Gross domestic product, the measurement of national economic output, has entered the vocabulary of laymen, and GDP per capita has come to be identified with material well-being, if not literally with happiness. In this stimulating book, British economist Layard objects to this linkage and urges economists and policymakers to pay more attention to real happiness -- the proper, and historically more common, focus of economists and philosophers. He argues that happiness is not the illusive concept it is sometimes thought to be: through surveys, and increasingly even through brainwaves, we can measure happiness and compare it across individuals quite robustly. Richer people tend to be happier than poor people, and people in poor countries tend to be less happy than people in rich countries. But there is much variation across countries, and big increases in wealth within already rich countries have not increased happiness over the past four decades. Not surprisingly, income is only one factor -- and usually not the most important one. Family, friendships, health, stability, personal freedom, and trust in others all play a role. Layard would like policy (and individuals' choices) to return to utilitarian guidance -- maximizing the happiness of the greatest number -- and he prescribes many policies from this orientation. He favors, for example, mildly redistributive policies both within and across nations (since gains in happiness are demonstrably greater among poor people than losses are among rich people), focusing on economic stability over growth in rich countries, and income taxation as a device for encouraging greater leisure, which gets shortchanged when happiness depends in part on one's relative income.
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