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“...direct voter participation via initiatives and referendums which systematically raise life satisfaction.”
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There is an increasing interest in the measurement of human
well-being, above and beyond the purely material aspects of
life. This paper presents the first general survey in the area
specifically devoted to economic and institutional determinants
of happiness.
Does
it describe a new discovery, methodology, or synthesis of
knowledge?
Yes, it is shown that utility is measurable in a satisfactory
way. Most economists up to now thought this to be impossible; in
their training they were always told otherwise. The paper
discusses various methods to measure happiness, and shows how it
relates to theoretical concepts of utility.
Could
you summarize the significance of your paper in layman's terms?
Material aspects and, in particular, money, do raise
happiness—but only up to a certain level of income. When
people do get to be better off, higher income scarcely raises
happiness, and then only for a limited period of time. Other
determinants of happiness more strongly affect it, particularly
the condition of unemployment, which strongly depresses;
whereas, institutional factors, such as political participation
rights and the extent of government decentralization, raises
people’s satisfaction with their lives.
How
did you become involved in this research, and were any problems
encountered along the way?
We were dissatisfied with the sole concentration on material
aspects, and on the monetary issues of life current in standard
economics. We wanted to show to economists that it is now
possible to integrate non-material aspects into economic
analysis in a consistent and serious way.
Are
there any social or political implications for your research?
Our research implies strong consequences for current economic
policy, in particular, on average there is no such thing as
"voluntary unemployment," where people enjoy a good
income and lots of leisure.
In actual fact, work is essential for most people; therefore,
it is important to politically set the conditions for full
employment. Our research also makes suggestions for
institutional design, such as that of direct voter participation
via initiatives and referendums which systematically raise life
satisfaction.
Prof. Dr. Dr. h.c. mult. Bruno S. Frey, FRSE
Institute for Empirical Research in Economics
University of Zurich
Zurich, Switzerland
Dr. Alois Stutzer
Institute for Empirical Research in Economics
University of Zurich
Zurich, Switzerland
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Bruno
S. Frey
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