When asked about the “dismal science” and what exactly economists do, most people think they study money. In fact, economists use various analytic tools to predict behavior. But, the public is partially correct because the majority of economists’ predictions deal with financial matters. When economists talk about new houses, for example, their focus is invariably on the factors that determine housing prices, such as mortgage interest rates.

In a recent interview, Rayo discussed their research on happiness as it applies to the purchase of a new house, an enterprise that most buyers find is fraught with emotion. Before you fall off your chair guffawing, insisting that you know happiness when you see it and that some pointy-headed economist couldn’t possibly say anything that would be helpful, listen up. You’re likely to find that much of Rayo and Becker’s research resonates with your own experience. Rayo began our conversation on a philosophical note. “What is happiness, exactly? Much of what we call ‘happiness’ is relative and based on comparison,” he said. “We are always comparing what we have to something else. But, we’re not anticipating that no matter what we have we will always be comparing it to something else. In fact, we’re not even aware that we are doing this.”

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