Bruno S. Frey, “Happiness Policies.” Chapter 13, pages 151-175, in Happiness: A Revolution in Economics, Cambridge: MIT Press, 2008.
• Unemployment harms subjective well-being (SWB), as does inflation; but on a percentage-point-by-percentage-point basis, unemployment is worse. If we could lower the unemployment rate by 5% while raising the inflation rate by 8%, we would increase SWB.
• Marriage is good for SWB, while separation and divorce are bad for it. Mobility destroys friendships and happiness. Procedural aspects, not only consequences, are important for SWB – people like fair procedures, or the opportunity to be heard.
• Gross National Happiness looks at non-material aspects of well-being, and captures outcomes, not inputs. A National Happiness Index would weight everyone the same, whereas GDP essentially counts individuals proportionally to the value of their market activity. Much of GDP is based on inputs, too. The World Bank’s Human Development Index draws upon a capabilities approach to human flourishing.
• It would be hard to turn SWB into a policy imperative in a reasonable way. Some forms of SWB are sustainable, others are liable to adaptation. SWM measures can be (and would be) manipulated if they were to be utilized in a deterministic fashion for policy purposes. It is probably best to use SWB to inform policymaking, but not to treat it as dispositive.
• We could try to tax to correct for positional externalities, but the usual problems of tax evasion and avoidance would be severe. Do we want to shift status competition into the man-on-horseback variety? Society functions better when status differentials are accepted, and if they are not so acceptable, when they are cloaked.
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