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Behavioral Economics For Dummies® by Morris Altman, PhD

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Chapter 17

The Art and Science of Happiness: Can You Be Happy without More Money?

In This Chapter

arrow Looking at what conventional economics has to say about happiness

arrow Considering the behavioral economics approach to happiness

arrow Exploring the relationship between public policy and happiness

Conventional economics looks upon the level of wealth or income as a pretty good proxy for the level of happiness in a society. Increase income, and you can assume that you’re increasing just about everyone’s level of happiness. Behavioral economics, on the other hand, suggests that such a simplistic relationship between income and happiness doesn’t hold, especially in relatively wealthier economies. In the short run, increasing income generates more happiness, but in the longer term the level of happiness reverts to prior levels. This is referred to as the hedonic treadmill — people adapt to higher level of income or material well-being.

In this chapter, I discuss the relationship between happiness and income and the multifaceted determinants of happiness, such as stable marriages, stable employment, and good health. Money isn’t everything, but it remains one important determinant of happiness. What ...

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