David Coleman had not slept well. Through the night his thoughts had kept returning to Three Counties Hospital, its pathology department, and Dr. Joseph Pearson.
None of the events of the past few days had changed in the slightest degree Dr. Pearson’s culpability in the death of the Alexander baby. Whatever his responsibility a week ago, it still remained the same. Nor had Coleman revised his own opinion that pathology at Three Counties was an administrative mess, bogged down by outdated concepts and handicapped by antiquated methods and equipment which should have been shaken loose long since.
And yet, uneasily over the past four days, David Coleman had found his feelings toward Pearson changing and moderating. Why? A week ago he had looked on Pearson as a near-senile incompetent, clinging to power beyond his time. Since then nothing tangible had happened to change that conviction. What reason was there, then, for his own uneasiness about it now?
It was true, of course, that the old man had handled the typhoid outbreak and its aftermath with a decision and competence that was perhaps a good deal better than Coleman could have managed himself. But was that so surprising? After all, experience counted for something; and the situation being what it was, it was understandable that Pearson should want to rise to it well.
But it was his own total view of Pearson that was less clear-cut, less firm. A week ago he had classified the old pathologist—whatever his achievements of the past—among the intellectual “havenots.” Now David Coleman was no longer sure. He suspected that in time to come he would be unsure about a good deal more.
The sleeplessness had brought him early to the hospital, and it was a little after 8 a.m. when he entered the pathology office. Roger McNeil, the resident, was at Pearson’s desk.
“Good morning,” McNeil said. “You’re the first. I guess the others are sleeping in.”
David Coleman asked, “Did we get very far behind—with other work?”
“It isn’t too bad,” McNeil said. “There’s quite a bit of non-urgent stuff, but I kept pace with all the rest.” He added, “Seddons helped a lot. I’ve told him he should stick with pathology instead of going back to surgery.”
Another thought had been troubling Coleman. He asked the resident, “That student nurse—the one who had the amputation. Has the leg been dissected yet?” He was remembering that this was the diagnosis on which Pearson and himself had differed.
“No.” McNeil selected a case file from several on the desk. “Vivian Loburton,” he read out, “that’s the girl’s name. It wasn’t urgent, so I left it. The leg is still in the refrigerator. Do you want to do it yourself?”
“Yes,” Coleman said. “I think I will.”
He took the file and went to the autopsy-room annex. From the morgue refrigerator he obtained the leg and began to remove the gauze wrappings. Exposed, the flesh was cold and white, the blood coagulated where the limb had been severed halfway up the thigh. He felt for the area of tumor and encountered it at once—a hard lumpish mass on the medial side, just below the knee. Taking a knife, he cut down deeply, his interest mounting at what he saw.
The manservant took Kent O’Donnell’s topcoat and hat, hanging them in a closet of the gloomy, lofty hallway. Looking about him, O’Donnell wondered why anyone—wealthy or not—would choose to live in such surroundings. Then he reflected that perhaps to someone like Eustace Swayne the gaunt spaciousness, the beamed and paneled opulence, the walls of cold chiseled stone, conveyed a feudal sense of power, linked through history to older days and places. O’Donnell speculated on what would happen to this house when the old man died. More than likely it would become a museum or an art gallery or perhaps merely stand empty and decay as so many of these places had. The notion that someone else would take it as a home seemed inconceivable. This was a place which, logic said, should close its doors at five until next morning. Then he remembered that within these austere walls Denise must have spent her childhood. He wondered if she had been happy here.
“Mr. Swayne is a little tired today, sir,” the manservant said. “He asked if you would mind if he received you in his bedroom.”
“I don’t mind,” O’Donnell said. It occurred to him that perhaps the bedroom might be an appropriate place for what he had to say. If Eustace Swayne had apoplexy as a result, at least there would be a handy place to lie him down. He followed the manservant up the wide, curved stairway, then down a corridor, their footsteps silenced by deep broadloom. At a heavy, studded door the man tapped lightly and lifted a wrought-iron latch. He ushered O’Donnell into the spacious room beyond.
