Happiness Quantified: A Satisfaction Calculus Approach

Happiness Quantified: A Satisfaction Calculus Approach

Happiness Quantified: A Satisfaction Calculus Approach

Happiness Quantified: A Satisfaction Calculus Approach


How do we measure happiness? Focusing on subjective measures as a proxy for welfare and well-being, this book finds ways to do that. Subjective measures have been used by psychologists, sociologists, political scientists, and, more recently, economists to answer a variety of scientifically andpolitically relevant questions. Van Praag, a pioneer in this field since 1971, and Ferrer-i-Carbonell present in this book a generally applicable methodology for the analysis of subjective satisfaction. Drawing on a range of surveys on people's satisfaction with their jobs, income, housing,marriages, and government policy, among other areas of life, this book shows how satisfaction with life "as a whole" is an aggregate of these domain satisfactions. Using German, British, Dutch, and Russian data, the authors cover a wide range of topics, even some not usually considered part ofeconomic study. The book makes a distinction between actual satisfaction levels and individual norms, and in this way complements Van Praag's earlier work within the Leyden School with his later work in "happiness research". Among the many topics covered, the authors discuss: individuals' memory and anticipationprocesses and the estimation of adaptation phenomena (how individuals adapt to changing circumstances); the effect of reference groups on income norms and satisfaction with income; the importance of climate for well-being, including the development of a climate-equivalence index; the trade-offsbetween chronic diseases and income when well-being is kept constant; the damage of aircraft noise on well-being; the construction of a new talent tax tariff; and inequality from a satisfaction perspective, including the definition of "satisfaction inequalities", a natural extension of incomeinequality and poverty. This groundbreaking book presents new and fruitful methodology that consitutes a welcome addition to the social sciences.


One of the most interesting subjects for a scientific researcher is people themselves. As the researcher is also human, he or she is in fact investigating him- or herself. If we use introspection we are able to formulate hypotheses and we can easily predict, because we have much in common with our object of research. However, it would be wrong to assume that all human beings are equal and that it is sufficient for our research to study ourselves only. We have to extend our studies by observing other individuals as well, by means of interviews, surveys, monitoring, experiments, or observation of (market) behavior.

Humankind is the subject of the social sciences; namely, psychology, sociology, economics, anthropology, and political sciences. Probably, the historical separation between these sciences is somewhat artificial and unfortunate. It is artificial because it is hard to argue that economics has nothing to do with sociology or psychology, or the other way round. And it is unfortunate because those artificial scientific boundaries make it difficult to make a complete study of phenomena that have economic, sociological, and psychological aspects. Evidently, this point is implicitly recognized by the creation of hybrid disciplines like 'economic psychology', 'social psychology', or 'economic anthropology', to name but a few. But these are still scientific backwaters, beyond the mainstream.

The subject of this book is satisfaction analysis. Humans evaluate many aspects of their situation. This amounts to posing the question: Am I satisfied with my job, my health, my family, the way I use my leisure time, my choice of car, my choice of breakfast jam, etc.? The obvious reason for this almost continuous monitoring of our own life is that we are always looking for the best situation. If we are dissatisfied with something, we attempt to make such changes as are possible to our conditions.

This continuous evaluation of how satisfied we are with aspects of our life has the clear objective of changing our life if we can improve our satisfaction. This change can materialize in changing one's habits, changing one's job, changing one's family situation, buying new furniture, etc. Obviously, there are situations in which we are dissatisfied but are unable to change our situation. In those cases it is very frustrating to repeat the evaluation process over and

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