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Measuring Cost-Effectiveness in Terms of Happiness

This chapter demonstrates that policy analysis should be based on happiness as the measure of benefit (except where traditional methods actually work). It argues that this should be generally applied throughout the public services and by nongovernment organizations (NGOs). The chapter offers four key proposals. The first is that the goal of governments should be to increase the happiness of the people and, especially, to reduce misery. Where willingness to pay is not a feasible measure of benefit, governments should develop new methods of policy analysis based on point-years of happiness as the measure of benefit. All policy change should be evaluated through controlled experiments in which the impact on happiness is routinely measured. A major objective of social science (and of its funders) should be to throw light on the causes of happiness, and how it can be enhanced—and at what cost.