Economics of Happiness

Sometimes we sit back and let the happiness soak right into our bones. We covet the feeling to still be there when we turn a day older tomorrow.

We close our eyes and savour the moment, For the first time in forever our body and mind relax. At that moment there are no expectations upon us, no deadlines and no schedules to meet. We are in, we’ll make it, we are the winner. It is all about us.

And yet I ask you, what is happiness?

Most of us plausibly don’t believe we need a formal definition of happiness; We know it when we feel it and often use the term to describe a range of positive sentiments.

Yet to truly understand happiness's effects and causes, we need to define it. Many use the term interchangeably with “subjective well-being,” which they measure by simply asking people to describe how satisfied they feel with their own lives and how much positive and negative emotion they’re experiencing.

In her 2007 book, The How Of Happiness, psychology researcher Sonja Lyubomirsky describes happiness as “The experience of joy, contentment, or positive well-being, combined with a sense that one’s life is good, meaningful, and worthwhile.”

Realistically speaking, everyone is happy (or unhappy) for a different combination of secluded, demographic, gender, cultural and spiritual reasons. Some people are comfortable with their lot, while others are always looking to keep up with the ones a few steps ahead of them.

GNH, which prefers the goal of happiness over the goal of wealth, serves as a counterweight to the universal Western-driven focus on the economic signals of Gross National Product or Gross Domestic Product (GDP).

GNH asserts a view that people living on less than $1 a day could be happier than much wealthier and physically endowed, but much more stressed out and disconnected!

People in the latter countries are more probable to be unhappy because of a slow Internet connection or a delayed coffee purchased “to go”. While the 1 billion people in the world with not enough to eat daily may more understandably be unhappy that life has not been as fair to them as it has to those with easy, “taken for granted”, access to life’s essentials.

No matter our experience, expectations framed by our exposure to wealth and opportunity in the outside world, in addition to our standard of living, of course, are key to determining our level of happiness.

However, according to an article by Mark Notaras, if you’ve grown up as an only child in an industrialized, mass media-dominated environment, you could be more likely to feel discontented having been subject to a million advertisements before the age of 18 compelling you to buy products, designed solely to make you look better and “Be cooler”, that you don’t actually necessitate!

As the saying goes "Materialistic happiness isn't equivalent to other forms of elation"

And perhaps this is where the economy plunges in.

The World Happiness Report accurately states that questions about who is happy and why are complex and that both economic and spiritual happiness can contribute to an overall picture of happiness.

While “happier countries tend to be richer countries” says the report, “more important for happiness than income are social factors like the strength of social support, the absence of corruption and the degree of personal freedom”.

Using the methodology of a 1–10 scale of happiness, the world’s happiest countries are states like Denmark and Norway which rate 7.6 on the happiness meter!

Does that mean that countries that dwell in poverty lack happiness? Not necessarily.

For a long time, inequality has been linked to lower levels of trust in others and a reduced sense of fairness; trust and fairness are both predictive of happiness. On the contrary income inequality is linked with fewer economic opportunities, less social mobility, poorer overall health, and higher levels of crime.

To test this idea, researchers looked into patterns of per capita income, inequality, and happiness in two datasets containing data from 34 countries.

The first set consisted of 16 developed economies such as France, Finland, Spain and Japan.

The pattern here, as was supposed, found that when income inequality in a country was low, on average an increase in GDP per capita associated with an increase in life satisfaction. When income inequality was high, an increase in GDP per capita was practically unrelated to life satisfaction

The data for the second set of analyses included a general survey of 18 Latin American countries such as Argentina, Brazil, and Colombia. Here, they discovered evidence that levels of inequality could explain the relationship between economic growth and happiness.

Yet to dismay, there was a wrinkle: For this set of countries, economic growth was associated with a negative overall effect on happiness. Even when inequality was low, GDP per capita increase was associated with a small decrease in life satisfaction. In other words, income growth was on average deleterious to happiness in these countries in the studied period, with inequality further aggravating the negative effect of economic growth on happiness.

So, Does economic growth really make us happy? If not, why is humankind so focused on it?

And even if there is a link between economic growth and happiness, would we really be happy deep down if we knew that our current happiness may be at the price of the happiness of our descendants?

As a matter of fact, what would you be happy to do with it?

The question is for you to ask.

And answer.

- Saniya (Blog Writer)

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