The Economics of Happiness: Measuring Development Beyond GDP

The video explores the concept of economic development, highlighting the limitations of traditional measures like the Human Development Index. It introduces happiness economics as an alternative, focusing on subjective measures of well-being. The Easterlin Paradox is discussed, showing that increased income doesn't always lead to greater happiness. The UK's approach to measuring happiness through self-reported surveys is examined, along with the challenges of using such data. The video concludes by emphasizing the importance of considering happiness in assessing a country's development.

What are the three dimensions used in the Human Development Index (HDI)?

• Happiness, Life Satisfaction, Income

• Economic Growth, Employment, Inflation

• Poverty, Income Inequality, Empowerment

• Health, Education, Living Standards

Why is happiness considered an important measure of economic development?

• It is universally accepted as a development indicator.

• It is an objective measure like GDP.

• It reflects the overall quality of life and well-being.

• It is easier to measure than income.

What does the Easterlin Paradox suggest about the relationship between income and happiness?

• Richer societies are always happier.

• Happiness always increases with income.

• Poorer individuals are always less happy.

• Happiness does not significantly change with income beyond a certain point.

According to the Easterlin Paradox, what happens to happiness after reaching a certain income level?

• It starts to decline.

• It remains constant.

• It fluctuates unpredictably.

• It continues to increase.

How does the UK measure happiness in its National Well-being Program?

• By measuring life expectancy.

• Using self-reported surveys.

• By tracking literacy rates.

• Through GDP per capita.

What is a limitation of using self-reported surveys to measure happiness?

• They are universally comparable.

• They may lack accuracy and validity.

• They provide objective data.

• They are too expensive to conduct.

Why is it difficult to compare happiness across different countries?

• Happiness is measured the same way everywhere.

• Cultural differences affect what makes people happy.

• All countries use the same survey questions.

• Happiness is not influenced by income.