HNG01 | ECON1588 Diverse Perspectives on the World Economy | Lecturer: Ha Thi Cam Van

HAPPINESS
Ma Anh Vu - s3892040
Trieu Tien Thanh - s3894298
TEAM 5 Pham Tran Phuong Nhi - s3892630
Dao Mai Anh - s3817957
Nguyen Tri Duc - s3878489
Table of
Content
• Overview
• Causes and impacts
• School of thoughs
• Recommended policies
• Conclusion
 WHAT IS
HAPPINESS?
 Definition
• Happiness is synonymous with "subjective well-
being," which is often assessed by questioning
individuals about their level of life satisfaction
(evaluative), the amount of happy and negative
emotions they regularly experience (affective), and
their feeling of meaning and purpose (eudaimonic)
(Lee 2019).
• Economists have long regarded happiness as
"unscientific" term.
• In the last decade, there has been a shift in popular
interest in happiness.
• It is increasingly seen as a significant and
overriding purpose of public policy by
policymakers across the globe (WHR 2022).
 The Happiness Index is a comprehensive survey
instrument that assesses happiness, wellbeing, and
aspects of sustainability and resilience (Musikanski et
al. 2017).

Happiness Index

Figure 1: 13 main happiness domain

 Vietnam (77th)
Compared to 2020, Vietnam has
increased its status in two ranks
(UNDP 2021). This is because the
government has applied efficient
policies, including social support

Happiness in package, freedom of speech.

Asia Israel (9th)

Israel got used to scoring high
Afghanistan (146th)
War-traumatized Afghanistan's
in the World Happiness humanitarian catastrophe has
Report when it comes to GDP worsened since the Taliban
per capita, life expectancy, retook control in August,
and social support (UNDP placing it to be the unhappiest
2021). country in the world (UN News
2022).
CAUSES &
IMPACTS
 Why there exists
different index
between countries?
The reasons of happiness are nearly identical in different
countries, with the distinctions (if any) consisting in each
nation's traditions, culture, economic condition, regional and
geographical features (Torshizian and Mehrara 2011).
 Causes
GDP per capita
• Vietnam's GDP per capita growth is
impressive among all countries (DePietro
2022).
Social support
• Public services, education universalization,
and people's intellectual improvement (L.M
2021).
Healthy longevity
• Average life expectancy increases fastest in
the world: 75.5 years old (L.M 2021).
Political institutions
• Vietnam stands in a neutral position in world
affairs, so it is less affected by the harsh
political moves of global factions.

A fulfilling family life with marriage, children,

and harmony with relatives (Glenn and Weaver
1981).
 Impacts
Improve Health Enhance productivity

Improve relationship quality

• Close relationships are

consistently correlated
with happiness (Chandra
and Yadav 2015).

• Positive energy creates • Happiness made people

incentives to do more exercise around 12% more productive
(Louis 2021). (University of Warwick 2022).
• Helps stave off high blood • Happy employees pay more
pressure and excess body fat, attention and alert of the
resulting lower chance to company’s processes and
suffer mental problems (Heart systems (Ainomugisha n.d.).
2020).
SCHOOL OF THOUGHTS
Neo-Classical | Behavioural | Buddhism
 Overview
Neoclassical Economists proposed a materialistic
view towards happiness by evaluating an
individual's subjective well-being by considering
the amount of good and service consumed.

(Wolff and Resnick 2012)

Central Belief
• Growth is always good
Neoclassical • Utility and subjective well-being are

Economics interchangeable
• The concepts of human beings are
simplified and compressed into income-
constrained, rational consumers and
utility maximizers.

(Anielski and Samalavičius 2012)

 Hypothetical correlation between income and
happiness
• Neoclassical economic views suggest that
more money would result in more
consumption, leading to higher level of
happiness (Trumpy 2008).
• Rising level of income enables individuals
to obtain their essential needs and wants.
→ Having positive impact on one's well-being

Related examples:
• Improving shelters increase the sense of
security.
• More tax revenues lead to better public Figure 2: Vietnam's GDP per capita and
Happiness Index from 2016-2021 (The World
goods.
Bank; The World Happiness Report)
• More money to spend on therapy sessions
and antidepressants.
 The limitations of
Neoclassical view
Figure 3:
• There is a positive relationship between The
Easterlin
income and happiness.
Paradox
• However, once the income has reached a curve
certain point, happiness fails to generate the
same value as before.
→ Diminishing marginal utility of income
(Emptor and Easterlin 2005)

