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.

  1. Mathematical Economics

    Mathematical economics is a form of economics that relies on ...
  2. Quality Of Life

    Quality of life is a highly subjective measure of happiness that ...
  3. Econometrics

    The application of statistical and mathematical theories to economics ...
  4. Lawrence Klein

    An American economist and winner of the 1980 Nobel Memorial Prize ...
  5. Organisation for Economic Co-operation ...

    A group of 30 member countries that discuss and develop economic ...
  6. Economic Think Tank

    An economic think tank is an organization whose mission it is ...
Related Articles
  1. Personal Finance

    3 Habits Happy People Use in Financial Planning

    Following these three habits can help make you more financially sound, and potentially happier.
  2. Personal Finance

    When Higher Income Doesn't Lead to Increased Happiness

    The happiness that comes with increased income is often negated by increased debt.
  3. Insights

    How to Find Happiness Through Work

    Besides earning more money, doing these things can foster financial and emotional health.
  4. Insurance

    Ways Money Can Buy A Little Happiness

    Money can't buy happiness for everyone, but it may be able to buy you time, security and experiences.
  5. Financial Advisor

    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.
  6. Personal Finance

    Your Financial Well-Being is in Your Control

    Your financial well-being can be increased by factors that are easier to change than your income or education.
  7. Investing

    Happy Customers, Happy Shareholders

    There is a correlation between customer satisfaction and shareholder returns.
  8. Small Business

    6 Ways To Learn To Love Your Job

    If you can't quit, these tips will help you make the most of your work situation.
  9. Retirement

    When Retirement's Getting You Down

    The secret to avoiding depression in retirement is to replace the social connections, steady routine and sense of purpose that your work life delivered.
  10. Financial Advisor

    Why Millionaires are Running Scared

    Most millionaires don't identify as rich and worry about maintaining their wealth. Here's why.
  1. What is the relationship between human capital and economic growth?

    Learn what human capital and economic growth are, how human capital is related to economic growth and see examples of the ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. What are examples of economic values in use today?

    Learn some examples of economic values in use today as the global marketplace expands and new theories emerge to explain ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center