Economics of Happiness 2400-ZEWW966

As part of the course, the following topics will be covered in sequence:

1. Introductory session

This session will present the course objectives, schedule, and assessment criteria. Additionally, stylized facts about happiness from an international perspective will be introduced.

2. Theoretical perspectives on happiness, its measures, and the link to utility

Happiness will be defined from economic (as a measure of experienced utility), psychological, and philosophical perspectives, and the differences between these approaches will be discussed. Measures of happiness and its components will be presented, with particular emphasis on their reliability and statistical properties.

3. The Easterlin Paradox – does economic growth increase happiness?

This session will examine the so-called Easterlin Paradox, which suggests that long-term national income growth does not necessarily lead to higher average happiness. Explanations for the paradox will be analyzed, along with arguments for and against it, and its implications for public policy. The use of GDP per capita as a proxy for social welfare will also be critically assessed.

4. The relationship between income and happiness, adaptation mechanisms, and material aspirations

This session will explore the link between individual income and subjective well-being, with a special focus on hedonic adaptation and the impact of material aspirations on perceived happiness.

5. Reference income, social comparisons, and the tunnel effect

Students will learn about the mechanisms of social comparison and their influence on self-assessment of life circumstances. The tunnel effect will also be discussed — a situation in which an increase in others’ income can enhance one’s own sense of happiness.

6. Social inequality, relative deprivation, and happiness

This session will examine the impact of income and wealth inequality on individual subjective well-being. The theory of relative deprivation, the concept of social mobility, and empirical research findings in this area will be presented.

7. How inflation, unemployment, and economic crises affect citizens’ happiness

This session will address macroeconomic factors that influence happiness, such as unemployment, inflation, and economic recessions. Discussions will be based on empirical data and theories at the intersection of economics and psychology.

8. International rankings and cultural differences in reported happiness

Students will analyze international happiness rankings, such as the World Happiness Report. The session will explore how cultural and social differences affect the way people report their happiness.

9. Lack of happiness as a motivation to migrate?

This part will focus on the relationship between migration and the pursuit of a better quality of life and happiness. The role of subjective well-being as a motivating factor for migration decisions will be discussed, along with happiness trajectories after migration.

10. The labor market and happiness: perspectives of employees and employers

This course section will cover determinants of happiness related to employment, working conditions, job satisfaction, and work-life balance. The importance of employee happiness for organizational effectiveness will also be addressed.

11. Happiness trajectories in the context of major demographic events

Students will analyze changes in happiness across different life stages and key life events, such as marriage, divorce, childbirth, and retirement. The topic of adaptation and the factors influencing its pace will be explored.

12. Happiness in the context of contemporary social challenges

This session will examine the impact of global and local challenges—such as climate change, air pollution, the housing crisis, and digitalization—on individual well-being. Students will reflect on how changing social and technological conditions shape modern understandings of happiness. The influence of social media on well-being will also be discussed.