It was the Scottish essayist, Thomas Carlyle, who in 1849 dubbed economics the "dismal science".
And not just a dismal science, but "a dreary, desolate and, indeed, quite abject and distressing one."
But history is on the side of the economists.
Carlyle was, after all, writing in support of slavery at the time, a practice which most economists vehemently opposed.
In truth, economics has much to teach us about the pursuit of "utility" or happiness, the subject of this week's episode of the It All Adds Up podcast.
The past decade has seen an explosion in economic research designed to uncover what truly makes us happy.
While scientists attach electrodes to measure pleasure and pain, economists conduct their research with statistics and surveys.
Their results are strikingly consistent and can be roughly distilled into the following economic recipe for happiness.
1. HAVE A HIGH INCOME
It's the age-old question: can money buy happiness? And the answer is increasingly being resolved in the affirmative.
In the mid 1970s, an American economist, Richard Easterlin, corralled evidence which appeared to show a plateau in personal happiness, or wellbeing, beyond a certain income level. This was true, supposedly, for both countries and individuals.
But the weight of statistical evidence since then has cast this into doubt. In 2010, a paper by Daniel Kahneman and Angus Deaton found that while "emotional wellbeing" – feelings of joy, stress, sadness, anger and affection – plateaued after a certain income – about $US75,000, the wellbeing associated with "life satisfaction" continued to rise with more income.
"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being."
International comparisons of country's average self-reported life satisfaction also consistently show higher income countries clustered at the top of the rankings.
The Australian Unity Wellbeing Index shows a clear correlation between higher income and higher wellbeing.
It asks Australians to rate out of 100 their wellbeing across a number of areas, including health and relationships, to yield an average result.
On average, people earning over $100,000 a year give themselves a wellbeing score 4 points higher than those earning below $100,000.
"There is no denying that income and wellbeing are linked," the 2015 "What makes us happy" report concludes.
However, it is also true that a dollar going to a poor person does much more to boost their wellbeing than a dollar going to a person already on high income.
Indeed, it takes an extra $18,750 a year to earn an extra wellbeing point for someone in a household earning between $15,000 to $30,000. But it takes an extra $147,000 to move someone in a household already earning between $150,000 and $250,000 up an extra wellbeing point.
2. BE IN CONTROL OF YOUR FINANCES
Earning a high income is certainly helpful for wellbeing, but the research also shows that being in control of your finances is what really counts.
In fact, having a sense of "financial control" – not having a high income – is one of the three points of the "golden triangle of happiness", according to the Australian Unity survey.
"The power of money to affect wellbeing lies in its capacity to alleviate stress and create an environment for happiness. Accordingly, people can achieve normal levels of wellbeing even with low income, so long as they feel in control of how they spend it."
According to the index, a person on an annual income of less than $100,000 who nonetheless rates themselves as eight – or higher – out of 10 for being in control of their finances, has a higher level of overall wellbeing than someone earning more than $100,000 but who rates themselves at five – or below – out of 10 in terms of financial control.
Indeed, according to the World Happiness Report, "freedom to make your own decisions" is one of the most powerful drivers of wellbeing. Of the top 10 happiest nations, 93 per cent of citizens say they have sufficient freedom to make key life choices, compared to 63 per cent in the bottom 10, according to data from the Gallop World Poll.
3. SPEND MONEY ON EXPERIENCES
In their 2014 book, Happy Money: The Science of Happier Spending, American academics Elizabeth Dunn and Michael Norton, conclude that money can buy happiness. But only if you spend it the right way.
"The typical ways we spend our money don't pay off in much happiness," Dr Norton told a recent conference in Sydney. "But there are other ways to use our money that do pay off. If you think money can't buy happiness, it just means you're not spending it right."
One of their top tips to boost happiness is to spend money on experiences, like holidays, as opposed to material items.
Experiences can yield happiness from the anticipation, from the actual event, and from enjoying memories, whereas items purchased tend to deteriorate over time.
