Thursday, June 11, 2009

Should governments collect subjective well-being data?

The idea of governments collecting data on our subjective well-being might seem slightly Orwellian to many people. It could bring to mind images of officials from the government statistics office knocking at your front door and telling you that they are from the government and they have come to help you by collecting information about what is going on in your mind.

However I don’t think anyone needs to worry a great deal about the implications for their personal liberty of proposals for government collection of subjective well-being data, such as in the recently published book, “Well-being for Public Policy” by Ed Diener, Richard Lucas, Ulrich Schimmack and John Helliwell. As discussed in an earlier post, such data would be unlikely to increase the influence that paternalistic interventionists may have on the policy making process.

The important issue is whether the collection of this additional information is warranted in terms of its potential contribution to discussion of policy issues.

In their concluding chapter the authors ask themselves whether enough is known about subjective well-being for government agencies “to initiate systematic programs for measuring it”. This is how they summarise their reasons for answering “yes”:
“The measures are sufficient to reveal some of the groups in society that are suffering, and they also tell us which groups are thriving. The measures already provide strong clues about the characteristics of nations that lead to the experience of a satisfying life for citizens, along with those that predict the opposite. The measures give clear clues about the activities and circumstances that tend to lead to ill-being and well-being. And when national accounts of well-being are instituted our understanding of these issues will only grow.”

Do we really need systematic programs for collection of information on subjective well-being to tell us about such matters? The measures of subjective well-being generally tend to confirm what we know already from information on incomes and other objective indicators of the quality of life. It seems to me that the important issue is whether collection of more data on subjective well-being would add reliable information that is not available from other sources.

The book discusses the potential contributions of subjective well-being measures in providing new information that could be relevant to discussion of policy issues relating to externalities, non-market goods, taxation, setting fines and compensation for lost welfare. Some specific examples caught my eye. It is possible that information on the extent of misery caused by different diseases could result in better allocation of public funds for medical research (p 134). Some research findings suggest that effects of airport noise on well-being of people in affected areas may currently be under-stated by its effects on residential land values (p 147). Subjective well-being information may help in assessing the value of public facilities such as parks to residents of cities who have access to such facilities (p 155).

The critical issue in considering the contribution that subjective well-being data can make to public discussion is whether this information is reliable (yields consistent results) and valid (actually measures well-being). My assessment of the relevant literature (in my draft paper on Gross National Happiness) is somewhat less optimistic than the view presented in this book. Despite all the noise in this data, however, I think the authors may be correct that enough randomness washes out in large samples to make the responses to single item questions sufficiently reliable for the purpose of creating national indicators (p74). Multiple item questionnaires such as those suggested by Ed Diener and Robert Biswas-Diener to measure “psychological wealth” (in their recent book, “Happiness”) could provide much more reliable information.

I think the authors make a fairly strong case that the surveys are measuring an aspect of well-being although I think it is an over-statement to claim that “the measures behave as they would be expected to behave given widely accepted ideas about what well-being is” (p 93). For example, the measures show a decline in well-being when people have children, despite the widely accepted idea that having children has something to do with well-being.

There is a risk that subjective well-being measures will cloud public discussion of policies rather than shed additional light on relevant issues if they come to be viewed as definitive measures of overall well-being. In interpreting these measures it is important to bear in mind that it is quite possible for people to make rational decisions to sacrifice some of their current satisfaction with life, in order to improve their own future well-being or that of their families.


Juliet Michaelson said...

The National Accounts of Well-being report which we at nef (the new economics foundation) published earlier this year argues that systematic subjective well-being indicators would definitely add reliable and valuable information to what is currently collected by governments. It would measure an outcome - a life which is going well - which is inherently desirable, rather than a collection of essentially arbitrary outcomes which government has chosen to focus on. By collecting information on various components of well-being, such as meaning and engagement, issues such as trade-off with life satisfaction can be examined in detail. And crucially, giving prominence to these sorts of measures will allow societies to prioritise the lived experience of their members, rather than being relentlessly focused on economic growth, which has been shown to do little to improve well-being in developed countries.

See for more.

Winton Bates said...

Thanks for drawing my attention to the National Accounts of Well-being report. I found it most interesting. There is much I like about the approach it adopts, even though some of proposed “policy levers for change” in Box 5 (p 46) are too paternalistic for my liking. It was nice to see recognition of individual autonomy as a core requirement of well-being (p 47).
It was particularly interesting to see the similarity and differences in country scores for different components of the personal well-being index.
In thinking about how well various measures of subjective well-being might correspond to the economist’s concept of utility, it seems important to consider the trade-offs that people may make between their current personal well-being and other things that may be important to them e.g. their future income security. I will probably write more about this.