Sunday, November 11, 2012

Why have happiness researchers been so slow to recognize the problems in using surveys to measure progress?

In my last post I pointed out that it is not possible to measure perceptions of progress accurately by using surveys to measure average life satisfaction at different times and then observe to what extent it has risen or fallen. As a result of changing reference norms, people who value an expansion of economic opportunities cannot necessarily be expected to show rising satisfaction with their lives in successive happiness surveys.

I have just discovered that a similar point was made by Francis Heylighten and Jan Bernheim over a decade ago, in an article that seems to have attracted little attention. The authors made the point as follows:
‘Progress could in principle be measured through the change over time of average scores of subjective well-being. However, the existing longitudinal data show little improvement. These survey results are intrinsically insensitive to developments over time, because SWB is typically evaluated relative to proximate, and therefore salient, reference points, such as peers or expectations based on recent experience’. See: Heylighen F. & Bernheim J.(2001): "Measuring Global Progress  Through Subjective Well-Being", in: Proceedings of the III Conference of the ISQOLS.

One of the suggestions that Heylighten and Bernheim made to correct this distortion was to develop a progress indicator from variables that explain a high proportion of cross-country differences in life satisfaction.

If that approach was followed to develop an indicator to measure perceptions of  progress, recent research by John Helliwell and Christopher Barrington-Leigh suggests that the relevant variables to include might be: the log of household income; whether the respondents had relatives or friends to count on if needed; whether the respondents were satisīŦed with their freedom to choose what to do with their lives; whether corruption was widespread in business and government; and whether they had donated money to a charity in the past month. Their analysis suggests that people in both high-income and low-income countries place about the same value on log income (use of logs allows for declining marginal utility of income) but people in high-income countries place more value on variables other than income. See: ‘Measuring and Understanding Subjective Well-Being Canadian Journal of Economics, 43 (3), 2010.

However, I’m not sure that the suggested approach would entirely solve the problem. It seems likely that perceptions that people in low-income countries have of the best possible life would involve a less opulent life-style than the perceptions of people in high-income countries i.e. perceptions of the best possible life rise with increasing wealth (and the marginal utility of income may not decline as rapidly as cross-country regressions seem to imply). In my view, that means it would be preferable to measure perceptions of progress directly using the method suggested in my last post, i.e. by comparing the answers that survey respondents provide when asked to rate their past lives at the same time as their current lives. An even better approach to measurement of progress, as suggested in the book I am writing, would be to identify the characteristics of good societies and measure to what extent societies were adopting those characteristics.

There may be a case to be made that the well-being of people in high-income countries would be higher if the move toward post-materialistic societies was more rapid. But the people who want to make that case should argue it openly, rather than pretending that responses to happiness surveys indicate that most people do not place much value on material progress.

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