At first O’Donnell failed to see Eustace Swayne. Instead his eyes were caught by a massive fireplace framing a roaring log fire. The heat from the fire was like an impact, the room almost unbearably hot on the already mild late-August morning. Then he saw Swayne, propped up by pillows in a huge four-poster bed, a monogrammed robe draped around his shoulders. As he approached O’Donnell noticed with shock how frail the old man had become since their last meeting—the night of the dinner with Orden Brown and Denise.
“Thank you for coming,” Swayne said. His voice, too, was weaker than before. He motioned his visitor to a chair beside the bed.
As he seated himself O’Donnell said, “I heard you wanted to see me.” In his own mind he was already revising some of the forthright statements which earlier he had planned to make. Nothing would change his own stand, of course, concerning Joe Pearson, but at least he could be gentle. O’Donnell had no wish now to tangle with this ailing old man; any contest between them would be too uneven.
“Joe Pearson has been to see me,” Swayne said. “Three days ago, I think it was.”
So that was where Pearson had been those missing hours when they were trying to locate him. “Yes,” O’Donnell answered, “I imagined he would.”
“He told me that he’s leaving the hospital.” The old man’s voice sounded weary; there was no hint so far of the denunciation of O’Donnell which the chief of surgery had expected.
Curious about what was coming next, he answered, “Yes, that’s true.”
The old man was silent. Then he said, “I suppose there are some things no one can control.” There was a trace of bitterness now. Or was it resignation? It was hard to be sure.
“I think there are,” O’Donnell answered gently.
“When Joe Pearson came to see me,” Eustace Swayne said, “he made two requests. The first was that my donation to the hospital building fund should have no stipulations attached. I have agreed.”
There was a pause, O’Donnell silent, as the significance of the words sank in. The old man went on, “The second request was a personal one. You have an employee at the hospital—his name is Alexander, I believe.”
“Yes,” O’Donnell said wonderingly. “John Alexander—he’s a laboratory technologist.”
“They lost a child?”
O’Donnell nodded.
“Joe Pearson asked that I pay the boy’s way through medical school. I can do it, of course—quite easily. Money at least has a few remaining uses.” Swayne reached for a thick manila envelope which had been lying on the quilt. “I have already instructed my lawyers. There will be a fund—enough to take care of fees and for him and his wife to live comfortably. Afterward, if he chooses to specialize, there will be money for that too.” The old man paused, as if tired by speaking. Then he continued, “What I have in mind now is something more permanent. Later there will be others—I suppose equally deserving. I would like the fund to continue and to be administered by the Three Counties’ medical board. I shall insist on only one condition.”
Eustace Swayne looked squarely at O’Donnell. He said defiantly, “The fund will be named the Joseph Pearson Medical Endowment. Do you object?”
Moved and ashamed, O’Donnell answered, “Sir, far from objecting, in my opinion it will be one of the finest things you have ever done.”
“Please tell me the truth, Mike,” Vivian said. “I want to know.”
They faced each other—Vivian in the hospital bed, Mike Seddons standing, apprehensively, beside it.
It was their first meeting following their time apart. Last night, after cancellation of Vivian’s transfer order, she had tried a second time to reach Mike by telephone, but without success. This morning he had come, without her calling, as they had arranged six days ago. Now her eyes searched his face, fear nudging her, instinct telling what her mind refused to know.
“Vivian,” Mike said, and she could see him trembling, “I’ve got to talk to you.”
There was no answer, only Vivian’s steady gaze meeting his own. His lips were dry; he moistened them with his tongue. He knew that his face was flushed, felt his heart pounding. His instinct was to turn and run. Instead he stood, hesitating, groping for words which refused to come.
“I think I know what you want to say, Mike.” Vivian’s voice was flat; it seemed drained of emotion. “You don’t want to marry me. I’d be a burden to you—now, like this.”
