An increase in the number and ratio of women in decision-making positions in Japan is an important goal. In this connection, the United Nations Development Program (UNDP) created the Gender Empowerment Measure (GEM), a composite index to ascertain gender inequality in three basic dimensions of empowerment: economic participation and decision-making, political participation and decision-making, and power over economic resources. The GEM investigates such indicators as the ratio of women to men in executive positions and legislatures as well as the income gap.
To reflect women’s needs economically and socially, expanding of their participation in decision-making in Japan is not only indispensable and will have great significance in expanding the layer of talented individuals who can support the nation’s aging society and compensate for the loss of working-age population in the country, but also in creating more chances to demonstrate women’s abilities and removing prejudice against them.
Modelers who assess economic impacts of climate change face a dilemma that has been very frankly presented by William Nordhaus (1997): “After 500 years, global average temperature] is projected to increase 6.2 Cover the 1900 global climate. While we have only the foggiest idea of what this would imply in terms of ecological, economic, and social outcomes, it would make most thoughtful people even economists nervous to induce such a large environmental change.
Given the potential for unintended and potentially disastrous consequences, it would be sensible to consider alternative approaches to global warming policies.” It is thus not only outsiders of mainstream economics (e.g., Azar and Schneider, 2003) who question the legitimacy of the very low percent of GDP losses estimated by the published assessments of climate change damages (e.g., Peck and Teisberg, 1992; Nordhaus, 1998; Mendelsohn et al., 2000; Tol, 2002a,b), and the consequently unambitious optimal abatement trajectories prescribed by these studies.
The paper has two main aims: to explain the happiness paradox, and to propose an economic approach which draws from psychology crucial arguments. By the ‘happiness paradox’ is meant a phenomenon that has become apparent in the US and other advanced countries during recent decades. Well-being, as measured by a self-reported rating of one’s happiness, or by other objective indices of mental health, does not improve, or it even deteriorates, whilst income per head, which is the main proxy for material well-being, displays a distinct rising trend. The paradox is reinforced by the fact that people still strive to earn more income by working harder and for longer hours. These facts are paradoxical because economists would expect higher income to mean greater well-being, and that more wealth would enable people to exploit technical progress in order to reduce their working time.
In order to explain the paradox, this paper both adopts the economic approach, which assumes that individuals attempt to maximise their well-being under resources constraints, and draws crucial arguments from social, clinical, and cognitive psychology. This deep integration between economics and psychology can be coined with the term psycho-economics. In this paper, in fact, economics does not simply borrow stylised facts on the human decision process from psychology and use them as starting hypotheses for analysis of the economic consequences, as ‘behavioural economics’ attempts to do. Psychology will also contribute to explanation of the origin of the human decision process, and of the motivations, even outside unconsciousness, that underly it (Pugno 1994). Psycho-economics thus undermines the representation of homo economicus, but it also opens the way for new research that combines depth of understanding with viable prescriptions.
