Sunday, November 2, 2014

Why am I interested in happiness research?

“THOMAS GRADGRIND, sir. A man of realities. A man of facts and calculations. A man who proceeds upon the principle that two and two are four, and nothing over, and who is not to be talked into allowing for anything over. Thomas Gradgrind, sir - peremptorily Thomas - Thomas Gradgrind. With a rule and a pair of scales, and the multiplication table always in his pocket, sir, ready to weigh and measure any parcel of human nature, and tell you exactly what it comes to. It is a mere question of figures, a case of simple arithmetic. You might hope to get some other nonsensical belief into the head of George Gradgrind, or Augustus Gradgrind, or John Gradgrind, or Joseph Gradgrind (all supposititious, non-existent persons), but into the head of Thomas Gradgrind - no, sir!
In such terms Mr. Gradgrind always mentally introduced himself, whether to his private circle of acquaintance, or to the public in general.” Charles Dickens, Hard Times, Chapter2.

I'm not like that. However, an interest in happiness research may seem to many people to imply an obsession with measuring, calculating and attempting to understand things that are not meant to be understood. 

Perhaps trying to understand what makes people happy is a bit like trying to understand why jokes are funny. It isn’t obvious that an understanding of what makes jokes funny would be much help to anyone in telling jokes, or how an understanding of what makes people happy would help anyone to become happier.

It is fairly easy to explain how I came to be interested in happiness research, so I will begin by writing about that. In my work as an economist I spent more than a few decades considering what government policies were likely to advance the well-being of the people in the countries where I have lived and worked (mainly Australia and New Zealand. It seemed fairly obvious that the vast majority of Australians and New Zealanders wanted higher incomes, so it was reasonable to assume that would improve their well-being. If someone questioned whether higher incomes would make people any happier, my defence was that economists should be in the business of making it possible for people to have happier lives rather than advising them how to spend their money.

At the same time, I could not help becoming interested in the puzzle of why happiness surveys showed little or no increase in average happiness ratings in high income countries over several decades while average income levels rose substantially. This is of course Easterlin’s puzzle - named after the economist Richard Easterlin.

I stopped being puzzled once I understood that happiness surveys measure emotional well-being - a component of well-being rather than the whole package. There is no reason to expect the value that people place on physical health, education, housing and safety, among other things, to be fully reflected in measures of emotional well-being. 

Emotional well-being is strongly related to self-esteem, optimism and the feeling of being in control of one’s life – none of which would be expected to be strongly influenced by further increases in incomes in high-income countries.

It is true, of course, that when people see higher incomes as the pathway to emotional bliss they are unlikely to be satisfied with one pot of gold - even if they find the end of a rainbow. But most people seem to make sensible choices. They might seek a higher income if that is necessary to pursue objectives that they consider to be worthwhile. For many people, higher incomes are incidental to career objectives. There is no reason to expect people to stop trying to achieve more in life just because they are satisfied with their current standard of living.

It seems to me that if we are interested in measuring well-being, then the survey measures of happiness are just one of the items we should look at. I favour the approach taken by the OECD in its Better Life Index.

However, an indicator approach doesn’t give economists a value-free measure of well-being. It leaves open the question of what weights should be given to the various component indexes. The OECD leaves the value judgement in the hands of the users of its index. That is more appropriate than having researchers assign weights, but it would be good to see how weights might need to differ to reflects the different values of people in different parts of the world. In my view the Better Life Index should be accompanied by illustrative weights derived from a values survey.

So, one of the reasons why I am interested in happiness research is apparent from what I have written. Happiness research is relevant to measurement of human well-being and that is relevant to economic policy.

I am particularly interested in the relationship between freedom and flourishing. Do government restrictions on individual freedom – in the wars against drug taking, smoking, alcohol, obesity, overwork etc. - actually have the desired effect of enabling people to have happier lives? I don’t think so. The policies adopted by governments seem designed to make people less happy in an attempt to get them to adopt healthier lifestyles, but I don’t know where to find the evidence to prove it.

In any case, that is only part of the story. My interest in happiness research is not always closely related to government policy. Some of my recent posts have taken me into the relationship between life satisfaction and the incidence of negative emotional experience. I am not sure why I am interested in such matters. Nevertheless, it seems more satisfying than spending my time trying to understand what makes jokes funny.

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