I think Kahneman and I are probably talking about something similar, but I am hesitant to refer to both as happiness. I think it leads to misunderstanding, since the two are related but conceptually distinct. As an aside, have you read Bertrand Russell's The Conquest of Happiness? Its a pretty fascinating rumination on the subject from one of the best philosophers of the 20th c. Its enlightening, too, because we tend to talk about collective lack of happiness as a modern societal phenomenon, and when he wrote the essay in the 30s, that's also how people talked about it, illustrating just how miserable people have been since the dawn of time.
HA! That made me laugh. Yes, I hate when people romanticize the past and believe that we have somehow become less happy, and that we would be better off retreating into the forest. I have not read as much Bertrand Russell as I should have by this point. That is definitely a big gap in my library that must be remedied soon. I'll check out The Conquest of Happiness, since I've been interested in the topic for a while now.
Conquest of Happiness is a good place to get acquainted with Russell, because its a pretty light read, but characteristic of his style, nonetheless. You can read it in a couple evenings, unlike some of his mathematical and philosophical writings that require a lot deeper attention.