Economists who study subjective well-being use the methodological and empirical tools of economics to understand how material welfare along with other life factors affect measures of people's self-reported happiness. How should we measure an individual's subjective level of happiness, and how should we incorporate a variety of these self-reported measures into common economic models of utility maximization and policy evaluation? In this course, we will explore the complicated relationships between traditional economic indicators and measures of subjective well-being in order to more fully understand, as economists, what makes people happy. Some key questions we will explore are: How do/should we measure happiness? Can money buy happiness? What does the research on psychological phenomena and behavioral quirks imply for our happiness goals as economists? What is the relationship between happiness and social capital - like family, friends, and our broader civic environments? How does someone's subjective well-being affect their productivity (and other economic outcomes)? How do cultural factors and differences in politics affect measures of subjective well-being? What effects do physical and mental health have on our day-to-day experiences as well as our overall life satisfaction? The course draws heavily on research in psychology and behavioral economics, and will also introduce students to a wide variety of empirical data on subjective well-being.

Syllabus

Ec 10B continues the curriculum presented in Ec 10A. Starting with the descriptive and ethical frameworks of Ec 10A, Ec 10B moves from the study of microeconomics (individual decision-making and individual markets) to the study of macroeconomics (e.g., the growth of the overall economy, unemployment, and inflation). Ec 10B explains what economists do and do not understand about why per capita income varies so much across countries and what factors determine the rate of aggregate economic growth. Ec 10B also explains why the economy fluctuates, as illustrated by sharp changes in the rate of unemployment, the net rate of job creation, or the rate of overall economic growth. The course also explains how policy makers attempt to manage and dampen these fluctuations using both monetary policy (i.e., government influence over interest rates and government regulation of banks) and fiscal policy (e.g., government control of spending and taxation). We will also discuss how macroeconomic policies work in an international context, including the factors that affect exchange rates, trade deficits, international capital flows, and how these link economies around the world. Like Ec 10A, Ec 10B introduces students to economic models and discusses both how they are supported and how they are contradicted by available data.

Economists study human behavior using a combination of models and data. Ec 10a introduces students to economic models by using intuitive discussions, graphical analysis and, in some cases, a bit of algebra. The models study individual decision-making and markets, and range from classical approaches like supply and demand to more recent approaches that consider informational limitations and behavioral mistakes. We will also use data to understand the strengths and weaknesses of these models. The course discusses the role that ethics and values play in people’s choices and in policy discussions. The ultimate goal of the course is to provide students with a set of tools that will help them develop answers for themselves on how to make better choices and participate in debates on major public policy issues in a wide range of domains such as taxation, inequality, discrimination and the environment.