Happiness Economics

According to Wikipedia happiness economics is the study of a country’s well-being by combining economists’ and psychologists’ techniques. Up to a certain threshold, increases in incomes result in increases in happiness, but beyond a certain level, further increases in incomes do not lead to higher levels of happiness.

 The goal of happiness economics is to determine from what source people derive their well-being. Here are the findings from such statistical happiness research as reported by the World Bank Institute: 

 1. For a person, money does buy a reasonable amount of happiness. But it is useful to keep this in perspective. Very loosely, for the typical individual, a doubling of salary makes a lot less difference than life events like marriage.

 2. For a nation, things are different. Whole counties- at least in the west almost all the research has been done - do not seem to get happier as they get richer. 

3. Happiness is U-shaped in age. Women report higher well-being than men. Two of the biggest negatives in life are unemployment and divorce. Education is associated with high reported levels of happiness even after controlling for income. 

4. The structure of a happiness equation has the same general form in each industrialized country (and possibly in developing nations, though only a small amount of evidence has so far been collected). In other words, the broad statistical patterns look the same in France, Britain, and Australia. 

5. There is some evidence that the same is true in panels of people, i.e., in longitudinal data. Particularly useful evidence comes from looking at windfalls like lottery wins,

 6. There is adaptation, Good and bad life events wear off-at least partially-as people get used to them, 

7. Relative things matter a great deal. Above is the World Happiness Map showing the average self-reported happiness in different nations. 

It was created with the date of Satisfaction With Life Scale from a paper by Adrian G. White using date from a metastudy. It is an attempt to show life satisfaction in different nations. From the map, we can see that Malaysians are a happy lot. By the way, Malaysia was ranked No. 17 in the 2006 International Ranking.