Sen, A. (1996). Rationality, joy and freedom. Critical Review, 10(4), 481-494.

In The Joyless Economy, Tibor Scitovsky proposes a model of human behavior that differs substantially from that of standard economic theory. Scitovsky begins with a basic distinction between “comfort” and “stimulation.” While stimulation is ultimately more satisfying and creative, we frequently fall for the bewitching attractions of comfort, which leads to impoverished lives. Scitovsky’s analysis …

Ng, Y. K. (2003). From preference to happiness: Towards a more complete welfare economics. Social Choice and Welfare, 20(2), 307-350.

Welfare economics is incomplete as it analyzes preference without going on to analyze welfare (or happiness) which is the ultimate objective. Preference and welfare may differ due to imperfect knowledge, imperfect rationality, and/or a concern for the welfare of others (non-affective altruism). Imperfection in knowledge and rationality has a biological basis and the resulting accumulation …

Diener, E., &Seligman, M. E. (2004). Beyond money: Toward an economy of well-being. Psychological science in the public interest, 5(1), 1-31.

Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being—people’s evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and …

Frey, B. S., &Stutzer, A. (2005). Beyond outcomes: measuring procedural utility. Oxford Economic Papers, 57(1), 90-111.

Abstract People not only obtain utility from actual outcomes but also from the conditions which lead to these outcomes. The paper proposes an economic concept of this notion of procedural utility. Preferences beyond outcome can be manifold. We distinguish procedural utility people get from institutions as such, i.e., from how allocative and redistributive decisions are …

Frey, B. S., &Stutzer, A. (2005). Happiness research: State and prospects. Review of social economy, 63(2), 207-228.

This paper intends to provide an evaluation of where the economic research on happiness stands and in which interesting directions it might develop. First, the current state of the research on happiness in economics is briefly discussed. We emphasize the potential of happiness research in testing competing theories of individual behavior. Second, the crucial issue …

Frey, B. S., &Stutzer, A. (2002). What can economists learn from happiness research?. Journal of Economic literature, 40(2), 402-435.

Abstract In recent years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation …

Diener, E., Suh, E. M., Lucas, R. E., &Smith, H. L. (1999). Subjective well-being: Three decades of progress. Psychological bulletin, 125(2), 276.

W. Wilson’s (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of “happiness.” A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB. E. Diener’s (1984) review placed greater emphasis on theories that stressed psychological factors. …

Diener, E., &Biswas-Diener, R. (2002). Will money increase subjective well-being?. Social indicators research, 57(2), 119-169.

Four replicable findings have emerged regarding the relation between income and subjective well-being (SWB): 1. There are large correlations between the wealth of nations and the mean reports of SWB in them, 2. There are mostly small correlations between income and SWB within nations, although these correlations appear to be larger in poor nations, and …

Clark, A. E., &Oswald, A. J. (1996). Satisfaction and comparison income. Journal of public economics, 61(3), 359-381.

This paper attempts to test the hypothesis that utility depends on income relative to a ‘comparison’ or reference level. Using data on 5,000 British workers, it provides two findings. First, workers’ reported satisfaction levels are shown to be inversely related to their comparison wage rates. Second, holding income constant, satisfaction levels are shown to be …