Why Should Happiness Have a Role in Welfare Economics? Happiness versus Orthodoxy and Capabilities

Abstract

In this paper we try to understand how the Happiness Literature (HL) approach to Welfare Economics (WE) enriches it by enlarging its scope and power of analysis. To do so, we contrast the HL approach not only with Mainstream Welfare Economics (MWE) but also with the already established Sen’s Capabilities (SC) approach. We demonstrate (particularly for the cases of Income and Freedom) that these different theoretical approaches can imply different policy conclusions even when facing the same problems (mostly when switching from MWE to SC or HL) and that these different approaches have different domains of application (SC and HL with a wider domain than MWE). We also claim that the choice between MWE, SC and HL, even when the policy conclusions are similar, is connected with different axiomatic and philosophic foundations. We then conclude that HL stands out as an autonomous approach to WE with particular assumptions, techniques and policy conclusions.Happiness, Capabilities, Welfare Economics, Welfrae Policies