringes to the center of the dismal science, with economics journals now boasting thousands of articles from “Does Happiness Pay?” to “Do Cigarette Taxes Make Smokers Happier?”

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