“Oh, Vivian darling——”
“Don’t, Mike!” she said. “Please don’t!”
He said urgently, imploringly, “Please listen to me, Vivian—hear me out! It isn’t that simple . . .” Again his speech faltered.
For three days he had sought the right words and phrases to meet this moment, yet knowing whatever form they took the effect would be the same. In the interval between their last meeting Mike Seddons had probed the inner chasms of his soul and conscience. What he had found there had left him with disgust and self-contempt, but he had emerged with truth. He knew with certainty that a marriage between himself and Vivian would never succeed—not because of her inadequacy, but through his own.
In moments of searching self-examination he had forced himself to consider situations the two of them might meet together. In a flood light of imagination he had seen them entering a crowded room—himself young, virile, unimpaired; but Vivian on his arm, moving slowly, awkwardly, perhaps with a cane, and only as an artificial limb allowed. He had seen himself dive through surf, or lie on a beach near-naked in the sun, but with Vivian dressed decorously, sharing none of it because a prothesis was ugly when exposed and, if removed, she would become a grotesque, immobile freak—an object for pitying or averted eyes.
And more than this.
Overcoming every reluctance and instinctive decency, he had let himself consider sex. He had pictured the scene at night, before bed. Would Vivian unstrap her synthetic leg alone, or would he help her? Could there be intimacies of undressing, knowing what lay beneath? And how would they make love—with the leg on or off? If on, how would it be—the hard, unyielding plastic pressing against his own urgent body? If off, how would the stump feel beneath him? Would there be fulfillment—in intercourse with a body no longer whole?
Mike Seddons sweated. He had plumbed the depths and found his own reflection.
Vivian said, “You needn’t explain, Mike.” This time her voice was choked.
“But I want to! I’ve got to! There are so many things we both have to think of.” Now the words came quickly, tumbling out in an eager effort to make Vivian understand, to know the agony of mind he had suffered before coming here. Even at this moment he needed her understanding.
He started to say, “Look, Vivian. I’ve thought about it and you’ll be better off . . .”
He found her eyes regarding him. He had never noticed before how steady and direct they were. “Please don’t lie, Mike,” she said. “I think you’d better go.”
He knew it was no good. All that he wanted now was to get away from here, not to have to meet Vivian’s eyes. But still he hesitated. He asked, “What will you do?”
“I really don’t know. To tell you the truth, I haven’t thought much about it.” Vivian’s voice was steady, but it betrayed the effort she was making. “Perhaps I’ll go on in nursing, if they’ll have me. Of course, I really don’t know if I’m cured, and if I’m not, how long I’ve got. That’s so, isn’t it, Mike?”
He had the grace to lower his eyes.
At the doorway he looked back for the last time. “Good-by, Vivian,” he said.
She tried to answer, but her self-control had been taxed too long.
From the second floor Mike Seddons used the stairway to reach Pathology. He entered the autopsy room and in the annex found David Coleman dissecting a leg. Seddons looked at the limb and saw it white and lifeless, the dark blood seeping out from Coleman’s knife cuts. For an instant of horror he pictured it nylon-sheathed, a high-heeled sandal upon the foot. Then, with an awful fascination, he crossed the room and read the name in the open case file.
When he had done so, Mike Seddons went into the corridor and vomited against the wall.
“Oh, Dr. Coleman! Do come in.”
Kent O’Donnell got up courteously from his office desk as the young pathologist entered the room. David Coleman had been cleaning up after the dissection when the message from the chief of surgery had reached him.
“Sit down, won’t you?” O’Donnell held out an engraved gold case. “Cigarette?”
“Thank you.” Coleman took a cigarette and accepted the light O’Donnell offered. He leaned back, relaxed, in one of the leather armchairs. An instinct told him that what was to follow would be a turning point in his life.
