The Economics of Happiness
Wednesday 27th January 2010 - 8:30pm - 10:00pm
The Economics of Happiness
Research regarding correlations between wealth and happiness has led to conflicting conclusions: on the one hand, the pursuit of “more” does not always yield “better”. This principle is captured in the Easterlin paradox – the idea that happiness at a national level does not increase with wealth once basic needs are fulfilled. On the other hand, higher GDP is associated with higher standards of living, including better healthcare systems, greater economic opportunity, lower infant mortality, higher literacy rates and more leisure time, which are typically characteristics of the “good life”.
Recent studies in psychology and behavioural sciences have complicated the Easterlin paradox to an even greater degree by revealing that rich people within a society typically rate themselves as happier. Data has also shown that people are typically bad at forecasting their own happiness levels and at delaying gratification in favour of greater, long-term happiness.
In the wake of the economic crisis, a number of leaders have stressed the need to develop policies that follow from value systems that enable citizens to realize the good life, rather than simply maximize growth and profits. If improving happiness is considered a principle that should guide either political or economic decision-making, how can it be measured? The United Nations established the Human Development Index as one effort to quantify social well-being in a more nuanced way than GDP. Bhutan has developed a metric for “gross national happiness”. The growing problem of climate change has also clarified that the need to include sustainability, limiting personal consumption and potential harm to the environment as parameters in such frameworks.
The idea of a framework for happiness or social well-being, which has gained popularity in the social sciences, has generated caution within religious and humanistic traditions. At the individual level, concepts of happiness can change dramatically over the course of a person’s life. At the social level, there is typically a trade-off between agreeing on social conceptions of the good life and allowing individual autonomy. The most fundamental question continues to be: What is happiness exactly – fulfilment? Joy? In the Buddhist tradition, measuring happiness makes about as much sense as quantifying meditation. So how is it possible to maximize happiness at the social or national level when it cannot be agreed what it means or how to measure it?
Despite these differing conceptions, there was little disagreement on the following maxims:
• Lasting happiness is nearly impossible to achieve if it is calibrated to external conditions
• Connections to people and the strength of relationships contribute to living a fulfilling life
• Acts of charity, big and small, typically give people joy
• Happiness often grows as one gets older
Nariman Behravesh, Chief Economist, IHS Global Insight, USA
Teresa K. Kennedy, Chief Executive Officer, PWR Brokers Incorporated, USA; Young Global Leader
Reinhard Marx, Archbishop of Munich and Freising, Germany
Nishin Nathwani, Global Changemaker, British Council Global Changemakers, Canada
Matthieu Ricard, Director, Karuna-Shechen, Nepal
Anthony Scaramucci, Managing Partner, Challenger Financial Services Group, Australia
Richard H. Thaler, Ralph and Dorothy Keller Distinguished Service Professor of Economics and Behavioral Science, University of Chicago Booth School of Business, USA; Global Agenda Council on Decision-making & Incentive Systems
Stewart Wallis, Executive Director, New Economics Foundation, United Kingdom; Global Agenda Council on Faith
This summary was prepared by Mary Bridges. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.
Copyright 2010 World Economic Forum
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of the World Economic Forum.
Wednesday 27 January
Executive Director, New Economics Foundation, United Kingdom
Graduate in Natural Sciences, Cambridge University; Master's in Business and Economics, London Busin...
Richard H. Thaler
Ralph and Dorothy Keller Distinguished Service Professor of Economics and Behavioral Science, University of Chicago Booth School of Business, USA
1967, BA, Case Western Reserve University; 1970, MA and 1974, PhD, University of Rochester. 1988-95,...
Cardinal of Munich and Freising, Germany
1989, doctorate in theology. 1996, Auxiliary Bishop of Paderborn and Titular Bishop of Petina; 2001,...
Founder and Managing Partner, SkyBridge Capital, USA
1986, BA (Hons) in Economics, Tufts Univ.; 1989, Harvard Law School. 1989-96, at Goldman Sachs & Co....
Chief Economist, IHS, USA
BSc, MIT; PhD, University of Pennsylvania. With IHS: directs forecasting process; develops economic ...
President and Co-Founder, Karuna-Shechen, France
PhD in Cellular Genetics, France. Buddhist monk studying Buddhism in Himalayas for last 40 years. Fo...
Teresa K. Kennedy
Founder and Chief Executive Officer, Power Living Enterprises, USA
Dual BA, Wellesley; MBA, Harvard; PhD, World Religions. Certified: Professional Coach; Holistic Heal...
Global Changemaker, British Council Global Changemakers, Canada
High school student, Ontario, Canada. Founded first Amnesty International group at his school at age...