Are people becoming happier over time?

We are much richer yet in a survey format Americans do not express greater satisfaction with their lives than they did in times past. What does this mean?

Some individuals suggest that we are pursuing an excess of material goods at the expense of true joys and satisfactions. Arnold Kling offers another interpretation:

Imagine that you could go back a few hundred years and ask people if they are "very happy," "fairly happy," or "not happy." Suppose that this survey showed that happiness was approximately the same back then as it is today. Would it be fair to conclude that the tangible goods that we have today contribute nothing to happiness? People a few hundred years ago had no idea what it was like to live with indoor plumbing, abundant food, and antibiotics. People today have no idea what it was like to live without them. How can a "happiness survey" provide a meaningful comparison of the two eras?

In [Robert] Frank's view, what the surveys show is that consumers have been behaving myopically, striving for more tangible goods without increasing their happiness. An alternative hypothesis is that in answering the surveys the consumers are behaving myopically, reporting on their happiness relative to a near-term baseline. That is, when you ask a consumer in 2004 if she is happy, she instinctively makes a relative comparison to how she remembers 2003. If she could remember how she felt in 1974, and she were focused on that as a baseline, she might answer the question differently.

Happiness research can be used to account for behavioral failures to maximize utility. Most alcoholics are not happy by traditional standards yet they drink of their own volition. So we might use happiness research to suggest a higher tax on alcohol than on vaccines for children. Or happiness research tells us to get the bad news over with, rather than suffering under its expectation. Happiness research is not a suitable tool for making broad comparisons of well-being over long periods of time.

Here is a useful dialogue on happiness research and economics. Here is Bryan Caplan's earlier post on the policy implications of happiness economics.

Addendum: Try living with 1954 technology for a mere ten days, thanks to the ever-excellent GeekPress.com for the lead.