O’Donnell moved behind the desk to the office window. He stood with his back to it, the morning sun behind him. “I imagine you’ve heard,” he said, “that Dr. Pearson has resigned.”
“Yes, I’d heard.” Coleman answered quietly, then to his own surprise he heard himself saying, “You know, of course, these past few days he hasn’t spared himself. He’s been here day and night.”
“Yes, I know.” O’Donnell regarded the glowing tip of his cigarette. “But it doesn’t change anything. You realize that?”
Coleman knew that the chief of surgery was right. “No,” he said, “I don’t suppose it does.”
“Joe has expressed a wish to leave at once,” O’Donnell continued. “It means there will be an immediate vacancy here for a director of pathology. Shall you accept?”
For a second David Coleman hesitated. This was the thing he had coveted—a department of his own; freedom to reorganize, to mobilize the new aids of science, to practice good medicine, and to make pathology count as he knew it truly could. This was the cup he had sought. Kent O’Donnell had lifted it to his lips.
Then fear struck him. Suddenly he was appalled at the awesome responsibility he would have to hold. It occurred to him there would be no one senior to relieve him of decisions; the ultimate choice—the final diagnosis—would be his alone. Could he face it? Was he yet ready? He was still young; if he chose, he could continue as a second-in-command for several years more. After that there would be other openings—plenty of time to move ahead. Then he knew that there was no escaping, that this moment had been moving toward him since his own first arrival at Three Counties Hospital.
“Yes,” he said. “If it’s offered to me, I shall accept.”
“I can tell you that it will be offered.” O’Donnell smiled. He asked, “Would you tell me something?”
“If I can.”
The chief of surgery paused. In his mind he was choosing the right phrases for the question he wanted to put. He sensed that what was to be said next would be important to them both. Finally he asked, “Will you tell me what your attitude is—to medicine and to this hospital?”
“It’s hard to put into words,” Coleman said.
“Will you try?”
David Coleman considered. It was true there were things he believed, but even to himself he had seldom expressed them. Now, perhaps, was a time for definition.
“I suppose the real thing,” he said slowly, “is that all of us—physicians, the hospital, medical technology—exist only for one thing: for patients, for healing of the sick. I believe we forget this sometimes. I think we become absorbed in medicine, science, better hospitals; and we forget that all these things have only one reason for existence—people. People who need us, who come to medicine for help.” He stopped. “I’ve put it clumsily.”
“No,” O’Donnell said. “You’ve put it very well.” He had a sense of triumph and of hope. Instinct had not belied him; he had chosen well. He foresaw that the two of them—as chief of surgery and director of pathology—would be good together. They would go on and build and, with them, Three Counties would progress. Not all that they wrought would be perfect; it never was. There would be flaws and failures, but at least their aims were the same, their feelings shared. They would have to remain close; Coleman was younger than himself, and there were areas in which O’Donnell’s greater experience could be of help. In these past few weeks the chief of surgery himself had learned a good deal. He had learned that zeal could lead to complacency as surely as indifference, and that disaster could be reached by many routes. But from now on he would fight complacency on every front, and Pathology, with young Dr. Coleman at its head, could be a stout right arm.
A thought occurred to him. He asked, “One more thing. How do you feel about Joe Pearson and the way he’s leaving?”
“I’m not sure,” David Coleman said. “I’ve been wishing I knew.”
“It’s not such a bad thing to be unsure sometimes. It takes us away from rigid thinking.” O’Donnell smiled. “There are some things I think you should know though. I’ve been talking with some of the older men on staff; they’ve told me incidents, things I didn’t know about.” He paused. “Joe Pearson has done a great deal for this hospital in thirty-two years—things that are mostly forgotten now or that people like you and me don’t always get to hear about. He started the blood bank, you know. It’s strange to think of it, but there was a lot of opposition at the time. Then he worked for the formation of a tissue committee; I’m told a good many staff men fought him bitterly on that. But he got the committee and it did a lot to raise the standard of surgery here. Joe did some investigative work, too—on the cause and incidence of thyroid cancer. Most of it’s generally accepted now, but few people remember that it came from Joe Pearson.”
