Key points of article…
Despite a big rise in GDP per person, surveyed measures of happiness have been flat to falling in the US and Australia.
Younger people in the US, Canada, Australia and NZ are the least happy age group. This is a major change from 20 years ago and may be due to the rise of social media.
Some suggest we are on an “hedonic treadmill” and should focus on something like Gross National Happiness.
Such an approach would have major implications for investors, but it’s doubtful it would improve happiness.
Introduction
On a recent road trip, I was listening to a bunch of Taylor Swift and Andy Williams’ CDs and what struck me was how different the topics of the songs were. Andy’s covers were far more upbeat (with songs like ‘Happy Heart’ and ‘For All We Know’) whereas Taylor has lots of ‘somebody done me wrong’ songs. Of course, it’s dangerous to generalise but then I saw a study from the University of Innsbruck finding that songs have become “gloomier” and “angrier” compared to 50 years ago - which made me think about what it tells us about the wider concept of happiness.
Pursuing happiness is at the centre of our existence. There’s lots of evidence happiness is good for us – happy people live longer, are healthier, more resilient, more creative, are better leaders and are more sociable. Which is where economics comes in. Despite often being portrayed as the “dismal science”, economics is in fact all about happiness. The economic problem is about how to maximise utility (or happiness) with limited resources. So, economics can be thought of as the “art of happiness”. But measures of happiness have been flat or falling in developed countries. So, what gives? Is economics failing us? This became a big issue in the 2000s with lots of books on happiness. There is now even a regular “World Happiness Report using Gallup surveys attempting to gauge happiness.
Rampant prosperity
The 19th century saw the start of rapid global economic growth.