Introductory description

This is an elective module available for WBS and non-WBS students.
This module aims to provide an overview of the main theories and empirical studies of well-being (or happiness) economics, including its practical implications in the workplace, in cost-benefit analysis, and in policy design. Students will learn about the importance of well-being as an economic outcome and as a policy target, as well as ways of measuring well-being and its determinants. Topics include: choice versus subjective experience; different measurements of well-being; well-being and economic growth; the micro- and macro-economic determinants of well-being; job satisfaction and its determinants; how to use well-being in cost-benefit analysis; hedonic adaptation; social comparisons across different domains of life; well-being over the life-course; affective forecasting; well-being as predictors of future behaviours; well-being and public policy. The goal is to broaden students’ understanding of what factors determine individual’s subjective experiences, and to learn how this knowledge can be applied in business and policy settings.

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.

The module aims to provide an overview of the main theories and empirical studies in well-being (or happiness economics). Key topics will include:

1. What is the economics of well-being?
2. Money and happiness
3. The micro- and macro-economics determinants of well-being
4. Social comparison and hedonic adaptation
5. Job satisfaction and its determinants
6. Well-being valuation method
7. Well-being over the life-course
8. Affective forecasting
9. Influences of emotions on decision-making
10. Well-being 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 well-being.
• Understand the importance of well-being as one of the key policy targets, and gain insights into how well-being is measured in the field.
• Understand how well-being 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.
• Critically evaluate existing business and government practices which either support or ignore people's well-being as their principal outcomes.
• Apply critical thinking, creativity, and imagination in coming up with innovative public policies or business strategies that have individual's well-being in mind.

Indicative reading list

Brown, G. D., & Gathergood, J. (2020). Consumption changes, not income changes, predict changes in subjective well-being. Social Psychological and Personality Science, 11(1), 64-73.
Killingsworth, M. A., Kahneman, D., & Mellers, B. (2023). Income and emotional well-being: A conflict resolved. Proceedings of the National Academy of Sciences, 120(10), e2208661120.
Macchia, L., & Oswald, A. J. (2021). Physical pain, gender, and the state of the economy in 146 nations. Social Science & Medicine, 287, 114332.
McGuire, J., Kaiser, C., & Bach-Mortensen, A. M. (2022). A systematic review and meta-analysis of the impact of cash transfers on subjective well-being and mental health in low-and middle-income countries. Nature Human Behaviour, 6(3), 359-370.
Muggleton, N., Parpart, P., Newall, P., Leake, D., Gathergood, J., & Stewart, N. (2021). The association between gambling and financial, social and health outcomes in big financial data. Nature Human Behaviour, 5(3), 319-326.
Muggleton, N., Trendl, A., Walasek, L., Leake, D., Gathergood, J., & Stewart, N. (2022). Workplace inequality is associated with status-signaling expenditure. Proceedings of the National Academy of Sciences, 119(15), e2115196119.
Quispe-Torreblanca, E. G., Brown, G. D., Boyce, C. J., Wood, A. M., & De Neve, J. E. (2021). Inequality and social rank: Income increases buy more life satisfaction in more equal countries. Personality and Social Psychology Bulletin, 47(4), 519-539.
Ugwu, L. E., Idemudia, E. S., & Onyedibe, M. C. C. (2024). Decoding the impact of night/day shiftwork on well-being among healthcare workers. Scientific Reports, 14(1), 10246.
Vine, V., Boyd, R. L., & Pennebaker, J. W. (2020). Natural emotion vocabularies as windows on distress and well-being. Nature Communications, 11(1), 4525.
Waldfogel, H. B., Sheehy-Skeffington, J., Hauser, O. P., Ho, A. K., & Kteily, N. S. (2021). Ideology selectively shapes attention to inequality. Proceedings of the National Academy of Sciences, 118(14), e2023985118.

Subject specific skills

Evaluate and interpret empirical estimates typically reported in the economics of well-being literature.
Understand how to apply theories in the economics of well-being to their own experiences.

Transferable skills

Participate in critical discussions about why people in business and policy makers should care about well-being as an outcome, and offer new and cost-effective solutions to the current practices.