ABSTRACT
This chapter shows how ideas about happiness and well-being can connect with key insights from behavioural economics to give a whole new picture of what we want and need within modern economies. A wide range of socio-economic decisions will affect an individual’s happiness including marriage, divorce, criminality and addiction, amongst others. Utility is, in essence, about happiness, satisfaction and pleasure. In one sense, hedonic psychology is a modern development of utilitarianism – a moral doctrine, associated with the English economist and philosopher Jeremy Bentham, asserting that actions should be assessed according to their impact on utility, that is, on pleasure, satisfaction and happiness. People will judge their own happiness against a benchmark of what they have experienced in the past. General well-being is the macroeconomic manifestation of general happiness. Well-being is about standards of living and happiness plays a part in well-being but so do other outcomes, for example access to healthcare, educational attainment, longevity, Internet access, and so on.
