An economists thoughts on happiness

An interesting article on happiness and economics from the New York Times – by Justin Wolfers

Yale_ã_s business school just published an interesting interview with Betsey Stevenson_ã”my favorite economist. And yes, the usual disclosure applies: this is partly because she_ã_s an interesting coauthor and colleague, but also because she_ã_s my partner. She makes an interesting point about the interplay between happiness research and behavioral economics:

For a very long time, we believed the best thing to do was just look at what people do and infer their preferences from their behavior. But we_ã_ve started to learn that there are some domains where that is hard to do_ã_ I think one of the richest potential areas for happiness data is in the area of behavioral economics _ã” in situations where the way people behave may not actually reflect their true, underlying preferences.

But she also warns economists not to get too carried away:

There is a real question of whether happiness is the same thing as utility. Gary Becker has argued quite forcefully that they are not the same thing, that they should not be used interchangeably, that instead we should think of happiness as being one component of utility. I agree with his point that there is probably more to life than even life satisfaction. I know that sounds almost oxymoronic, but perhaps we_ã_re missing a sense of greater purpose or fulfillment.

The interview is interesting throughout, providing a provocative account of the state of knowledge on economics and happiness. Read the full interview, here.