Enjoying life takes time and needs people (by Maurizio Pugno, MPRA working paper)

People gain enjoyment from exercising their agency and interacting with others in order to accomplish projects and change reality, as is evident from the successful evolution of homo sapiens. Hence, time can be enjoyable in both pursuing and achieving socially valued goals. Since modern economic progress offers products in growing abundance, thus increasingly exploiting individuals’ time and interaction, people are tempted to seek enjoyment in another way, i.e. in consumption itself, as homo economicus would suggest. On the basis of various evidence, the paper argues that people can choose between these two ways leading to well-being; that the homo economicus way is less effective or even perverse; and that economic progress weakens people’s skill to undertake the homo sapiens way. These arguments help explain why the economy of a country, such as the USA, can grow over decades whereas its citizens become less able to enjoy their lives.

Published in MPRA Paper No. 104378 (downloadable)

Teenage Wellbeing (by the World Wellbeing Panel)

For half a decade the World Wellbeing Panel (WWP) has promoted wellbeing as the ultimate purpose of all major decision makers, particularly government.

This October/November, members of the World Wellbeing Panel were asked whether they agreed or disagreed with two statements about teenage wellbeing:

(i) “In developed countries, average teenage wellbeing levels have reduced over the last decade”; and

(ii) “We have clear evidence on why the wellbeing of teenagers is dropping.”

These are their answers.

Structural changes in economic growth and well-being. The case of Italy’s parabola (by Maurizio Pugno and Francesco Sarracino – MPRA working paper)

diagram-on-swb-in-Italy 1

The controversies on the relationship (or `gradient’) between GDP and subjective well-being oppose those who claim that the gradient is positive and stable around the world to those who argue that long-run trends of subjective well-being are flat despite economic growth. The possible existence of structural breaks of the gradient within the same country is a challenge to both views. By focusing on the case of Italy, we show that the long-run trends of GDP and of well-being turned from increasing to decreasing, and the gradient exhibits a rise through two structural breaks. Macro and micro analyses explain why the gradient changes, and we find evidence consistent with the `loss aversion’ hypothesis. In addition, the gradient changed because the erosion of trust in others, the increase of financial dissatisfaction and worsened health hinder well-being independently from income.

Paper published as working paper, and then submitted and under revision (R&R).

On the Foundations of Happiness in Economics: Reinterpreting Tibor Scitovsky by Maurizio Pugno (NOW IN 2018 PAPERBACK EDITION)

cover and endorsements - 5

Economic growth has extraordinarily increased the availability of market goods to satisfy people’s need for comfort, but at the same time it has also raised great challenges to their working, family, and personal lives. Will people learn the skill necessary to cope with these challenges and take full enjoyment from economic growth? The book of Maurizio Pugno explores this question starting from the insights of Tibor Scitovsky (Budapest 1910 – Stanford 2002), and approaching a theory of ‘human welfare’. Along this research line, Amartya Sen’s idea on the centrality of human capacities is developed by modifying the traditional approach of the economic choice. The empirical basis is mainly provided by the recent studies in Economics of Happiness, but also in Behavioural Economics, as well as in the very recent studies of Economics of Human Capital. The most original aspect, however, may be the integration with important concepts of psychology, like motivation, realization of inner potential, and secure social attachment.

cover and endorsements - 5

The book provides, at the same time, a theory on ‘human welfare’, a discussion on how it was conceived by Scitovsky and other economists before him, an account of Economics of Happiness from this perspective, and an application to people’s experience of living in competitive market economies. The unifying concept of the book is learning as an enjoyable and challenging activity. This may enable people to develop the typical human skill, being both social and creative, of setting and pursue the goals that are adequate for their natural dispositions. However, the economic and social conditions are not always favourable to the development of such ‘human welfare’. This may explain why happiness may not improve despite the economic growth.

The book is not only the first and only monograph on Scitovsky. It is also an original proposal of a micro-macro framework that researchers and general readers can use to interpret current trends of happiness, to devise new policies for human development, and to understand people’s personal lives.

Table of Contents

Introduction – 1. Happiness in economics: the roots and perspectives of a research programme – 2. Scitovsky’s research programme on human welfare – 3. Enjoying creative activity by developing life skill – 4. Comfort vs. creative activity as two sources of well-being – 5. Addiction: from well-being to ill-being – 6. Are we heading for a ‘joyless economy’? – A new look at Scitovsky’s concern – 7. Keynes’s ‘Economic possibilities for our grandchildren’: Scitovsky’s suggested new interpretation – 8. Creative activity and well-being for a new economic growth – Conclusions

Endorsements

‘This is a most welcome contribution. Maurizio Pugno makes a valuable effort to introduce and reinterpret the insight by Tibor Scitovsky into Modern Happiness Economics. These insights have wrongly, and to a large extent, been disregarded in the literature. Pugno discusses e.g. the importance of intrinsic motivation and creativity for happiness, opening up a challenging and fruitful direction of research.’ — Bruno S. Frey Permanent Visiting Professor, University of Basel, Switzerland.

     ‘Scitovsky’s pioneering contributions on the relationship between economic growth and human wellbeing have so far not received from modern behavioural and happiness economists the attention they deserve. This should change as a result of Maurizio Pugno’s labour of love that has resulted in this most useful volume that sets Scitosvky’s work in context and presents it in today’s more technical style’ — Peter Earl, University of Queensland, Australia and co-editor of the Journal of Economic Psychology 2000-2003.

For excerpts and commercial information, see the website of the publisher