What price happiness

The economics of well-being

By John Soderlund


My children engage a mildly amusing interchange that runs something like this:


Child: Would you like me to administer a memory test to you?

Distracted parent: Okay.

Child: What is 2 plus 2?

Parent: 4.

Child: What is 4 plus 4?

Parent: 8.

And so on for another few iterations until the distracted parent becomes the annoyed parent.


Child: What was the first question I asked?

Parent: What is 2 plus 2?

Child: No, I asked whether you would like a memory test.

Child laughs uproariously.


I like to think this little teaser—which has been around at least since I myself was a pre-teen—is an encouraging marker of the emerging capacity to grasp a meta-perspective of the rules of human interaction.

It allows a child to smugly, implicity declare something like: “I had you trapped in what you thought were the rules of the game. But the game was enclosed in a bigger game that you failed to spot.”

Nick Powdthavee is an economist. And economics, as you’re probably aware, is a game with its own peculiar set of rules. In his book entitled The Happiness Equation, Powdthavee has wandered into the territory of human emotions, but he is donning an unmistakably economist-like hat. As what he calls a psychonomist, his job revolves essentially around putting a price on happiness and the myriad variables that appear to influence it.

As therapists, our jobs have a lot to do with happiness, mostly the generation thereof in our clients. They might not tell you so, but probably the majority of therapy clients consider that they’ve got their money’s worth if they leave happier than they were when they began.

Not surprisingly, Powdthavee contends that human happiness is an appropriate area for economic inquiry. But the deeper I got into his book, they more I felt myself wondering whether the game Powdthavee was playing might be only part of a bigger game that I had failed to spot. I wandered whether somebody—much like happens in the memory game my kids like to play—might be waiting for the end of the book to laugh uproariously at my failure to notice that Powdthavee’s game might be a small one within a much larger and enveloping game.


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