Abstract
AbstractThe failure of higher private consumption to increase happiness significantly due to environmental disruption, relative competition, adaptation, our materialistic bias, etc. are relevant for public policy, especially in making higher public spending in the right areas like environmental protection, research, poverty elimination, etc. more welfare-improving than a ‘big society, small government’. Some soft paternalistic measures such as nudging people to save adequately for old age may also be needed in the widespread presence of imperfect rationality and foresight.