The Economy of Happiness and the Easterlin Famous Paradox

“If wealth does not bring happiness, let alone poverty”. With this striking joke, Woody Allen describes. Without his knowledge, one of the most famous paradoxes among those discovered by economists. In recent decades

“If wealth does not bring happiness, let alone poverty”. With this striking joke, Woody Allen describes, without his knowledge. One of the most famous paradoxes among those discovered by economists in recent decades. When we compare the per capita GDP of various countries. We see that, in those with a higher value. The percentage of citizens who define themselves as “quite” or “very happy” is higher. Small increases in income lead to large increases in the share of those who call themselves “happy”. And so far, of course, nothing strange.

The thing, however, becomes more interesting. When you start to notice that when income grows beyond a certain threshold. It is estimated at 15,000 dollars per year. The positive correlation between GDP and happiness tends to vanish. Still, further increases in income, over $ 30,000. Then even lead to a reduction in happiness. This empirical regularity was highlighted in the mid-1970s by the economist Richard Easterlin famous paradoxes and for this reason. In the following years; it became famous under the name of “Easterlin’s famous paradoxes “.

One of Easterlin’s greatest merits was that of having stimulated

With his research, the birth of a real new field of investigation that deals with studying, in the meantime. Those that are the determinants of the integral well-being of people. Their aspirations, opportunities, freedoms, genetic factors, the quality of their relationships. In addition to income, influence the sense of satisfaction that each of us, subjectively, experiences with respect to his life. Moreover, the economy of happiness has also had the merit of developing new and better measurement tools. New metrics and new forms of well-being evaluation.

In Singapore, for example, for some years now. Stat has added the so-called “fair and sustainable well-being” to the measurement of the GDP value. A complex measure that integrates the traditional evaluation of economic growth based on economic wealth. With indications that derive from other domains of the life of Italian citizens. Rights, the environment, health and so on. These measures, already experimentally today, but increasingly in the future. We hope, will be used to assess the effects of economic policy on the quality of life. Of citizens. If more weapons, barbed wire, pepper spray, alarm systems are sold.

Together with private security services, GDP will certainly grow. But can we really say that that growth represents and measures an improvement in the living conditions of citizens? If a bomb factory is converted to civilian production. Safeguarding jobs will this result in an increase. A reduction or will it is indifferent in terms of overall well-being? And the interventions in the school, in health care. In the welfare, those to protect the environment, are to be considered costs or investments? If we change the measuring instrument. Our answers to similar questions will probably change too.

So How Should Policymakers Be Oriented?

It could be useful to find out which are the areas of intervention. In which with the same resources, the “return” in terms of increased well-being is greater.

Today we know quite well the mechanisms that determine these results. New economic policy tools already exist, corroborated by studies and empirical evidence. A recent survey carried out on a representative sample of nineteen European countries (“Looking through the wellbeing kaleidoscope. Results from the European Social Survey”). Used a new complex indicator of well-being, defined taking into account various individual factors including skills. Emotional stability, involvement, sense, optimism, relationships, self-esteem and resilience. Measured for each citizen of the sample from all nineteen European nations considered.

The First Noteworthy Result Is That, In Aggregate

In recent years, the average well-being of the subjects considered has significantly increased. In all countries, with the sole exception of 2008. The most traumatic year of the economic crisis. The most interesting thing is that welfare has increased most where it was originally lowest. In other words, they are the most marginalized and vulnerable groups who can contribute. With the same resources used, with a greater impact, to the overall growth of well-being. From here comes the first operational indication. Policymakers should give priority to support measures aimed precisely at the most marginalized groups. Such as ethnic minorities and those with lower levels of education and income, through inclusive processes of co-design. A second result highlights the effect of unemployment, even beyond the loss of associated income.

Any policy that influences the employment status of people should. Independently of supplementary income support. Therefore, also be evaluated for its effect on integral well-being. Beyond these general indications. The research then highlights five groups of high-impact activities in promoting well-being. Five areas to which specific public policies can be associated. The first area is that of social relations. Which considers the quantity and quality of our networks of relationships. The technology that produces the so-called “relational goods”. The second area refers to the quality of the natural environment around us and to the possibilities that our lifestyle. The morphology of our cities or the climatic characteristics.

Gives us (or takes away) us to interact with it. The third concerns all activities that have to do with process, formal or informal, of continuous learning. The acceleration of change has exacerbated the speed of obsolescence of our knowledge.

The last area of activity that is considered has to do with “giving”

With all those activities, that is, through which we take care. Directly or indirectly, regularly or even occasionally, of others. This category includes all the activities of voluntary service, care, active citizenship. Social commitment that contribute to producing positive externalities and preserving. All those common goods that have a very strong impact, and increasingly will have it, on the quality of life of all of us. This “I care”, the “I care” as Don Lorenzo Milani called it, is also economically a “super-efficient” activity. It makes you happy, as the data show us, both those who give and those who receive. That is, it satisfies the need to obtain material goods and care, but more often. Attention and dignity and, at the same time, the need to be useful to others, to take care, to find meaning.

Modern and far-sighted policies cannot fail to look. With the utmost attention to these paths of integral development. Where the material, relational and environmental dimensions interact with each other to create the conditions for a satisfying and meaningful life. More visit here best econstuition Thanks.

Of course it is Not a Process That Can Only Depend on the Public Hand

On the contrary, interventions from above should be based on the lightness of subsidiarity. But certainly the public hand can contribute to the creation of the preconditions. So that these paths of integral development of famous paradoxes. Can travel individually, collectively and jointly, by the greatest possible number of people. A worthy and challenging project for Europe in the coming decades. Perhaps less obsessed with the issues of the budget and monetary policies. And more focused on those of the integral well-being of its citizens. Certainly a project to relaunch and rediscover its role as a “pact between nations”. And not only as a strategic alliance between states, could effectively counteract. The disintegrating forces and the aims of external control. At the same time give the European spirit new life and popular legitimacy.