Nowadays, economics of happiness is a very popular field of economics. This field, according to Stutzer & Frey, uses empirical research to measure the individuals´ well-being. And this measurement tries to capture different aspects of individuals well-being and different concepts of individual welfare. Besides, it identifies income, health, employment and social capital like the most important determinants of happiness (2012). As a result, it is expected that a country with a good healthcare system, access to high quality education, increasing wealth and income should have a higher level of happiness compare to another country in a worse situation.
For example, according to the graph “Dissatisfaction with standards of living vs GDP per capita” (with data of 2011) from Our World in Data, countries with the lower level of GDP per capita, like Haiti or South Sudan, had the higher level of dissatisfaction at the same time. Rising a question, is this information useful to propose a policy or is it only useful as an illustrative tool. There is not a straight answer to that, but it is clear that high levels of happiness are not common among the poorest countries. And it seems that higher levels of subjective well-being only appear among the developed countries. Rising a new question, does it really matter happiness when your main goal is to develop a country?
There are many different questions that economic of happiness tries to answer like: the relationship between the income growth and the subjective well-being development (Easterlin Paradox), or the influence of the different determinants of happiness among the population. But in all these studies it is hard to identify what is the influence of happiness in the development process of a country. Superficially, happiness looks to come after the development process, because it is hard for the poor people to increase their level of subjective well-being if they are not able to cover their basic necessities. It could be said that happiness is a luxury good for the people living in extreme poverty conditions.
Therefore, must the government really care about the level of happiness of its country if its population is fighting against starvation? Is it even rational to invest time thinking about happiness when a country has high rates of illiteracy? Can a poor person really think about his/her own happiness when he or she lives with less than a dollar per day? I am not saying that poor people are not able to identify or to feel happiness as consequence of their circumstances, but I assume it is hard for them to increase their level of happiness when they have inhuman conditions as starting point.
The main argument of my essay is that happiness is irrelevant when you are a developing country trying to overcome poverty. Happiness becomes a main topic when a country achieves certain level of development, where all the individuals have their basic necessities cover. Since, only with a minimum level of development individuals are able to ask themselves about what really make them happy or what means happiness to them.
- Clark, Andrew and Frijters, Paul and Shields, Michael A., Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles (June 2007). IZA Discussion Paper No. 2840. Available at SSRN: https://ssrn.com/abstract=998225
- Clark, Andrew and Senik, Claudia, Will GDP Growth Increase Happiness in Developing Countries?. IZA Discussion Paper No. 5595. Available at SSRN: https://ssrn.com/abstract=1796590
- Easterlin, Richard A. (ed.) (2002). Happiness in Economics. Cheltenham: Edward Elgar.
- Frederick, S., and G. Loewenstein (1999): “Hedonic adaptation” in D. Kahneman, E. Diener and N. Schwarz (eds.), Hedonic Psychology: Scientific Approaches to Enjoyment, Suffering, and Well-being, New York: Russell Sage Foundation.
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