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The Economics of Happiness

Author

Listed:
  • Bruno S. Frey
  • Alois Stutzer

Abstract

Economists have long considered themselves fortunate that micro-economic theory needs only be based on relative utility, as it is widely believed that utility is not measurable in absolute terms. But this view is no longer valid. The measurement of happiness constitutes a good approximation to utility. It is shown that research on happiness provides new evidence on important issues of economic theory and policy. In particular, it is shown how unemployment, income and inflation affect self-reported subjective well-being. The results are partly in line with accepted economics but partly throw doubt on it. Institutions, such as the type of democracy and the extent of political decentralisation, also systematically affect individual happiness.

Suggested Citation

  • Bruno S. Frey & Alois Stutzer, 2002. "The Economics of Happiness," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(1), pages 25-41, January.
  • Handle: RePEc:wej:wldecn:90
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    Cited by:

    1. Nauro F. Campos & Renata Leite Barbosa, 2009. "Paintings and numbers: an econometric investigation of sales rates, prices, and returns in Latin American art auctions," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 28-51, January.
    2. Besser, T. & Mann, S., 2015. "Which farm characteristics influence work satisfaction? An analysis of two agricultural systems," Agricultural Systems, Elsevier, vol. 141(C), pages 107-112.
    3. repec:bla:jorssa:v:180:y:2017:i:1:p:225-246 is not listed on IDEAS
    4. Friedrichsen, Jana & Zahn, Philipp, 2014. "Political support in hard times: Do people care about national welfare?," European Journal of Political Economy, Elsevier, vol. 35(C), pages 23-37.
    5. Bruno Frey, 2011. "Tullock challenges: happiness, revolutions, and democracy," Public Choice, Springer, vol. 148(3), pages 269-281, September.
    6. Angelini, Viola & Bertoni, M & Corazzini, L., 2014. "Unpacking the determinants of life satisfaction," Research Report 14014-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    7. Andreas Reinstaller, 2013. "An evolutionary view on social innovation and the process of economic change," WWWforEurope Working Papers series 43, WWWforEurope.
    8. Marco Bertoni & Luca Corazzini, 2015. "Life Satisfaction and Endogenous Aspirations," SOEPpapers on Multidisciplinary Panel Data Research 761, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. Cheah, Yong Kang & Tang, Chor Foon, 2011. "The role of socio-demographic factors on self-rated happiness: The case of Malaysia," MPRA Paper 29419, University Library of Munich, Germany.
    10. Markussen, Thomas & Fibaek, Maria & Tarp, Finn & Nguyen, Do Anh Tuan, 2014. "The happy farmer: Self-employment and subjective well-being in rural Vietnam," WIDER Working Paper Series 108, World Institute for Development Economic Research (UNU-WIDER).
    11. María Laura Arrosa & Néstor Gandelman, 2016. "Happiness Decomposition: Female Optimism," Journal of Happiness Studies, Springer, vol. 17(2), pages 731-756, April.
    12. Helen V. Milner & Daniel L. Nielson & Michael G. Findley, 2016. "Citizen preferences and public goods: comparing preferences for foreign aid and government programs in Uganda," The Review of International Organizations, Springer, vol. 11(2), pages 219-245, June.
    13. repec:dgr:rugsom:14014-eef is not listed on IDEAS
    14. Marta Suárez-Varela & Jorge Guardiola & Francisco González-Gómez, 2016. "Do Pro-environmental Behaviors and Awareness Contribute to Improve Subjective Well-being?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 11(2), pages 429-444, June.
    15. John Malcolm Dowling & Yap Chin Fang, 2006. "Homeostasis and Well Being," Working Papers 09-2006, Singapore Management University, School of Economics.
    16. Alex Coram & Lyle Noakes, 2006. "Relative advantage, queue jumping, and welfare maximizing wealth distribution," UMASS Amherst Economics Working Papers 2006-08, University of Massachusetts Amherst, Department of Economics.
    17. Jozef Haczynski, 2016. "Happy and Healthy Aging. The Analysis of the Relationship Between Age, Health, Education and Happiness on International Social Survey Programme Data (Szczesliwe i zdrowe starzenie sie. Analiza zwiazku," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 14(60), pages 24-39.

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