World Happiness Report and Alternative Development Indicators

Happiness and Economics
(CIAS001NABB)
Gábor Kovács
Corvinus Institute for Advanced Studies
Business Ethics Center
gabor.kovacs4@uni-corvinus.hu
1
Weekly breakdown
Tuesdays 5:20-6:50 PM (E3004)
1. Introduction to the course, and to the conception of happiness

2. Western and Eastern Concepts of Happiness
3. Economics of Happiness
4. Wellbeing Organizations
5. Positive Psychology, Measuring Happiness and the Happiness Map of Hungary
6. World Happiness Report and the Happy Planet Index alternative development indicators
SPRING BREAK
7. Bhutan’s Gross National Happiness
8. Costa Rica (Pura Vida), New Zealand (Wellbeing Budget), and Amsterdam (doughnut economics)
9. Nature as a Source of Happiness and Spiritual Value Orientation
10. Women Leadership
11. Students’ presentations
2
Assignments and evaluation
Learning passing %
% Details Deadline / date
activities (60 % each)
Students have to submit several homework during the semester. specific for each
Homework 14 8
Late submissions of a homework results in 0 points considering the given homework. homework
Presentations at
Writing a paper and presenting a case of a selected business or social enterprise which promotes week 11-13
Project work 46 wellbeing in groups of three. Paper requirements (1200-1500 words) are provided in a separate file. 28
Paper submission
Late submission of the project work will result 25% deduction of this part of the grade element. by the end of the
study period
Based on the course’s topics presented during classes, students should write an individual scientific
review paper (800-1000 words) during the semester reviewing at least three scientific journal articles in a Paper submission
Individual pre-selected topic on the field of happiness research.
40 by the end of the 24
paper
Late submission of the individual paper will result 25% deduction of this parts of the grade study period
element.
Total 100 60
3
Western and Eastern Concepts of Happiness
Western and Eastern concepts of happiness
Human flourishing
(eudaimonia) versus
liberation from suffering
Happiness
Wellbeing
Flourishing
4
Economics of Happiness
Basic questions related to GDP and wellbeing

Does money make you happy?
✓ Money does not make you happy beyond 20.000 USD per year (early
2000s)
Does greater happiness go with higher income?
✓ At a point in time both among and within nations, happiness varies directly
with income
Will raising incomes of all increase the happiness of all?
✓ Over time (10+ years), happiness does not increase when a country’s
income increases 5
Wellbeing Organizations
Socio-ecological wellbeing as an organizing principle
New type of business and social organizations
Sized within planetary biophysical boundaries (with ecological

regeneration) to meet human needs (social wellbeing)
Maximization of stakeholders’ wellbeing (happy employees create

real value)
6
Positive Psychology
Positive psychology
Positive psychology to improve quality of life (what factors makes life worth
living)
Flow: an optimal (healing) experience
Three components of happiness (by which happiness is measured)

✓ Satisfaction (virtues for gratification) – good life
✓ Positive emotions (pleasure) – pleasant life
✓ Meaning (having life goal) – meaningful life
7
Measuring Happiness
Measuring subjective wellbeing (SWB)
Overall, how satisfied are you with life as a whole these days? [0-
10]
The following questions ask about how you felt yesterday.
How about happy? [0-10]
How about worried? [0-10]
How about depressed? [0-10]
Overall, to what extent do you feel the things you do in your life are
worthwhile? [0-10] 8
World Happiness Report
Published since 2012

Special annual focuses
John F. Helliwell
Richard Layard
Jeffrey D. Sachs
9
Happiness and economics
10
11
Individual paper
Individual scientific review paper (800-1000 words): reviewing at least three
scientific journal articles
Topic from the field of happiness research – why did you choose it
Include your own conclusions
Choosing a topic: by 07/04/2024 22:00
Deadline: 05/26/2024 22:00 (Late submission – deduction)

12
2012
Happiness is a subjective experience but can be objectively

measured
Asking people whether they are satisfied with their lives offers
important information about society
13
2012
External factors as key determinants of happiness:
✓ income
✓ work (unemployment, retirement)
✓ community and governance (social capital, freedom, equality)
✓ values and religion (religious vs. material people)
✓ environment
14
2012
Personal factors as key determinants include:

