The Happiness Equation: The Surprising Economics of Our Most Valuable Asset

By Nick Powdthavee

Why is marriage worth £200,000 a year?

Why will having children make you unhappy?

Why does happiness from winning the lottery take two years to arrive?

Why does time heal the pain of divorce or the death of a loved one – but not unemployment?

Everybody wants to be happy. But how much happiness – precisely – will each life choice bring? Should I get married? Am I really going to feel happy about the career that I picked? How can we decide not only which choice is better for us, but how much it’s better for us?

The result of new, unique research, The Happiness Equation brings to a general readership for the first time the new science of happiness economics.

It describes how we can measure emotional reactions to different life experiences and present them in ways we can relate to. How, for instance, monetary values can be put on things that can’t be bought or sold in the market – such as marriage, friendship, even death – so that we can objectively rank them in order of preference. It also explains why some things matter more to our happiness than others (like why seeing friends is worth more than a Ferrari) while others are worth almost nothing (like sunny weather).

Nick Powdthavee – whose work on happiness has been discussed on both the Undercover Economist and Freakanomics blogs – brings cutting-edge research on how we value our happiness to a general audience, with a style that wears its learning lightly and is a joy to read.

• Language: English
• Publisher: Icon Books Ltd
• Release date: Aug 5, 2010
• ISBN: 9781848312241

Reviews for The Happiness Equation

[sassybrit · Rating: 4 out of 5 stars]

Happiness is Subjective? Not Anymore!

If you thought happiness with subjective you may do well to read this book and rethink your ideas. The Happiness Equation: The Surprising Economics of Our Most Valuable Asset is a real treat for me. Nick Powdthavee has managed to bring a book classified as economics to my attention in the most enjoyable, witty and interesting way yet. The aim of this book is to find a scientific way of constructing a "happiness formula" through measuring and studying peoples emotions and reactions to different life events regarding what makes us truly happy. It is also an account of Powdthavee's personal journey for the pursuit of happiness, and how we can take steps in the right direction to find ours.

Can money really buy everything? Love maybe, but what about happiness? If you had the prefect life-fulfilling job - would your happy life be complete? These are just some of the issues raised, and discussed in fascinating detail.

[_zoe__1 · Rating: 3 out of 5 stars]

I just didn't enjoy this book. Even though it's the sort of topic that I usually like, I found myself struggling to get through it so that I could write my review. At first I thought that the problem might be the writing: Powdthavee sometimes writes like a mathematician (or economist?), with an extreme precision that can actually get in the way of the reading. On further reflection, though, I think the problem is deeper than that: I sometimes just didn't find the concepts convincing. For example, a couple of chapters are devoted to the idea of assigning a monetary value to the happiness effect of certain events: getting married, or the death of a child. Powdthavee lays out an initial approach that comes up with certain values, and then says that there's another factor that needs to be taken into account, leading to a revision of the numbers. The difference is several orders of magnitude: something like $100,000 vs. $5000. And the way he presented it didn't make it clear to me that the "final" answer was any more complete than the initial attempt. If different methods can lead to such different outcomes, I found myself wondering whether the entire idea was meaningful at all.On a similar note, Powdthavee makes a big deal about how having children doesn't really make us happy, despite all the common opinion to the contrary. This is a theme that persists throughout the whole book. And then there are a couple of pages toward the end where he introduces the concept of life satisfaction. He says that even things that don't make us happy per se can lead to greater life satisfaction, while things that do make us happy, like watching television, may do nothing for our overall satisfaction with life. This seems like a huge issue to me, and again made me question the point of the whole book. Maybe "happiness" isn't what we should be focusing on after all, and then the results won't seem as surprising. I'm personally a lot more concerned about my overall life satisfaction than I am about my happiness at any given moment. I'd rather go through the difficult experience of raising children than spend my life watching television. I don't think Powdthavee's treatment of this issue was nearly sufficient; as with the whole book, I was left with the impression that he had somehow missed the mark.

[mlorio_3 · Rating: 4 out of 5 stars]

This is a fascinating book for anyone interested in what makes us tick. It makes the strong case that what we think will make us happy in reality has only a limited impact on our happiness or quite possibly does not make us happy at all. The author does get into some rather technical descriptions of studies on happiness. While some of the reasoning was at times hard to follow, there were also explantations that helped me to understand concepts I've had a hard time understanding before. All in all an compelling read.

[helcura_1 · Rating: 4 out of 5 stars]

When I took economics in college, I was disillusioned to discover that classic economics is based on a lie - the existence of the imaginary "homo rationalis" for whom money is the only thing that matters and for whom more money is always more important that anything else. As anyone with any common sense knows, money isn't always the most important criterion in making a decision.In the past few years there has been a change in economics as a few persistent researchers have begun to look at economics in a much more realistic way.This book details some of those new ways of looking at economics and the results of some of the studies of happiness researchers who have been trying to understand what makes most of us happy and why some people are happier that others.Powdthavee writes in a readable style, with a slightly academic tone. His examples are interesting and varied and provide a good introduction to an area of economics that is in flux as a whole new way of looking at money and value are being developed. Many of the theories presented in this book are themselves in flux and the book should spark interest in this dynamic topic.This book is a worthwhile read for anyone, even those who are not particularly familiar with classic economics.