“I didn’t know,” Coleman said. “Thank you for telling me.”
“Well, these things get forgotten. Joe brought a lot of new things into the lab, too—new tests, new equipment. Unfortunately there came a time when he didn’t do new things any more. He let himself vegetate and get in a rut. It happens sometimes.”
Suddenly Coleman thought of his own father, his strong suspicion that the sensitized blood which killed the Alexanders’ child had stemmed from a transfusion his father had given years before—given without Rh typing, even though the dangers were already known to medicine.
“Yes,” he said. “I suppose it does.”
Both men had risen and moved to the door. As they went out O’Donnell said softly, “It’s a good thing for all of us to have compassion. You see, you never know whether someday you’ll need it yourself.”
Lucy Grainger said, “Kent, you look tired.”
It was early afternoon, and O’Donnell had paused in a main-floor corridor. Unnoticed, she had stopped beside him.
Dear Lucy, he thought—unchanged, warm and tender. Was it really less than a week ago that he had considered leaving Burlington and marrying Denise? At the moment it all seemed far away—a nostalgic interlude that now was nothing more. Here was where he belonged; in this place, for good or ill, was where his destiny lay.
He took her arm. “Lucy,” he said, “let’s meet soon. There’s a lot we have to talk about.”
“All right.” She smiled with affection. “You may take me to dinner tomorrow.”
Side by side, they moved on down the hallway, and it was somehow reassuring to have her beside him. He glanced sideways at her profile, and there came to him a sense of certainty that for both of them there was much that was good ahead. Perhaps it would take time to adjust, but in the end he knew they would find their future together.
Lucy was thinking: Dreams do come true; perhaps mine will—someday soon.
Dusk came early to Pathology. It was a price they paid for working in the hospital basement. Snapping lights on, David Coleman decided that one of his early projects would be to move the department to a better location. The day when pathologists were automatically relegated to the bowels of the hospital was over; light and air were as much requisites for them as for any other branch of medicine.
He entered the pathology office and found Pearson at his desk. The old man was emptying the contents of the drawers. He looked up as Coleman came in.
“It’s a funny thing,” he said, “how much junk you can accumulate in thirty-two years.”
For a moment David Coleman watched. Then he said, “I’m sorry.”
“Nothing to be sorry about.” Pearson answered gruffly. He closed the last drawer and put papers in a case. “I hear you’re getting a new job. Congratulations.”
Coleman said, and meant it, “I wish it could have been some other way.”
“Too late to worry now.” He snapped the locks on the case and looked around. “Well, I guess that’s everything. If you find anything else you can send it with my pension check.”
“There’s something I want to tell you,” Coleman said.
“What’s that?”
Coleman spoke carefully. “The student nurse—the one who had her leg amputated. I dissected the limb this morning. You were right. I was wrong. It was malignant. Osteogenic sarcoma without a doubt.”
The old man paused. He gave the impression that his thoughts were far away. “I’m glad I didn’t make a mistake,” he said slowly, “about that anyway.”
He picked up a topcoat and moved to the door. He seemed about to go, then turned back. Almost diffidently he asked, “Do you mind if I give you some advice?”
Coleman shook his head. “Please do.”
“You’re young,” Pearson said. “You’re full of spice and vinegar—that’s good. You know your stuff too. You’re up to date—you know things that I never did, never will now. Take my advice and try to keep it that way. It’ll be tough to do; make no mistake about it.” He waved toward the desk he had just vacated. “You’ll sit ha that chair and the phone will ring, and it’ll be the administrator—talking about budgets. Next minute one of the lab staff will want to quit; and you’ll have to smooth that out. And the doctors will come in, and they’ll want this bit of information and that.” The old man smiled thinly. “Then you’ll get the salesman—the man with the unbreakable test tube and the burner that never goes out. And when you’re through seeing him there’ll be another and another and another. Until at the end of a day you’ll wonder what happened to it and what you’ve accomplished, what you’ve achieved.”
