Happiness A Revolution in Economics

Revolutionary developments in economics are rare. The conservative bias of the fieldand its enshrined knowledge make it difficult to introduce new ideas not in line with receivedtheory. Happiness research, however, has the potential to change economics substantially in thefuture. Its findings, which are gradually being taken into account in standard economics, can beconsidered revolutionary in three respects: the measurement of experienced utility usingpsychologists' tools for measuring subjective well-being; new insights into how human beings valuegoods and services and social conditions that include consideration of such non-material values asautonomy and social relations; and policy consequences of these new insights that suggest differentways for government to affect individual well-being. In Happiness, emphasizing empirical evidencerather than theoretical conjectures, Bruno Frey substantiates these three revolutionary claims forhappiness research. After tracing the major developments of happiness research in economics anddemonstrating 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 andfederalism, self-employment and volunteer work, marriage, terrorism, and watching television fromthe new perspective of happiness research. Turning to policy implications, Frey describes howgovernment can provide the conditions for people to achieve well-being, arguing that a crucial roleis played by adequate political institutions and decentralized decision making. Happinessdemonstrates the achievements of the economic happiness revolution and points the way to futureresearch.Bruno S. Frey is Professor of Economics at the University of Zurich, Visiting Professor atthe Swiss Federal Institute of Technology, and Research Director of CREMA (Center for Research inEconomics, Management, and the Arts). He is co-editor of Economics and Psychology: A Promising NewCross-Disciplinary Field (MIT Press, 2007).