happiness economics tell Flashcards
Economics
study of consumption of material things through which happiness is derived. Also described as a study of the behaviour of consumption
2 assumptions of economics
1.opportunity cost
2.scarcity
what is opportunity cost?
cost of choosing one alterative option over another- you give up the choice of choosing 1
scarcity
basic economic problem, where unlimited wants are met with limited resources
the choice should be made based on:
-money, allocated in different sectors such as
transportation or healthcare
how are opportunity cost and scarcity related ?
orld is limited in the amount of resources that are available, coupled with the fact that everything has a cost, tangible or intangible
in order to analyse the cost and make the most of limited resources there can be structured approach
GDP
measures everything that is produced within the country
-it is the most used
what is GDP used to measure?
measure of economic activity and it represents the total value added of all goods and services produced in a given period of time
GDP expenditure approach formulae
C + G + I + Nx = GDP
-C=consumption -this is private spending on both durable and non-durable goods
-G=includes government spenditures such as
-I stands for investments in the country on capital equipment, stock/inventories and housing
-NX=net exports -all exports from within the country minus the imports
4 ways increase in GDP lead to happiness?
1.Better access to public transportation
2.Improved resources for education
3.Increase in spending on healthcare
4.More opportunities for consuming goods
economic prosperity
earns all the factors likely to increase alongside
what 2 things was proposed as an alternative to GDP?
1.Human Development Index (HDI)
2.genuine Progress Indicator (GPI)-more relevant to the UK, which is the:the Life Satisfaction Index (LSI)
what 2 things are the objective measures?
HDI and GPI
what is an subjective measure ?
LSI
objective outcome measure?
quantifiable and impartial (not involving emotions), which means that they are not subject individual interpretation (or again, emotion).
what is 2 examples of objective outcome measure?
1.blood count
2.blood pressure
subjective outcome measure?
it is a self-reported outcome which allows the assessment of how people feel about their lives, their quality of life
2 examples of subjective outcome measure?
1.GDH measuring psychological health
2.health education
happy economics
Research studying the relationship between happiness and income
Easterlin paradox
paradox which shows that long term increase in economic growth doesn’t lead to increase in happiness
hedonic adaption (also known as interpersonal adaptation)
idea that an individual’s level of happiness will return to an individualistic baseline despite any positive or negative experiences
what is the EQ-5D ?
generic measurement of health status and allows comparison across different disease areas