• Other measures of well-being such as suicide

have been found uncorrelated with income
(Burnham and Phelan 2020).
• The level of happiness in the U.S remained
unchanged during 1971-2001 despite the
approximate double in GPD per capita
(Easterlin and Angelescu 2011).
 Recommendation for the
development of happiness
• In the Neoclassical view, governments have
positive impacts on their citizens' life
satisfaction.
• The government is considered a "benevolent
dictator" and its involvement is essential to an
individual's quality of life (Bjørnskov et al.
2006).
• Government interventions and tax systems
should be optimized to support individuals
maximizing their utility (Trumpy 2008).

→ Economic growth moderately improves one's

well-being, but externalities brought along need to
be corrected
• Pollution caused by industrial activities
• Inequal distribution of income
• Mental illnesses
 The Prospect Theory

Behavioral economics believe that level of

happiness is determined by the losses and gains
relative to specific "reference points".

(Burnham and Phelan 2020)

Comparison

Behavioral • Personal material payoffs still determine

well-being
Economics • However, there are other factors which can
be used to reason the Easterlin paradox.
• These factors include actions and payoffs
for others.
 Buddihism
• The reduction of pain and suffering.
• The prosperity of the
mind/Understand. things by its nature
- Panna-nism.
• Basic needs are moderately required.
• Health care and education.
• Minimum environmental degradation.

(E.F.Schumacher 1973; Kiado 2007)

 Consumption
• Panna-nism
• Reject maximum utility.
• Moderate consumption.
• Good deeds: donations, help others.
(Kiado 2007)

Production
• Panna-nism
• Sila - Samadhi - Sikkattaya - Panna
• Good deeds to formulate the economy.
• Enhance quality of human inputs/Reject
exploitation.
• Minimum non-renewable resources/waste.
(Kiado 2007)
 Distribution
• Panna-nism
• Distribute fairly and help those in needs.
• Pain/suffering reduction
• More brain = More value => Labor-
intesive unwise.
• Waste needs to be taken into
consideration.

(Kiado 2007)
Policies for the developmet of Buddhism
Happiness
 POLICIES &
RECCOMENDATIO
NS
 Vietnam's Real
1 Policies 2 3

Social Support Public Health Care Income inequality

 Social
Support
• Vietnam spends 1.2% of its GDP on
social assistance (Tradingeconomics
2022).
• Provide average VND 600,000 monthly
social benefit for disadvantaged citizens
(NTH 2021).
• Nearly 1 million social housing will be
released in the next 5 years (Anh 2022).

Figure 4: Vietnam Government Spending

 Public Figure 5:
Vietnam's
Government

Healthcare
spending on
healthcare
(Macrotrends
2023)
• Vietnam's government spending on
healthcare is leading in SEA at 5.5% of
GDP however much lower from the global Figure :

average of 9% (Alpuerto 2022).

• 91.1% of the population have the access to Figure 6:
National Health Insurance (Nhandan Vietnam's Life
Expectancy
2022).
(Macrotrends
• Vietnam's Life Expectancy ranks 84th at 2023)
75.77 (Macrotrends 2023).
 Vietnam
• Vietnam has a low unemployment rate at 2.2% and ranks 7th in
Asia's unemployment rate (Tradingeconomics n.d).
• In Vietnam, the Gini coefficient based on income per capita has
an average value of about 37.8%, in the low-income inequality
(<40%).
• However, it is still higher than the Gini coefficient of many
countries with much higher GDP per capita than Vietnam such
as the UK, and Romania. (Nguyen 2021) .

<=
Income >
Singapore
• Singapore's government had large income

Inequality inequality gaps as in Asia, Singapore placed second

on the list (Cho n.d.).
• Singapore does not have a minimum wage and
poverty line
• In 2020, the government published tax policies that
bring income inequality in Singapore to a historic
low (Min 2021).
 Reccomendations
• Increase Government Spending for public
sector
• Invest strongly on social housing process
• Work-study Dual System

• Large Government Spending on Public Sector

(WHR 2020)
• Welfare services and policies (WHR 2020)
• Free/Partly Healthcare
• Free Education and focus on student wellbeing
• Tax reduction policy to decrease income inequality
(WHR 2020)
Thank
You!
 References
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