The economics of eudaimonia

Research in the Economics of Happiness has recently paid increasing attention to ‘eudaimonia’, which is a conception of happiness originated in ancient Greek philosophy, and in particular in Aristotle’s philosophy. Since ‘eudaimonia’ is a way of life rather than a circumscribed goal, its understanding requires a dynamic analytical structure. To this end, the paper provides two main contributions. First, in order to facilitate reading by the economists of Aristotle’s work, this is translated in modern economic terms, i.e. eudaimonia is described as an individual activity that transforms inputs into outputs. Second, this description is reformulated, with the help of studies in psychology and anthropology, in a modern ‘economic approach to eudaimonia’, which focuses on human development, defined as the development of the skills which are typically human. A number of implications are then discussed: about how some weaknesses of Aristotle’s conception of eudaimonia can be amended (e.g. the objective/subjective reconciliation); about the greater robustness of eudaimonia with respect to hedonism as two alternative pathways to happiness that people can choose; and about the advantages of the policy implications of eudaimonia.