An Attempt to Construct a Happiness Equation from the Perspectives of Financial Cost Theory and Actuarial Mathematics

Abstract

This paper starts with an analysis of the definitions and core logics of two very famous Happiness Equations, and further analyzes their advantages and disadvantages when people apply them in real life. Then, the thesis give some adives for application. Based on these studies, the author presents his two attempts of construction of Hapiness Equation: one comes from a "three-dimension cube" by use financial cost theory; and the other comes form the idea of "total variance minimization" which derived from Actuary Mathematics’ risk perspective. After demonstrate the definitions and logic of the two Happiness Equation, the author present and analysize typical examples. Finally, the pros and cons of the two equations were discussed.