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An Economist's Thoughts on Happiness

Yale’s business school just published an interesting interview with Betsey Stevenson-my favorite economist. And yes, the usual disclosure applies: this is partly because she’s an interesting coauthor and colleague, but also because she’s my partner. She makes an interesting point about the interplay between happiness research and behavioral economics:

For a very long time, we believed the best thing to do was just look at what people do and infer their preferences from their behavior. But we’ve started to learn that there are some domains where that is hard to do… I think one of the richest potential areas for happiness data is in the area of behavioral economics – in situations where the way people behave may not actually reflect their true, underlying preferences.

But she also warns economists not to get too carried away:

There is a real question of whether happiness is the same thing as utility. Gary Becker has argued quite forcefully that they are not the same thing, that they should not be used interchangeably, that instead we should think of happiness as being one component of utility. I agree with his point that there is probably more to life than even life satisfaction. I know that sounds almost oxymoronic, but perhaps we’re missing a sense of greater purpose or fulfillment.

The interview is interesting throughout, providing a provocative account of the state of knowledge on economics and happiness. Read the full interview, here.