The usefulness of a Happy Income Index

Aloys Prinz and Björn Bünger

No 15, CAWM Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)

Abstract: In this paper, Happy Income is introduced as an indicator of physical and socio-psychic wellbeing. It is constructed on the assumption that socio-economic well-being is based on objective circumstances, such as personal income as well as on a subjective evaluation of life. In combining these factors, Happy Income is a cardinal measure of overall well-being in a given country. Therefore, Happy Income is not subject to the limitations of purely ordinally scaled indicators, i.e. it is not restricted by an upper bound, which may be one explanation of the Easterlin paradox. The Happy Income concept is employed to measure social well-being in various different European countries. The results are compared to these countries' score on Ruut Veenhoven's Happy Life Years. It is argued that Happy Income is a valuable complement to other indicators of well-being at an aggregated level.

Keywords: Happiness research; Happy Income; Happy Life Years; Subjective Well-being (search for similar items in EconPapers)
JEL-codes: I10 I31 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-hap and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:15

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