Introductory description

This module aims to provide an overview of the main theories and empirical studies of wellbeing (or happiness) economics, including its practical implications in the workplace, in cost-benefit analysis, and in policy design.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

Topics include: different measurements of wellbeing; wellbeing and economic growth; the determinants of wellbeing; job satisfaction and its determinants; how to use wellbeing in cost-benefit analysis; hedonic adaptation and resilience; social comparisons across different domains of life; wellbeing over the life-course; affective forecasting; wellbeing as predictors of future behaviours; wellbeing and public policy.

Learning outcomes

By the end of the module, students should be able to:

• Articulate and apply the key concepts in the economics of wellbeing.
• Understand the importance of wellbeing as one of the key policy targets, how it has been developed, and gain insights into how wellbeing is measured in the field.
• Understand how wellbeing is typically measured, how happiness is relative and adaptable, how people are typically very bad at predicting their emotional reactions in the future, and how to apply these empirical findings in practically relevant business and government contexts.
• Demonstrate knowledge and understanding of the management and development of people within organisations through a wellbeing lens.
• Apply critical thinking, creativity, imagination and decision-making skills in coming up with innovative public policies or business strategies that have individual's wellbeing in mind.
• Critically evaluate existing business and government practices which either support or ignore people's wellbeing as their principal outcomes.
• Participate in critical discussions about why people in business and policy makers should care about wellbeing as an outcome, and offer new and cost-effective solutions to the current practices.

Indicative reading list

The primary readings for the module include:

1. Clark, A, Frijters, P. Shields, M. (2007) Relative income, happiness and utility: an explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 4695-144.
2. Di Tella, R. and MacCulloch, R., 2006. Some uses of happiness data in economics. The Journal of Economic Perspectives, 20(1), pp.25-46.
3. Frey, B.S., and Stutzer, A. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40, 402-435.
4. Kahneman, D. Krueger, A. Schkade, D. Schwarz, N. Stone, A. (2004) Toward national well-being accounts. American Economic Review, 94(2), 429-434.
5. Layard, R., Clark, A.E., Cornaglia, F., Powdthavee, N. and Vernoit, J., 2014. What predicts a successful life? A lifecourse model of wellbeing. The Economic Journal, 124(580), pp.F720-F738.
6. Oswald, A.J. and Powdthavee, N., 2008. Does happiness adapt? A longitudinal study of disability with implications for economists and judges. Journal of public economics, 92(5), pp.1061-1077.
7. Powdthavee, N., 2008. Putting a price tag on friends, relatives, and neighbours: Using surveys of life satisfaction to value social relationships. The Journal of Socio-Economics, 37(4), pp.1459-1480.
8. Powdthavee, N., 2010. The happiness equation: The surprising economics of our most valuable asset. Icon Books Ltd.
9. Powdthavee, N. and Van den Berg, B., 2011. Putting different price tags on the same health condition: Re-evaluating the well¬being valuation approach. Journal of health economics, 30(5), pp.1032-1043.
10. Wilson, T. Gilbert, D. (2003) Affective forecasting. Advances in Experimental Social Psychology, 35, p345-411.
11. Thaler, R. and Sunstein, C. (2003) Libertarian paternalism, American Economic Review, 93, 2, 175-179.

Subject specific skills

Evaluate and interpret empirical estimates typically reported in the economics of wellbeing literature, scanning and organising the data, synthesising and analysing to extract meaning.
Understand how to apply theories in the economics of wellbeing to their own experiences.

Transferable skills

Written communication skills.
Demonstrate high personal effectiveness.
Demonstrate leadership and performance management skills.