Economics of Happiness
August 17, 2000
While incomes, material possessions and living standards have all been on the rise in the United States, happiness has been declining in recent years. A General Social Survey of the United States shows that in the early 1970s 34 percent of those interviewed described themselves as "very happy." Yet by the late 1990s, the figure had shrunk to 30 percent. A recent study analyzed social and economic trends and found that this trend is not true across the board. Some groups are happier than others.
The study found:
- The happiness of American men has grown over the past three decades, while American women's happiness has decreased, despite improved economic and social relations.
- Blacks are generally less happy than whites, but the gap between the two is closing as whites' happiness is decreasing while blacks' happiness is increasing.
- Higher income increases happiness.
It also calculated the economic worth of some unhappy events:
- The lack of a separation or divorce, the single greatest depressant, were calculated to be worth $100,000 a year.
- The lack of unemployment was calculated to be worth $60,000 a year.
The study found that happiness is U shaped over the life cycle and seems to bottom out at age 40. This suggests that this latest low happiness rating may be related to the disproportionate number of Baby Boomers who are now near the bottom of the happiness curve.
Source: David G. Blanchflower and Andrew J. Oswald, "Well-Being Over Time In Britain and the USA," Working Paper 7487, January 2000, National Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, Mass. 02138.
For NBER text:http://www.nber.org/digest/aug00/w7487.html
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