Pearson stopped and Coleman waited. He sensed that in his words the old pathologist was reliving a part of his own past. He went on, “That’s the way the next day can go, and the next, and the one after that. Until you find a year has slipped by, and another, and another. And while you’re doing all this you’ll send other people on courses to hear about the new things in medicine—because you can’t take time out to go yourself. And you’ll quit investigation and research; and because you work so hard, you’ll be tired at night, and you won’t feel like reading textbooks. And then suddenly, one day, you’ll find everything you knew is out of date. That’s when it’s too late to change.”
Emotion-charged, the voice faltered. Pearson put a hand on Coleman’s arm. He said imploringly, “Listen to an old man who’s been through it all, who made the mistake of falling behind. Don’t let it happen to you! Lock yourself in a closet if you have to! Get away from the phone and the files and paper, and read and learn and listen and keep up to date! Then they can never touch you, never say, ‘He’s finished, all washed up; he belongs to yesterday.’ Because you’ll know as much as they do—and more. Because you’ll have experience to go with it . . .”
The voice trailed off and Pearson turned away.
“I shall try to remember,” Coleman said. He added gently, “I’ll come with you to the door.”
They climbed the stairs from Pathology, and on the hospital’s main floor the bustle of early-evening activity was just beginning. A nurse passed them hurriedly; she carried a diet tray, her starched uniform swishing. They moved aside to let a wheel chair by; in it was a middle-aged man, one leg in a cast, holding a pair of crutches like oars withdrawn into a boat. A trio of student nurses went past laughing. A Women’s Auxiliary worker propelled a cart with magazines. A man clutching a bouquet of flowers headed for the elevators. Somewhere out of sight a child was crying. It was the hospital world: a living organism, a mirror of the greater world outside.
Pearson was looking around him. Coleman thought: Thirty-two years, and he’s seeing it all, perhaps for the last time. He wondered: How will it be when my own time comes? Shall I remember this moment thirty years from now? Will I understand it better then?
On the public-address system a voice announced, “Dr. David Coleman. Dr. Coleman to the surgical floor.”
“It’s started,” Pearson said. “It’ll be a frozen section—you’d better go.” He held out his hand. “Good luck.”
Coleman found it hard to speak. “Thank you,” he said.
The old man nodded and turned away.
“Good night, Dr. Pearson.” It was one of the senior nurses.
“Good night,” Pearson said. Then, on the way out, he stopped under a “No Smoking” sign to light a cigar.
The Economics of Happiness
Bruno S. Frey and Alois Stutzer
Economists’ reluctance and a new development
Everyone wants to be happy. There are few goals in life shared by so many people. Economic activity—the production of goods and services—is certainly not an end in itself but only has value in so far as it contributes to human happiness.
But, surprisingly enough, economists have long left the study of happiness to other disciplines, especially psychology. True, when the science of economics was founded by the classics, it was taken for granted that happiness can be measured and used to determine whether a particular economic policy raises or lowers the happiness of the people affected. Thus, Jeremy Bentham assumed that utility reflects pleasures and pains, and Isidor Edgeworth was confident that happiness can be measured by a ‘hedonometer’ (though he was not able to come up with a practical procedure). The situation changed dramatically with the advent of what was then called the ‘New’ Welfare Economics. In the 1930s, scholars such as John R. Hicks demonstrated that human behaviour, and in particular the demand for commodities, can be explained on the basis of relative (ordinal) utility. No absolute (cardinal) measurement of utility is needed to analyse how individuals react to changes in relative prices. Welfare judgements can be made by resorting to the Pareto criterion and therefore no comparison of welfare levels among individuals is required. This change in thinking greatly simplified economic analysis, while still yielding considerable insights. The success of extending the analysis to related but still separate areas, for example politics, the family or crime, is at least partly due to this revolution.
