The Economy of Wellbeing – A study on the Economy of Happiness

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The Economy of Wellbeing – A study on the Economy of Happiness
Introduction
Every individual wants to be happy. Economic activity, namely the production of services and goods, is without a doubt not an end in itself in the sense that it has value only to the extent that it contributes towards human happiness. However, surprisingly, economist tended to think of happiness as principally the domain of therapists and psychologists, spiritual leaders, motivational speakers, and self-help authors (White 10). It does not cause surprise to know that philosophers and psychologists have written at length about happiness, but economists are the least likely people to study happiness or emphasize its significance to policymaking. The advent of the so-called “New Welfare Economics” changed this situation considerably. During the 1930s, some scholars, including John R. Hicks, proved that human behavior, especially the demand for services and goods, might be explained in terms of ordinal (relative) utility. In other words, cardinal (absolute) measurement of utility is not necessary for analyzing how people respond to relative prices changes. Today, however, economists are at the front line of contemporary happiness studies, given incentive by their traditional focus on well-being and welfare, as well as their exploration of better approaches to understanding it, measuring it, and using it in the implementation of policy.
Why Economists should Study…