Happiness and Economics: Some Ethical Considerations

his Paper makes an attempt to shed some light on a number of ethical issues that arise in empirical research on the relationship between choice, socio-economic conditions, and happiness. It argues that only an ethical perspective allows to appreciate the deeper meaning of happiness and to do justice to its moral dimension. As a principal result of psychological research on the effect of income on happiness it emerges that there is no natural law-like relationship between the two once basic needs are met. Two major consequences of happi-ness research for economic theory are emphasized. First, the existence of a free will puts limits on the validity of economic decision theory and implies that happiness cannot be separated from morality. Second, the claim that people know best which consumption decisions will make them happy overlooks the pervasiveness of adverse systemic effects of non-coordinated decisions (esp. prisoner?s dilemma). Furthermore, it is argued that the happiness we actually value is more than merely subjective well-being, and that social welfare is more than happiness. Finally, a few policy implications are discussed.