Perspectives from the Happiness Literature and the Role of New Instruments for Policy Analysis

Perspectives from the Happiness Literature and the Role of New Instruments for Policy Analysis After having been ignored for a long time by economists, happiness is becoming an object of serious research in 21 century economics. In Section 2 we sketch the present status of happiness economics. In Section 3 we consider the practical applicability of happiness economics, retaining the assumption of ordinal individual utilities. In Section 4 we introduce a cardinal utility concept, which seems to us the natural consequence of the happiness economics methodology. In Section 5 we sketch how this approach can lead to a normative approach to policy problems that is admissible from a positivist point of view. Section 6 concludes. JEL Classification: B21, B41, D63, I31, I38