Will David Cameron’s happiness survey have any policy relevance?

Years ago David Cameron bought into the great cliche of happiness researchers, pronouncing that ‘it’s time we focused not just on GDP, but on GWB—general wellbeing’. Now as Prime Minister he’s getting Britain’s statistical agency to ask people questions about their well-being and life goals.

As a dabbler in happiness research I like more data, and there is probably room for a bit more on the relationships between life goals and happiness. But I remain very sceptical that this kind of work can produce anything that is useful from a policy perspective, as opposed to just interesting from a social science perspective.

The whole belief that Western countries can achieve sustained and non-trivial changes in their self-reported well-being seems, with one intriguing exception, to be inconsistent with the masses of post-WW2 research into this topic. Despite the huge changes in that time period – including policy change, social change, economic change and technological change – the self-reported happiness or life satisfaction of most countries seems to fluctuate without major long term trends.

The Eurobarometer life satisfaction question below suggests that this this is true of Europe, with Denmark the interesting exception (apparently the start of it coincided with a soccer victory). Continue reading “Will David Cameron’s happiness survey have any policy relevance?”

Hayekian vs Keynesian happiness

Posting has been very light this last week because I have been at the Sydney meeting of the Mont Pelerin Society, an international (36 countries represented at this meeting) organisation of classical liberals started by Hayek and Friedman in the late 1940s.

I was a discussant on Jason Potts‘ paper on happiness economics. Jason’s paper was on an aspect of what I see as the conflict between the classical liberal and social democratic views on happiness research.

Social democrats (eg Richard Layard) look for statistical associations between happiness levels and social or economic conditions, with the hope that by manipulating those conditions they can increase happiness. In Jason’s perspective, this is happiness Keynesianism – a confidence in the ability of government to identify and manipulate macro social and economic indicators to maximise gross national happiness.

Jason took what might be called a Hayekian view of happiness – that knowledge of what makes people happy in specific social circumstances is highly decentralised. We receive information from our own feelings and from observing those around us – information not readily available to the happiness central planners. Adaptation of attitudes and behaviour at this micro level is the key to achieving individual happiness. Continue reading “Hayekian vs Keynesian happiness”

Money as the cure for materialism?

Ever since it became possible for humans to acquire more wealth than was needed for survival social critics have been warning against its corrupting effects. These days the warning even comes with some evidence, as Sacha Molitorisz notes in last weekend’s papers. During the week there was another paper, this time by U of M academic Bruce Headey and others, showing that material with materialistic goals are less happy.

Headey’s work has been particularly important because it uses longitudinal studies, in this case a German study, to see long-term effects. He’s particularly concerned with challenging the setpoint theory of happiness, that people have a ‘natural’ level of happiness linked strongly to their personality type, and that few people will move beyond their setpoint for prolonged periods of time.

The figure below, taken from the article in the second link, shows that using 5-year averages of life satisfaction and comparing it with successive 5 year periods from 1984-89 to 2004-08 that substantial minorities do undergo significant long-term changes in their self-reported well-being. Continue reading “Money as the cure for materialism?”

Money and the emotions

Most happiness research is based on questions which ask respondents about how happy they are or how satisfied they are with their lives in general. A number of papers over the years have explored the links between these overall ratings and people’s day-to-day emotional states and found that (at least in the survey period) there are only modest correlations between them.

The most recent paper, by Daniel Kahneman and Angus Deaton, using a massive 450,000 person US sample over 2008-09 (bad years economically in the US), again finds that the statistical relationship isn’t strong.

They used three measures of daily emotional well-being: positive affect (reports of happiness, enjoyment and frequent smiling), blue affect (reports of worry and sadness) and stress the day before the survey. The life satisfaction question asked respondents to rate their lives from 0, worst possible life, to 10, best possible life. None of the correlations between emotional well-being and life satisfaction were higher than .31 (0 would be no relationship, 1 would be a complete association). Continue reading “Money and the emotions”

Labor voters cheer up

Happiness research always finds that right-wing people are happier than left-wing people. And so it was again in the Australian Survey of Social Attitudes 2009.

Questions: If you were to consider your life in general these days, how happy or unhappy would you say you are, on the whole …
Generally speaking, do you usually think of yourself as Labor, Liberal, National or what?

But as you can see in the figure, Labor identifiers have cheered up compared to the 2007 AuSSA, which was mostly carried out during the last months of the Howard government. The ‘very happy’ happiness gap has halved from a Coalition lead of 12% in 2007 to 6% in 2009. The proportion of very happy Coalition identifiers has dropped by only one percentage point, so the explanation is happier Labor supporters rather than less happy Coalition supporters.

