Happiness and Economics

There is a growing literature in the area of Happiness and Economics - see here, here, here.  For the most part studies in this area rely on survey data where respondents answer questions about their well-being.  What does Austrian economics have to say about this?  Pete (Boettke) and I have been invited to contribute a chapter discussing Austrian insights on happiness and economics research to a forthcoming book.

A few of the points we are emphasizing:

1. Subjectivity of the concept of well-being - one man's garbage is another man's treasure.  This cannot be captured in a survey response.

2. Elasticity of the concept of well-being across time - what it means to be happy in 1950 is different than what it means to be happy in 2005. 

3. Happiness is a poor policy guide - The emphasis of policy should not be on creating happiness per se instead on fostering an environment conducive to growth.  Why?  Of course we don't eat growth rates, we want growth because it generates other things - longer life expectancy, fewer diseases, better education, more leisure, etc.  As Mises writes in Human Action:

"He who disdains the fall in infant mortality and the gradual disappearance of famines and plagues may cast the first stone upon the materialism of economists" (p. 193)

Our paper is currently a work in progress and we hope to have a working draft available soon.  If you are unfamiliar with this area of research and wish to get caught up, I suggest the Frey and Stutzer JEL paper (the first link above) or their book on the topic.  In my opinion they do the best job of those writing in this area to recognize the public choice issues associated with the policy implications of their research.

Also see Tyler Cowen, here, for discussion and relevant links.