Happiness: The View from Economics

Based on recent research on happiness undertaken by psychologists and economists, several countries such as France and the United Kingdom have made the happiness of the population a major policy goal, thus following the lead of the Kingdom of Bhutan whose king invented the notion of Gross National Happiness decades ago. This lecture will deal with two sets of questions: - What do we know about the determinants of happiness? Is it true that an increase in income does not raise individual well-being? What are other significant factors? What open questions remain? - Should governments strive to maximize people’s happiness or life satisfaction? At first sight this appears to be an attractive goal; however, I will argue that it is not. For the notion of a happiness maximizing government resembles that of a “benevolent dictator” which should not be pursued in a democracy.