CONSTRUCTION OF HAPPINESS INDICES: A WAY TO EXPLAIN SUBJECTIVITY OF HAPPINESS

Abstract

Economists have learned not to quantify utility in a direct way, rather to confirm it from behavioural manifestation and that manifestation based on what one perceived from his/her life circumstances. The attitudes of individuals indicate whether they are happy with what they have, for example, with their lives and families. But to interpret happiness in one word or through one phrase can make it more ambiguous. So, in this study we have included several variables that contribute one’s overall level of happiness that was not being included in the previous studies. The happiness constructed in this study through principal component analysis for further empirical analysis. The economics of happiness is one of the emerging areas that not only thriving into economic policy but also for socio economic policies. In this analysis we have explored maximum possible variable that may contribute to one’s happiness not at individual’s levels but also at country’s level. From these variables we have constructed ten happiness indices: family happiness, neighbour happiness, environmental happiness, gender happiness, patriotism happiness, political happiness, religious happiness, life satisfaction and freedom of choice happiness.

Key words: Happiness, economic policy, principal component analysis, variables.