Happiness Economics

AAA

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.

INVESTOPEDIA EXPLAINS '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. Rational Choice Theory

    An economic principle that assumes that individuals always make ...
  2. Cognitive Dissonance

    The unpleasant emotion that results from believing two contradictory ...
  3. Quality Of Life

    A highly subjective measure of happiness that is an important ...
  4. Rational Behavior

    A decision-making process that is based on making choices that ...
  5. Gross National Happiness - GNH

    An aggregate measure of a country's national production, in the ...
  6. Behavioral Economics

    The study of psychology as it relates to the economic decision ...
Related Articles
  1. Professionals

    Is Your High-Profile Job Worth The Price?

    Certain careers can be prestigious and lucrative, but there are always costs. Find out if they're worth it.
  2. Retirement

    Find Happiness By Altering Life Benchmarks

    It's not fair to compare yourself to the Joneses. Find out how to alter your aspirations and still meet your goals.
  3. Retirement

    Money Can't Buy Retirement Bliss

    Emotional snags can ruin your future happiness. Learn how you can avoid them.
  4. Economics

    Where is cost of living lowest in the world?

    Learn how the cost of living is the lowest in India based on numbers derived from the CPI and organizations like Expatistan and Numbeo.
  5. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  6. Investing

    Opportunity Cost

    Every action has a cost, even the ones you don't pursue. Find out how this is calculated.
  7. Fundamental Analysis

    How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.
  8. Economics

    How Fannie Mae And Freddie Mac Were Saved

    These mortgage giants had to be put under government conservatorship, driving home the gravity of the subprime crisis.
  9. Economics

    The Economics Of Labor Mobility

    Loosening labor restrictions has both good and bad effects for a country and its workers.
  10. Investing

    What is the Mont Pelerin Society?

    The Mont Pelerin Society was formed in 1947 when economist Friedrich von Hayek invited 39 people to meet at Mont Pelerin in Switzerland. Mostly made up of economists, the group was brought together ...

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center