Today, however, we are witnessing yet another dramatic change in economists’ thinking. Due to extensive work by numerous psychologists spanning many decades, the measurement of utility has made great progress. It is now possible to approximate individual utility in a satisfactory way using representative surveys. With the help of a single question, or several questions on global self-reports, it is possible to get indications of individuals’ evaluation of their life satisfaction or happiness. Behind the score indicated by a person lies a cognitive assessment of to what extent their overall quality of life is judged in a favourable way (Veenhoven, 1993). The measures of subjective well-being or, in short, happiness, prove to be consistent and reliable. Happy people are, for example, more often smiling during social interactions, and are rated as happy by friends and family members, as well as by spouses. Reported subjective well-being is moderately stable and sensitive to changing life circumstances (see e.g. Diener et al., 1999). This progress in measurement allows for the analysisof a paradoxical observation made many years ago by Easterlin (1974). Since World War II, real income in several countries has dramatically risen, but the self-reported subjective well-being of the population has not increased, or has even fallen slightly. In the US, for example, between 1946 and 1991, per capita real income rose by a factor of 2.5 (from approximately $11,000 to $27,000), but over the same period happiness remained, on average, constant. Another paradox requiring explanation is that, since time immemorial, work has been considered a burden on individuals, but empirical research on happiness clearly suggests that being unemployed, even when receiving the same income as when employed, depresses people’s well-being noticeably.
Many happiness research findings add new knowledge to what have now become standard views. One is the consistently strong influence of non-financial variables on self-reported satisfaction with life. This does not mean that economic factors, such as employment, income or price stability, are unimportant, but they suggest that the recent interest in issues such as social capital, loyalty, civic virtue or intrinsic motivation,3 is well taken. The findings also enrich our knowledge on discrimination concerning gender, ethnicity, race and age.
There are other reasons for economists to be interested in happiness. One is economic policy. It is often impossible to make a proposal for a Pareto improvement, because social action entails costs for some individuals. Hence, an evaluation of the net effects in terms of individual utilities is needed. Economic policy must also have quantitative evidence on trade-offs, especially those between unemployment and inflation. Another reason why happiness is of interest to economists is the effect of institutional conditions, such as the quality of governance and the size of social capital, on individual well-being.
Happiness functions seek to establish an econometric relationship between the happiness measure and the determinants of happiness. The happiness data are derived from, for example, the Eurobarometer Surveys, which ask the question: “On the whole, are you satisfied, fairly satisfied, not very satisfied or not at all satisfied with the life you lead?” This yields a four-point scale of satisfaction with life. The US General Social Surveys ask the question: “Taken all together, how would you say things are these days—would you say that you are very happy, pretty happy, or not too happy?” This yields a three-point scale of happiness.
Happiness depends on three sets of factors:
• Demographic and personality factors, such as age, gender and family circumstances, as well as nationality, education and health
• Economic factors, in particular unemployment, income, and inflation
• Political factors such as the extent of possibilities for citizens to participate in politics, and the degree of governmental decentralisation.
Happiness functions have been estimated with aggregate as well as with individual data. Recently, panel data have increasingly been used, i.e. the same individuals are re-surveyed over time. As the dependent variable is a scaled index, normally weighted ordered logit or probit estimation techniques have been applied. The following estimation results presented are always the partial effects of the variable in question on happiness, i.e. the influence of all other variables in the simultaneously estimated equation is controlled for.
This paper endeavours to provide an impression of this new, and possibly revolutionary, development in economics. No comprehensive survey is intended (this is undertaken in Frey and Stutzer, 2002). Rather, the most important findings are presented, especially those that put generally accepted knowledge into doubt. The next parts deal with three major factors of happiness: socio-demographic (section 2); economic (section 3); and institutional factors (section 4). Section 5 offers conclusions.