Happiness Economics

What is Happiness Economics?

Happiness Economics is the academic study wherein the relation between the economic issues, like wealth and employment; and individual satisfaction is evaluated.

This study attempts to use the analysis of econometric to find out what factors decrease and increase the well-being and life quality of a human.

How does it Work?

Happiness economics is quite a newer branch of research. It aims at identifying the economic factors of well-being, specifically by asking people to fill up surveys. Earlier, economists didn’t bother compiling and assessing such research data and preferred to define the factors that drive happiness from their own assumptions and understandings.

Moreover, determining people’s well-being and an individual’s preference is not a simple task. Considering that happiness is a subjective measure, it could be quite laborious to categorize. Irrespective of the challenges and issues, the ones who study the concept of happiness economics continue to have different opinions on the vitality to evaluate aspects that may impact the life quality, beyond common areas of the economic study, like wealth and Income.

These people aim to achieve their objectives by sending surveys that directly ask people whether they can rank their happiness level. They also evaluate the indices tracking the life quality in varying countries, concentrating on aspects, like access to health care, literacy level, life expectancy, per capita, Gross Domestic Product (GDP), political freedom, pollution level, social support, cost of living, and more.

Happiness Economics Example

Over the last three decades or so, several happiness economics metrics have come into the limelight. The most common ones are Gross Domestic Happiness (GDH) and the happiness indices that aim to keep an eye on the well-being of individuals residing in different countries.

As per the happiness index 2018, the top 10 happiest countries are:

• Finland
• Norway
• Denmark
• Iceland
• Switzerland
• Netherlands
• Canada
• New Zealand
• Sweden
• Australia

Europe, which is the home to several countries, top the list because it is specifically engaged with happiness economics. The Organization for Economic Cooperation and Development (OECD) of the region acquires data on happiness economics and ranks the 35 member countries on the Basis of health, civic engagement, environment, education, employment, income, and housing.

Generally, the research of happiness economics found that people residing in wealthier countries along with higher, qualitative institutions turn out to be happier in comparison to those who live in countries that have lesser wealth and poor institutions.