[elektherelic · Rating: 2 out of 5 stars]

I feel bad about this, but I just cannot finish this book. I made it to chapter 3 so I am not sure if you will find this review to be helpful or adequate, but I will give it a shot. First, the material is thorough and interesting. Powdthavee clearly knows has done the research and is an intelligent author. That being said, this first chapter of this book reads entirely too much like the lit. review for a dissertation; it is complex and very deep, but often boring and confusing as one tries to follow all the arguments economists have presented on whether or not and why they find happiness to be a measurable equation. After reading all of this, the book gets a tad easier to read, but I really felt like I was reading a text book; humorous at times, but mostly tedious. If you are truly into economics, I recommend this book to you, but it is certainly not bedtime reading. I hope to pick this book up and finish it one day, but I feel like I am just not in the place to give this book the attention it deserves.

[vikinggypsy · Rating: 4 out of 5 stars]

I found this book to be quite thought provoking. Although some of the presented material came of no suprise to me, there were many ideas, results, and logic that surprised me, but made sense. I enjoyed this book because, although some may argue its subjectiveness, Powdthavee presented research, studies, and economic theories to back up his work. Although this is not a 'self help' book in the general sense, there are many thoughts and ideas that one could apply to their personal lives in order to better themselves, or help them on the road to achieving their own personal happiness. I would recommend this book to anyone interested in psychology, sociology, or economics.

[kattatonia · Rating: 4 out of 5 stars]

I found this book to be quite thought provoking. Although some of the presented material came of no suprise to me, there were many ideas, results, and logic that surprised me, but made sense. I enjoyed this book because, although some may argue its subjectiveness, Powdthavee presented research, studies, and economic theories to back up his work. Although this is not a 'self help' book in the general sense, there are many thoughts and ideas that one could apply to their personal lives in order to better themselves, or help them on the road to achieving their own personal happiness. I would recommend this book to anyone interested in psychology, sociology, or economics.

[quaintlittlehead · Rating: 4 out of 5 stars]

This book describes scientific investigations about what really makes people happy and puts the answers in terms ordinary people can understand: dollars (or pounds) and cents. The author investigates how much money some one would have to give you to make you as happy as if you experienced certain life events such as marriage or having a child, or how much compensation it would take to offset the unhappiness of a job loss or a death or divorce. The answers, and the proposed reasons behind them, are not all intuitive and are rather fascinating. Though the author still gets his point across by contrasting happiness with doing something meaningful, it would have been nice if he had operationalised what he meant by happiness better in early portions of the book. What he is after seems to be a pure, hedonic sensation of pleasure, rather than a moral grasp of contentment. It is not as if the author sees no value in the latter; indeed, the book closes with a personal foray into Buddhist beliefs that stands out in sharp contrast from the largely academic tone of the rest of the book. Readers of other religious persuasions will probably come away with this book with a different take on the subject than Powdthavee presents, but that just goes to show you why this book is so counterintuitive, and thus a worthy and interesting subject for exploration. Readers should also note, finally, that this is not a self-help text, but a scientific exposition presented through a popular lens, yet still at a relatively high reading level.

[jaden_39 · Rating: 3 out of 5 stars]

I had a hard time finishing The Happiness Equation. The author gets mired down in equations and economic theory early on, then wends his way on tangents that hardly relate to the original topic of happiness. The writing was dense and dry. However, all is not lost. If you're willing to take the time, the book has insightful data that can be used to understand happiness better.For example, one insightful discovery is that we bounce back from negative experiences only when we can "close" on an issue. This means we can be happier even after the death of a loved one by talking about our emotions and finding closure. In contrast, if our mind is continually dwelling on an experience (such as an unpleasant daily commute or being unemployed), then happiness will continue to suffer.In the end I found the book useful in spite of its flaws, but if you're looking for a single book to deal with the topic, this isn't it. Instead I recommend Stumbling On Happiness by Dan Gilbert, Happiness by Matthieu Ricard or even The Pursuit of Perfect by Tal Ben-Shahar.

[acornell_13 · Rating: 3 out of 5 stars]

This new book, The Happiness Equation: The Surprising Economics of our Most Valuable Asset by Nick Powdthavee, studies happiness now from an economic standpoint. The author is an economist by training and attempts to translate economic studies on happiness from economics journals to studies and stories that the rest of us can use and follow. Most of it asks and answers interesting economic questions about the pursuit of happiness. In general, much of it reads like an economics primer and would be interesting if you followed economics news and had a head for the vagaries of the study of the economy. I was a C student in economics, and it often made my head swim, so I was perhaps not the best early reviewer for this book. Parts that piqued my interest most of all were the discussions on the happiness factor of parenthood (really none of us is very happy) and the fact that perhaps we have an overblown sense of the right to be happy. Some people prefer to pursue a more interesting life rather than a pleasurable one. The books asks, who makes us think that we have to be happy? I was also pleasantly interested in the discussion about the ability of a government to coerce their people into doing things that will make them happy through the right kind of policies and legislation and marketing. Have you ever heard of libertarian paternalism?--now there's an oxymoron. And of course no book on the study of happiness would be complete without a look at the famous country of Bhutan whose monarch actually put into place the idea of GDH-Gross Domestic Happiness. Who cares about the product when what you really want is to make the people happy. Really?