Tuesday, April 15, 2008

What do subjective measures tell us about human flourishing?

What do subjective measures of well-being tell us about the relationships between freedom and flourishing?

A recent review of happiness research, conducted by Will Wilkinson, suggests that a great deal of caution is required in drawing any conclusions from subjective measures of well-being (In pursuit of happiness research, Is it reliable? What does it imply for policy?). There is disagreement about what researchers should be trying to measure and about the limitations of current measurement techniques.

Even if subjective measures can be accepted at face value there are problems in interpreting what they mean. The nature of these problems is shown in reactions to the observation that subjective indicators of well-being, such as satisfaction with life as a whole, show only small increases in response to rising incomes in wealthy countries. Some observers have suggested that this makes economic growth akin to chasing a mirage. As incomes rise people adapt to higher incomes and their aspirations rise. In his book, "Happiness" (2005), Richard Layard suggests that rising aspirations reflect a problem of addiction which justifies high levels of taxation.

Others (including me) have suggested that rising aspirations reflect the innate capability of humans to avoid chasing mirages – that is, to be satisfied with outcomes that are technologically feasible. Economic growth reflects technological progress and the extent to which the institutional environment facilitates related productivity improvements.

In his review of happiness research Will Wilkinson notes that several studies have found that economic freedom makes an important contribution to levels of subjective well-being. A recent study by Tomi Ovaska and Ryo Takashima found that economic freedom was statistically significant and that the relationship between economic freedom and well-being was more robust than that between per capita income and subjective well-being. The authors conclude:
“The results suggest that people unmistakably care about the degree to which the society where they live provides them opportunities and the freedom to undertake new projects, and make choices based on one's personal preferences” (‘Economic policy and the level of self-perceived well-being: an international comparison’, Journal of Socio-Economics, 35(2), 2006).

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