The visible hand in economics

In the long-run is happiness constant?

Posted on: November 9, 2007

I was just reading the dirty old (note dirty old is a complement from me) Dilbert blog, when I happened upon a post he called Happiness smoothing. Now in this blog post he discusses how individuals choose to interact with people in a way that is inversely related to the persons current success. So if you see a successful person you rip them down, if you see a downtrodden person you help them out (all other things equal). This is similar to tall poppy syndrome and empathy all rolled into one.

Although this is an interesting topic, I’m going to talk about something else. In his post Scott Adams says “First, I should point out that researchers have discovered that people’s happiness has a “set point” that doesn’t change much no matter the external circumstances”. What happens if we accept this statement and use it in order to create policy?

Well if this is the case there is nothing we can do to influence someones ‘long-run’ value of happiness. This seems perverse, however, by realising that happiness is a flow and not a stock, this does not have significant implications on the mechanical effectiveness of government policy, as policy still changes people choices (as choices are a short-run phenomena, based on short-run definitions of happiness).

However, it does raise the question of the purpose of government. If people are equally satisfied in a stable non-government and a stable government state, then what does a government offer people other than the transitory benefits of changing state?

In another sense, I think this implies the following “it does not matter what the real GDP/GNH of the world is, what matters is its rate of growth”.

Ultimately, I think that there are factors that increase the lifelong flow of satisfaction, in a similar way that hysteresis implies that movements in the business cycle can have real economic impacts (eg by changing the natural rate of unemployment). However, this does raise the question, if our goal is to increase happiness, how do we do it?

4 Responses to "In the long-run is happiness constant?"

very quickly: I’m pretty sure that set point theory (for happiness) is entirely contestable.

Interesting. I haven’t actually seen any literature on it. If you happen to know where I could find any numerical studies it would be much appreciated.

hhhmmm…I it was a brookings paper i read on it – maybe have a search over there. richard layard’s book ‘happiness’ is an interesting read too. If I remember exactly what I read which made me think that set point theory was contestable i’ll let you know



[…] Frog interprets this policy implication a little differently to me (and both are different to this previous post) – lets […]

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