15 Measuring Cost-
Effectiveness in Terms
of Happiness
I am afraid there’s no money.— Liam Byrne in a note to his successor at the UK Treasury (2010)So, with all this knowledge, how are policy makers to pro-
ceed? The answer is the same whether they run the Ministry
of Finance or the smallest NGO: there are four steps.
- First, be absolutely clear that human happiness is
the goal of your organization. Build it into its DNA,
and hire people who understand it. - Second, review the evidence on what produces
happiness (and what doesn’t) and identify areas
relevant to your organization where new policies
might make a real difference. - Third, design specific policy changes and then con-
duct proper controlled trials of their effects. In
many cases the trials will have to be relatively brief,
showing only the short- run impact of the new
policy. But then you can estimate the longer- term
effects by using models (from this book or else-
where) showing the longer- term effects of short-
run changes. Simulation of this kind will often be
needed.