It is a new and relatively exotic theme for economists that was discussed during this round table: happiness. Based on data from international surveys where individuals are asked about their well-being, economists try to identify the sources of variation in happiness with macroeconomic and microeconomic levels.
Video summary:
– Interview with Andrew Clark, research director Cnrs (audio and video).
– Intervention by Nicolas Sauger, research manager Cepivof.
– Intervention by Andrew Clark, research director Cnrs.
It is a new and relatively exotic theme for economists that was discussed during this round table: happiness.
According to the standard microeconomic calculation, the rational agent makes his choices by maximizing a utility function, supposed to model the degree of satisfaction of individuals. We assume that agents are more happy when they consume more, work less, etc. Until about fifteen years ago, no empirical work, however, tried to directly measure the determinants of the satisfaction of individuals.
It is this lack that the economy of happiness proposes to fill. Based on data from international surveys where individuals are asked about their well-being, economists try to identify the sources of variation in happiness with macroeconomic and microeconomic levels.
At the macroeconomic level, the average satisfaction level appears positively correlated with GDP per capita. However, European data clearly indicates two components of happiness: the individual dimension and the collective dimension. If Europeans, whatever their country, seem rather satisfied with their personal situation, they are generally more critical when they are asked about their government, the functioning of public services or the state of democracy in their country.
At the microeconomic level, researchers do not know well what makes people happy. For a large number of variables, individual satisfaction is strongly linked to comparison to others. Individuals are indifferent to an increase in their income when the income of others increases in the same way ; What matters to them is to be richer than their neighbors. Likewise, health problems seem less to carry when shared within the couple.
We also observe phenomena of addiction: all other things being equal, an increase in income has a positive impact only in a transitory manner. Individuals get used to money ; The more I have won in the past, the more I have to win today and tomorrow to maintain my level of satisfaction. There are other states to which one does not get used to it. Thus, being unemployed makes it very sustainable.
Other determinants have been tested such as marriage, children, but the field of happiness economy remains very open. Among other things, the impact of environmental quality or education on the well-being of people has not been studied. Beyond the entertaining aspect of the subject, these works have important implications for economic policy: if the objective of a government is to maximize the happiness of its citizens, the results that we have today indicate that it is better to conduct return to employment than to increase proportionally the income of all.
Interview with Andrew Clark, research director, Cnrs.
Interview by Florian Mayneris for The life of ideas.
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