Children, Spousal Love, and Happiness: An Economic Analysis In this paper we examine how children affect happiness and relationships within a family by analyzing two unique questions in the National Longitudinal Study of Youth’s 1997 cohort. We find that (a) presence of children is associated with a loss of spousal love; (b) loss of spousal love is associated with loss of overall happiness; but...

Happiness is generally considered to be an ultimate goal in life; virtually everybody wants to be happy. The United States Declaration of Independence of 1776 takes it as a self-evident truth that the “pursuit of happiness” is an “unalienable right”, comparable to life and liberty. It follows that economics is – or should be – about individual happiness. In particular, the question is how do ec...

Over the past few years, there has been a steadily increasing interest on the part of economists in happiness research. This paper argues that reported subjective well-being is a satisfactory empirical approximation to individual utility and endeavors to provide an impression of this new, and challenging, development. We study data from the German Socio-Economic Panel to better understand (i) t...

Editorials 514 Bhutan was the first country in the world to pursue happiness as a state policy. The Bhutanese concept of happiness is deeper than the common meaning of happiness in industrialized countries. The philosophy of gross national happiness has several dimensions: it is holistic, recognizing people's spiritual, material, physical or social needs; it emphasizes balanced progress; it vie...

The measurement of individual happiness challenges the notion that revealed preferences only reliably and empirically reflect individual utility. Reported subjective well-being is a broader concept than traditional decision utility; it also includes concepts like experience and procedural utility. Microand macroeconometric happiness functions offer new insights on determinants of life satisfact...

This paper intends to provide an evaluation of where the economic research on happiness stands and in which interesting directions it might develop. First, the current state of the research on happiness in economics is briefly discussed. We emphasize the potential of happiness research in testing competing theories of individual behavior. Second, the crucial issue of causality is taken up illus...

What Creates Happiness? The economy and the economic policies of government are major concerns for people today. Upon reflection, however, many would agree that the ultimate goal in life should be happiness and satisfaction with life, rather than economic growth, high personal income or a colorful career itself. No doubt, income and consumption (which are what economists normally analyze as pro...

Many governments around the world are considering measures of happiness or subjective wellbeing as alternatives to gross domestic product (GDP) for the purpose of guiding economic policymaking. Compared to GDP, happiness measures promise to better capture the quality of life of a nation’s citizens and lead to policies that are more effective and equitable. However, there are a number of problem...

Countries having a more individualist culture have enjoyed higher long-run growth than countries with a more collectivist culture. Individualist culture attaches social status rewards to personal achievements and thus, provides not only monetary incentives for innovation but also social status rewards, leading to higher rates of innovation and economic growth.

Until recently, it was widely held that happiness fluctuates around set points, so that neither individuals nor societies can lastingly increase their happiness. Even though recent research showed that some individuals move enduringly above or below their set points, this does not refute the idea that the happiness levels of entire societies remain fixed. Our article, however, challenges this i...