Happiness: A Revolution in Economics

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A leading economist discusses the potential of happiness research (the quantification of well-being) to answer important questions that standard economics methods are unable to analyze.Revolutionary developments in economics are rare. The conservative bias of the field and its enshrined knowledge make it difficult to introduce new ideas not in line with received theory. Happiness research, however, has the potential to change economics substantially in the future. Its findings, which are gradually being taken into account in standard economics, can be considered revolutionary in three respects- the measurement of experienced utility using psychologists' tools for measuring subjective well-being; new insights into how human beings value goods and services and social conditions that include consideration of such non-material values as autonomy and social relations; and policy consequences of these new insights that suggest different ways for government to affect individual well-being. In Happiness, emphasizing empirical evidence rather than theoretical conjectures, Bruno Frey substantiates these three revolutionary claims for happiness research. After tracing the major developments of happiness research in economics and demonstrating that we have gained important new insights into how income, unemployment, inflation, and income demonstration affect well-being, Frey examines such wide-ranging topics as democracy and federalism, self-employment and volunteer work, marriage, terrorism, and watching television from the new perspective of happiness research. Turning to policy implications, Frey describes how government can provide the conditions for people to achieve well-being, arguing that a crucial role is played by adequate political institutions and decentralized decision making. Happiness demonstrates the achievements of the economic happiness revolution and points the way to future research.

Reviews

"An outstanding overview of the subject by a world leader in the field. Frey has an instinct for the right, revealing question combined with the techniques to find an illuminating answer."--Lord Richard Layard, Emeritus Professor of Economics, London School of Economics "Long a pioneer in the application of psychology to economics, Bruno Frey provides a masterful synthesis of happiness research, and demonstrates both its policy value and growing challenge to economic orthodoxy."--Richard A. Easterlin, Department of Economics, University of Southern California -- Richard Easterlin "Long a pioneer in the application of psychology to economics, Bruno Frey provides a masterful synthesis of happiness research, and demonstrates both its policy value and growing challenge to economic orthodoxy." Richard A. Easterlin , Department of Economics, University of Southern California

Author Bio

Burno S. Frey is Professor of Economics at the University of Zurich, Distinguished Professor of Behavioural Science at Warwick Business School, University of Warwick, and Research Director of CREMA (the Center for Research in Economics, Management, and the Arts).