Happiness and Economics

(CIAS001NABB)

Gábor Kovács
Corvinus Institute for Advanced Studies
Business Ethics Center

gabor.kovacs4@uni-corvinus.hu
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 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
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
12. Students’ presentations
13. Students’ presentations
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 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
week 11-13
Writing a paper and presenting a case of a selected business or social enterprise which promotes
Project work 46 wellbeing in groups of three. Paper requirements (1200-1500 words) are provided in a separate file. Paper 28
submission by
Late submission of the project work will result 25% deduction of this part of the grade element.
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
Individual pre-selected topic on the field of happiness research. submission by
40 24
paper the end of the
Late submission of the individual paper will result 25% deduction of this parts of the grade study period
element.

Total 100 60

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 Western and Eastern Concepts of Happiness

What is happiness?
 Wellbeing
 Flourishing
 Thriving

Different dimensions of wellbeing:

 Individual
 Social
 Ecological
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 Western and Eastern Concepts of Happiness

Western and Eastern concepts of happiness

Human flourishing
(eudaimonia) versus
liberation from suffering

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 Homework 1.

Unfortunately or fortunately, the elusive pursuit of happiness has been always our ultimate
quest. Delving into this timeless enigma creates an intriguing tapestry of human emotions,
experiences and spectrums of perceptions. As a student from science faculty, I can talk about
the chemical perspective of happiness. Which involves the inter performance of various
neurotransmitters and hormones in the brain and body. Logically dopamine, serotonin,
endorphin, oxytocin and endocannabinoid are the chemicals responsible for happiness. As a
student of applied economics, I can talk about the capitalistic definition of happiness. Which is
often equated with wealth, power and fame. However human behavior gamut makes it
impossible to generalize the concept of happiness. From a personal point of view sense of
contentment is happiness. Starting from an extra hour of sleep in the morning, a sneaky
spoon of sugar in my coffee, sunshine, a good meal, meeting friends, an afternoon walk and
so many more things to mention. Even thinking about growing my own onions and tomatoes,
living in a cottage, dream job, world tour, buying my own ford raptor, being a dog mom gives
me that dopamine rush. In a nutshell, anything stress-free, progressive, peaceful and calm will
sit perfectly in my equation of happiness. 6
 Homework 1.

Happiness to me means a constant combination of comfortability, security, and time.

Let’s say I’m sitting by a creek on a nice sunny summer evening, food in my belly
clothes on my back, I am at peace and I am happy. If you take time out of the
equation, I wouldn’t have time to be there and enjoy the moment I would not be
happy. Security, if I was by the creek and I did not feel safe I would not be able to
enjoy the moment and feel happiness. Same with comfortability if I was cold, hungry,
or sick. Honestly the more I write about happiness the more my perspective changes
maybe happiness is just perspective, maybe happiness is being able to enjoy the
moment, and on the other hand loved ones and animals can also bring you
happiness. The more I think about I keep coming to the same conclusion happiness
to me is knowledge and money (a lot), because money combined with knowledge can
buy you happiness. There is on the other hand one thing money can not buy, and that
is health. So maybe at the end of the day happiness to me is health.
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 Economics of Happiness

Basic questions

Does money make you happy?

Does greater happiness go with higher income?

Will raising incomes of all increase the happiness of all?

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 Economics of Happiness

GDP

What is the formula of GDP?

What is nominal GDP?
What is per capita GDP?

What is GDP used for?

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 Economics of Happiness

The misuse of GDP…

Joseph E. Stiglitz:
…as a measure of public wellbeing results
from the idea that economic growth is always
synonymous with enhanced quality of life
(2010).

GDP fetishism
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 Economics of Happiness

Mismeasuring Our Lives

GDP measures only partial economic activities

 ignores economic inequality
 does not integrate environmental services into
economic decisions
 ignores components that do not involve monetary
transactions
 counts every expenditure as positive
 ignores different visions of development
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 Economics of Happiness

Homework 2.

Illustrate the change of your home country's GDP in the last

7040 years.
Search for data, which best describes the change of your home country's GDP
in the last 70 years and upload a file, which illustrates the trend of GDP
change. Upload a file that will most effectively show the trend and the most
important data.
(You can upload only one file, and the maximum size of the file is 5 MB.)

On Moodle: 02/20/2024 7PM – 02/25/2024 7PM (SUNDAY) 12

Economics of Happiness

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Economics of Happiness

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Economics of Happiness

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 Economics of Happiness

Homework 2.

Conclusions?

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 Economics of Happiness

Easterlin paradox (1974)

Richard Easterlin:
At a point in time both among and within
nations, happiness varies directly with
income, but…
over time (10+ years), happiness does
not increase when a country’s income
increases.
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 Economics of Happiness

Reasons behind I.: Social comparison

Leon Festinger:

The grass is (always) greener (on the other

side)

The importance of comparison groups

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 Economics of Happiness

Reasons behind I.: Social comparison

Amos Tversky & Daniel Kahneman:

How a person feels about a given

amount of personal income depends
on how that income compares with
others’ incomes.

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 Economics of Happiness

Reasons behind II.: Hedonic adaptation

Edward Diener:

People get used (adapt) to having more

income (and higher living standards)

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 Economics of Happiness

Loss aversion

Amos Tversky & Daniel Kahneman:

If income decreases than the

reference point shifts to one’s pre-
recession income
Loss aversion: losses are
experienced more strongly than
equivalent gains

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 Economics of Happiness

Easterlin & O’Connor (2021, p. 17)

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 Economics of Happiness

Easterlin Paradox (1974)

Richard Easterlin:

Money does not make you happy

beyond 20.000 USD per year
(early 2000s)

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 Economics of Happiness

Materialistic value orientation

Tim Kasser:
Materialistic value-orientation undermines
well-being

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 Economics of Happiness

Conclusion

„The fact that GDP growth does not lastingly increase happiness
does not mean we should drop GDP. But it clearly illustrates that
GDP does not represent a broad measure of well-being, implying
policy makers should focus their attention elsewhere” (Easterlin &
O’Connor 2021).

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 Economics of Happiness

Instead of homework

Corvinus MyVoice in the MyCorvinus APP

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Thank you
for your attention!

gabor.kovacs4@uni-corvinus.hu
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