Are your uni days the best of your life?

The SMH yesterday wrote up this report which, as many other analyses have, finds graduates are not happier than other people (though the research is mixed on this; some studies do find a benefit, and in the 2007 Australian Survey of Social Attitudes sample graduates are happier).

Education and happiness in the school-to-work transition by Curtin University’s Michael Dockery is especially interesting on the question of graduates and happiness because it uses the the Longitudinal Surveys of Australian Youth (LSAY), which tracks the same individuals over time. They start when the respondents are in Year 9 and finish when they are in their mid-20s. This lets us see happiness over time and the possible effects of changing circumstances.

Happiness relative to mean, by educational attainment

Source: Figure 2(b) in Education and happiness in the school-to-work transition, published by NCVER

What this shows is that people who will eventually get undergraduate degrees start out with above average happiness and end up with slightly below average happiness. People who will eventually get postgraduate degrees are the happiest in 1997, but only average in 2006. By contrast, those who destined for lower qualifications are relatively unhappy in 1997 but happier (relatively, and in asbolute terms) in 2006.

Continue reading “Are your uni days the best of your life?”

Recessions not good for happiness (but not that bad either)

Anti-prosperity thinkers have long pointed to flat levels of happiness as proof that more income doesn’t make us happier. The more adventurous, such as Clive Hamilton, use this as part of their argument for cutting economic growth. Last year I reported Barry Schwartz’s argument that the US recession may have a positive effect on happiness as people realise that they don’t need the latest in consumer goods.

I take the view that while voluntary downshifting can be good for happiness, recessions are bad for subjective well-being (though because believing that your standard of living is going to improve in future is generally good for happiness, happiness is likely to recover more quickly than the economy).

Some US evidence on the happiness effects of their recession is starting to be published. Since 1972 the General Social Survey has asked its respondents ‘taken all together, how would you say things are these days would you say that you are very happy, pretty happy, or not too happy?. In 2008 13.9% of Americans said they were ‘not too happy’, the second highest number ever recorded (the worst was 17.2% in 1972). ‘Very happy’ was on 31.7%, the worst result since 1994 and equal fourth worst. Continue reading “Recessions not good for happiness (but not that bad either)”

Defending GDP

Of all the statistics produced by the ABS, GDP stirs the strangest reactions. In Fairfax papers over the weekend, Don Edgar tells us that:

Gross domestic product has failed as an indicator of either national progress or individual happiness.

That’s quite probably because it is not a measure of national progress or individual happiness. It measures the value of goods and services produced over a particular time period. Pointing out, as Edgar does, that ‘GDP goes up with increased spending on crime, natural disasters’ is true but a silly criticism. We would be better off if crime and natural disasters did not occur, but spending on them usually leaves us better off than we would be if we did nothing (the ‘gross’ is intended to explain that no account is taken of capital depreciation, or destruction in the case of crime and natural disasters).

GDP clearly cannot be taken as equivalent to national progress or individual happiness. But one reason that it is a very useful statistic is, as Will Wilkinson points out, that it correlates with other statistics that get closer to progress, such as levels of health and education. Continue reading “Defending GDP”

Off the happy planet

Yesterday the SMH gave some publicity to the latest version of the so-called Happy Planet Index, another of those dubious indexes that combines incommensurable things – in this case a nation’s life expectancy, life satisfaction, and ‘ecological footprint’ – into a single number.

According to the SMH article,

The results turn our idea of progress on its head,” the report said.

“It shows that a good life is possible without costing the earth.”

Alas, not only is the methodology dubious but the results don’t support the conclusion reached. They show how hard it is to achieve life satisfaction on low levels of consumption (as measured by the ‘ecological footprint’). Only a dozen of the top 50 ranked countries achieve ‘normal’ 7+ (out of 10) life satisfaction ratings. And all but three of these twelve are in Latin America, which repeatedly scores much better on life satisfaction and happiness scores than other places with comparable economic, political and social development. You can be poor and happy, but only in one part of the world.

Several countries in the top 50, including Bangladesh, Nepal, Armenia and Yemen, score below 5.5, suggesting that much of the population in these countries is very unhappy. That the ‘planet’ might be happy at the low levels of consumption in these places is not likely to be much consolation.

Will Wilkinson isn’t impressed either.