Spending money on experiences is one of the ways to boost happiness. Photo: Kristjan Porm
4. BUY YOURSELF TIME
Economists have long talked about the trade-off between income and leisure, or the "labour-leisure choice".
We derive utility, or happiness, from both consumption and from leisure time. To maximise your happiness, you must decide what unique combination of income and leisure suits you. If you desire a lot of consumption, you will have less time for leisure because of all the extra work you must do to fund that consumption.
Instead of working less, individuals can also use some of their income to purchase leisure time by outsourcing household tasks, like cleaning or gardening.
5. SPEND MONEY ON OTHERS
In a social experiment conducted in Canada, Dunn and Norton told one group of people to spend money on themselves, and a second group to spend the same money on others.
At the beginning and end of the day, they asked participants to rate their happiness out of 10. People who spent money on themselves gave themselves the same happiness rating at the start and end of the day.
But according to Norton: "People who we gave money to spend on somebody else, those people, if they were a seven in the morning, they're kind of like an eight now. It doesn't make them the happiest person in the world, but it does have consistently, in experiment after experiment, a positive effect on your happiness to spend on somebody else.
When they repeated the experiment in Uganda, the result was the same: spending on others boosts personal happiness more than spending the same sum on yourself.
6. NURTURE STRONG RELATIONSHIPS
Because, of course, money can't buy everything. And the Beatles were right: money can't buy you love.
Which is a shame, because according to the findings of the Australian Unity Wellbeing Index: "Being part of an intimate relationship is perhaps the most vital component of wellbeing."
Married Australians have the highest wellbeing scores, followed by those in defacto relationships. Australians who are separated, divorced or who have never married, experience below average wellbeing scores (although this varies by age and older widows and younger singles are happier).
But relationships don't have to be romantic to boost wellbeing, according to the What Makes Us Happy report: "A good close relationship (or many good relationships) with someone you can share your thoughts, secrets, hopes, dreams and fears with, who will remind you that you are loved and valued, provides a critical resource to defend against life's challenges. Those who don't have this intimate relationship are at much higher risk of the difficulties in life overwhelming them."
Other surveys confirm the importance of relationships on wellbeing.
Surveys confirm the importance of relationships on wellbeing.
The Gallup World Poll asks respondents around the world: "If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?"
In the world's 10 happiest countries, 94 per cent say they have someone to count on, compared to just 58 per cent in the bottom 10 countries.
According to the OECD'S Better Life Index, Australia ranks second only to Norway on a composite of indicators of wellbeing. One of Australia's stand out features is this strength of our close relationships.
Fully 95 per cent of Australians believe they know someone they could rely on in time of need – significantly higher than the OECD average of 88 per cent.
7. HAVE A SENSE OF PURPOSE
But when relationships fail and money is tight, there is something we can all fall back on.
In his 1946 book, Man's Search for Meaning, Auschwitz survivor Viktor Frankl wrote about how happiness ultimately comes down not to avoiding pain or seeking pleasure, but through identifying a purpose and meaning in life and pursuing it.
"Those who have a 'why' to live, can bear with almost any 'how'," he wrote.
Indeed, having a sense of purpose is the third point on the golden triangle of happiness. "It is imperative for personal wellbeing to be doing something that provides meaning in life ... For some this may be their job, but the job has to provide more than just financial security. For others it may be a social activity such as being in the local tennis club or Rotary. Or it may be volunteering as a lifesaver, caring for someone or doing or something as simple as gardening."
In this week's It All Adds Up podcast, "The dismal science's secrets to happiness," Economics Editor, Ross Gittins, concludes much the same:
"I use the word happiness, but if you drill down it's really about satisfying lives. And satisfying lives is not about being selfish and only going for a hedonistic existence."
Not such a dismal science, after all.
To hear more, subscribe to "It All Adds Up" wherever you get your podcasts or via iTunes here.
We'd love to hear your thoughts. Email us at italladdsup@fairfaxmedia.com.au.
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