Happiness: The Economic Analysis (German)

Institute for Empirical Research in Economics University of Zurich Working Paper No. 417

20 Pages Posted: 3 Jul 2009

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Alois Stutzer

University of Basel - Faculty of Business and Economics; IZA Institute of Labor Economics

Date Written: June 8, 2009

Abstract

In economics there is presently an almost revolutionary development. The direct measurement of subjective welfare challenges traditional economics, inspires it, and opens new avenues for scientific research. The approaches and possibilities of an economic analysis of happiness are shown and illustrated with two specific applications. The relationship between income and life satisfaction is strongly shaped by the aspiration level serving to evaluate life conditions. The aspiration levels are formed by social comparisons and adaptation processes. The Life Satisfaction Approach is a new method to capture the value of public goods. The short discussion of governmental „happiness policy“ from a constitutional viewpoint suggests a comparative institutional analysis of subjective well-being. The happiness revolution in economics is only at its beginning. More insights concerning institutions allowing people to pursue their own conception of a good life are to be expected.

Keywords: happiness, life satisfaction, economics, income, terrorism

JEL Classification: A12, D31, H41

Suggested Citation

Frey, Bruno S. and Stutzer, Alois, Happiness: The Economic Analysis (German) (June 8, 2009). Institute for Empirical Research in Economics University of Zurich Working Paper No. 417. Available at SSRN: https://ssrn.com/abstract=1427738 or http://dx.doi.org/10.2139/ssrn.1427738

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

Alois Stutzer

University of Basel - Faculty of Business and Economics ( email )

Peter Merian-Weg 6
4002 Basel
Switzerland
0041 61 267 3361 (Phone)
0041 61 267 3340 (Fax)

HOME PAGE: http://www.wwz.unibas.ch/stutzer/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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