Happiness Economics

DEFINITION of 'Happiness Economics'

The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth. Happiness economics attempts to use econometric analysis to discover what factors increase and decrease human well-being and quality of life. One major study of happiness economics has been conducted by the Europe-based Organization for Economic Cooperation and Development. The OECD ranked happiness in its 34 member countries, based on factors such as housing, income, jobs, education, environment, civic engagement and health. The study's purpose is to help governments design better public policies.

BREAKING DOWN 'Happiness Economics'

Happiness research has found that people in richer countries with good institutions tend to be happier than people in poorer countries with bad institutions. At a certain point, increases in annual income no longer bring greater happiness. This is estimated to fall somewhere between $75,000 and $120,000. Working more increases happiness up to the point where people feel overworked by consistently long hours, and unemployment almost always makes people very unhappy, as does poor health. Work commutes longer than about 20 minutes also make us unhappy, and so does high-interest consumer debt.

RELATED TERMS
  1. Hedonic Treadmill

    The tendency of a person to remain at a relatively stable level ...
  2. Quality Of Life

    A highly subjective measure of happiness that is an important ...
  3. Econometrics

    The application of statistical and mathematical theories to economics ...
  4. Business Economics

    The study of the financial issues and challenges faced by corporations. ...
  5. Lawrence Klein

    An American economist and winner of the 1980 Nobel Memorial Prize ...
  6. Organization for Economic Cooperation ...

    A group of 30 member countries that discuss and develop economic ...
Related Articles
  1. Personal Finance

    Small Life Changes That Save You Money

    There are a number of ways your personal life can impact your bottom line.
  2. Personal Finance

    How to Budget and Spend to Maximize Your Happiness

    Spending money on others and buying experiences are just two of the five key principles that lie in money correlating to happiness.
  3. Financial Advisor

    Is This the Most Important Retirement Investment?

    Giving back in retirement is an oft-ignored but important investment. Giving charitably can be a force for happiness for you, too. Here's what to consider.
  4. Markets

    Is Infinite Economic Growth on a Finite Planet Possible?

    While the finite nature of Earth's resources limits the direction of economic growth, it does not mean that infinite economic growth is impossible.
  5. Insights

    5 Lessons That Athletes Can Teach Investors

    Discover the lessons great athletes can teach investors about building wealth and achieving greater success in their investment performance.
  6. Financial Advisor

    Top Tips for Helping Clients Sustain Wealth

    High-net-worth individuals face a number of potential challenges when passing wealth down, but it is possible to build generational wealth.
  7. Financial Advisor

    Why Millionaires are Running Scared

    Most millionaires don't identify as rich and worry about maintaining their wealth. Here's why.
  8. Markets

    Millennials Favor Job Quality Over Big Paychecks

    When it comes to job quality, millennials are willing to take a $7,600 pay cut for it.
  9. Financial Advisor

    Where and Why Advisors Are the Happiest (or Not)

    Advisors are less satisfied with their employers this year compared to last, a new study reveals. Here's why and what makes them happy.
  10. Markets

    Economics 101

    Economics is the study of how individuals, governments, businesses and other organizations make choices that effect the allocation and distribution of scarce resources.
RELATED FAQS
  1. What is the relationship between human capital and economic growth?

    Learn what human capital and economic growth are and how human capital is related to economic growth, and see examples of ... Read Answer >>
  2. Is it always a good investment to get more professional education?

    For example will it pay off for a registered nurse in her mid-forties to take on about $70,000 in debt to get a nurse practitioners' ... Read Answer >>
  3. What are key economic growth rates that can be used to determine the economic health ...

    Discover the indicators that correlate with real economic health, and learn why many traditional metrics do not function ... Read Answer >>
  4. What impact does economics have on government policy?

    Learn about the impact of economic conditions on government policy and understand how governments engineer economic conditions ... Read Answer >>
  5. Why are corporations so concerned about their stock price?

    When the share price of a company is high or increasing, generally corporations, or more specifically their management teams, ... Read Answer >>
  6. How does economics study human action and behavior?

    Find out why economics can be considered a deductive social science, like sociology, and how human action and behavior informs ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center