✓ mental health
✓ physical health
✓ family experience (marriage, children)
✓ education
✓ gender and age
✓ biology
15
2013
Mental health is the most important determinant of happiness
About 10% of the world’s population suffers from depression or

anxiety (biggest cause of disability and absenteeism)
Cost-effective treatments exist (recovery rates of 50% – the

treatments have zero net cost after the savings they generate)
16
2013
Objective individual benefits of subjective well-being:
✓ health (longevity)
✓ productivity (and income)
✓ social connectedness (pro-sociality)
17
2013
Countries use well-being data to improve policy making
Main policy areas:

✓ healthcare
✓ transportation
✓ education
A wellbeing approach leads to better policies

18
2015
19
2015
20
2015
21
2017
Social foundations of happiness
✓ Social support: have someone to count on in crisis situations

✓ Sense of freedom: the ability to make life-choices
✓ Generosity: donating time or money
✓ Social trust
✓ Good governance: democratic aspects of government quality
22
2017
In Western societies:
✓ Mental health more important than income or physical health

✓ Having a partner is also a crucial factor
✓ Income is more important than education
Relative income matters – similar to education
23
2017 – Happiness at work
Employed people are happier

than unemployed
Blue-collar work is correlated

with less happiness
24
2017 – Happiness at work
Well-paying jobs are conducive to happiness
The most important job factors

✓ work-life balance
✓ autonomy
✓ variety
✓ job security
✓ social capital
✓ health and safety risks 25
2019 – Governance and happiness

Government and happiness:
✓ What governments do affects happiness
✓ Happier people engage in politics and vote (for incumbent parties –
enlightened self-interest)
Prosocial behavior (altruism):

✓ Volunteering: helping others with no expectation of compensation
✓ Donation: spending money on others
✓ Helping strangers
Behaving generously can increase happiness for both parties
When people’s happiness increases, they become more altruistic 27
2020
Inequality of happiness results unhappiness
✓ Reducing inequality of happiness raise happiness for all – people care
about others
The secret of Nordic countries

✓ State institutions are high quality, non-corrupt, deliver their promise, and
generous – serving citizens and create trust
✓ Life satisfaction is higher (0.96 points) in a high trust environment than in a
low trust environment
✓ A trustworthy government is crucial for a happy society
28
World Happiness Report and alternative development indicators
Homework 5-6.
Read the uploaded PDF (at Moodle – Week 6: Kingdom of

Bhutan.pdf) and prepare for a short quiz about Bhutan (at the
beginning of next class).
33
What is the importance of March 20 (for this course)?
34
Alternative development indicators
35
World Happiness Report and alternative development indicators
Before the spring break
✓ Groups
✓ Presentation topic
✓ Presentation week
36
Thank you
for your attention!
gabor.kovacs4@uni-corvinus.hu
37

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Happiness and Economics

Tuesdays 5:20-6:50 PM (E3004)

1. Introduction to the course, and to the conception of happiness

Western and Eastern concepts of happiness

Basic questions related to GDP and wellbeing

Socio-ecological wellbeing as an organizing principle

New type of business and social organizations

Sized within planetary biophysical boundaries (with ecological

Maximization of stakeholders’ wellbeing (happy employees create

Flow: an optimal (healing) experience

Three components of happiness (by which happiness is measured)

Measuring subjective wellbeing (SWB)

World Happiness Report

Published since 2012

Include your own conclusions

Choosing a topic: by 07/04/2024 22:00

Deadline: 05/26/2024 22:00 (Late submission – deduction)

Happiness is a subjective experience but can be objectively

External factors as key determinants of happiness:

Personal factors as key determinants include:

Mental health is the most important determinant of happiness

About 10% of the world’s population suffers from depression or

Cost-effective treatments exist (recovery rates of 50% – the

Objective individual benefits of subjective well-being:

Countries use well-being data to improve policy making

Main policy areas:

A wellbeing approach leads to better policies

Social foundations of happiness

✓ Social support: have someone to count on in crisis situations

✓ Mental health more important than income or physical health

Relative income matters – similar to education

2017 – Happiness at work

Employed people are happier

Blue-collar work is correlated

2017 – Happiness at work

Well-paying jobs are conducive to happiness

The most important job factors

2019 – Governance and happiness

Prosocial behavior (altruism):

The secret of Nordic countries

Read the uploaded PDF (at Moodle – Week 6: Kingdom of

Before the spring break

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