What makes people happy in life? This crucial question has the potential to shake up economics. In recent years, dissatisfaction with the understanding of welfare in economics and new opportunities for empirical study of people's subjective well-being have spurred impressive and stimulating new research into the 'dismal' science, resulting in increased interest in the economics of happiness. Professor Frey and Professor Stutzer have selected contributions by leading scholars which offer a wide-ranging overview of recent developments. These include an exploration of the economic determinants of happiness, the importance of social capital and health for well-being and the new life satisfaction approach to valuing public goods. Work on utility misprediction and adaptation challenges the existing fundamentals of economics, and the role of happiness research in public policy is investigated from different perspectives.
Contents: Acknowledgements Introduction Recent Developments in the Economics of Happiness: A Select Overview Alois Stutzer and Bruno S. Frey PART I MAJOR CONTRIBUTIONS: REVIEWS OF THE NEW APPROACH 1. Bruno S. Frey and Alois Stutzer (2002), 'What Can Economists Learn from Happiness Research?' 2. Daniel Kahneman and Alan B. Krueger (2006), 'Developments in the Measurement of Subjective Well-Being' 3. Mark Kelman (2005), 'Hedonic Psychology and the Ambiguities of "Welfare"' PART II ECONOMIC DETERMINANTS OF SUBJECTIVE WELL-BEING 4. Andrew E. Clark, Paul Frijters and Michael A. Shields (2008), 'Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles' 5. Betsey Stevenson and Justin Wolfers (2008), 'Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox' 6. Richard A. Easterlin, Laura Angelescu McVey, Malgorzata Switek, Onnicha Sawangfa and Jacqueline Smith Zweig (2010), 'The Happiness-Income Paradox Revisited' 7. Erzo F.P. Luttmer (2005), 'Neighbors as Negatives: Relative Earnings and Well-Being' 8. Alois Stutzer (2004), 'The Role of Income Aspirations in Individual Happiness' 9. Rafael Di Tella, Robert J. MacCulloch and Andrew J. Oswald (2003), 'The Macroeconomics of Happiness' PART III SOCIAL CAPITAL AND HEALTH 10. John F. Helliwell and Robert D. Putnam (2004), 'The Social Context of Well-Being' 11. Leonardo Becchetti, Alessandra Pelloni and Fiammetta Rossetti (2008), 'Relational Goods, Sociability, and Happiness' 12. Angus Deaton (2008), 'Income, Health, and Well-being Around the World: Evidence from the Gallup World Poll' PART IV VALUING PUBLIC GOODS: THE LIFE SATISFACTION APPROACH 13. Bernard M.S. van Praag and Barbara E. Baarsma (2005), 'Using Happiness Surveys to Value Intangibles: The Case of Airport Noise' 14. Simon Luechinger (2009), 'Valuing Air Quality Using the Life Satisfaction Approach' PART V UTILITY MISPREDICTION AND ADAPTATION 15. Daniel Kahneman and Richard H. Thaler (2006), 'Anomalies: Utility Maximization and Experienced Utility' 16. Andrew E. Clark, Ed Diener, Yannis Georgellis and Richard E. Lucas (2008), 'Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis' 17. Luis Rayo and Gary S. Becker (2007), 'Evolutionary Efficiency and Happiness' PART VI PUBLIC POLICY 18. Richard Layard (2006), 'Happiness and Public Policy: A Challenge to the Profession' 19. Bruno S. Frey and Alois Stutzer (2012), 'The Use of Happiness Research for Public Policy'
