VOX.eu — Origins of happiness: Evidence and policy implications

Understanding the key determinants of people’s life satisfaction will suggest policies for how best to reduce misery and promote wellbeing. This column discusses evidence from survey data on Australia, Britain, Germany, and the US which indicate that the things that matter most are people’s social relationships and their mental and physical health; and that the best predictor of an adult’s life satisfaction is their emotional health as a child. The authors call for a new focus for public policy: not ‘wealth creation’ but ‘wellbeing creation’.

Bringing down Bentham's utility calculus based on material satisfaction. that can be measured in terms of economics rather than psychological well-being.

VOX.eu
Origins of happiness: Evidence and policy implications
Andrew Clark, Sarah Fleche, Richard Layard, Nattavudh Powdthavee, George Ward

Terry Flynn — top economists fail basic literature review shock horror

Promoted from the comments here at MNE on "Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference." by Daniel J. Benjamin, Miles S. Kimball, Ori Heffetz, and Nichole Szembrot.

Terry Flynn, PhD
top economists fail basic literature review shock horror

Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference — Daniel J. Benjamin, Miles S. Kimball, Ori Heffetz, and Nichole Szembrot

More Weekend reading.

Abstract

This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on “fundamental aspects” of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects’ relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction. 

Keywords: happiness, life satisfaction, subjective well-being, stated preference, well-being index

NCBI
Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference
Daniel J. Benjamin, Miles S. Kimball, Ori Heffetz, and Nichole Szembrot

Inequality.org — Taking ‘The Spirit Level’ to a New Level

I sometimes talk about how everyone – regardless of politics — wants a society with better health, lower rates of mental illness, less violence, stronger community life, higher standards of child wellbeing. But the idea that you can get a bit closer to these goals by reducing inequality, some people find that an absolutely monstrous suggestion. 

You know the American book, The Merchants of Doubt by Naomi Oreskes and Erik Conway? It’s about the attempts to rubbish climate science and the research on the harmful impacts of pesticides and the links between smoking and ill health. The book looks at who the people behind these attempts are, where their funding comes from, and what their motivation is. 

The book makes the point that these people are basically neoliberalist free market fundamentalists. And anything that seems to be an encroachment on the free market, they feel, must be attacked. A previous publication of one of our right-wing critics was an attempt to rubbish all the evidence on the health effects of second-hand smoke. So I do think that’s what this is about. They’re trying to protect the free market.…

Wilkinson: But there’s an important point I’d like to make about the major changes in inequality. The basic picture of changes in inequality during the 20th century in most rich countries is that there was high inequality in the 1920s, then declining inequality from sometime in the 1930s, which continued through the middle of the century until it petered out in the 1970s. Then, from around 1980, you get the modern rise in inequality. That trajectory I am absolutely sure reflects the strengthening and then the weakening of the labor movement, plus the fear of communism and the strength of the social democratic movement. 

If you look in one country after another, you see inequality dropping when the proportion of the working population in trade unions rises and inequality rising when the union population is dropping. It really is an extraordinary fit.
I don’t think it’s simply that trade unions make such a huge difference to the wages of their members, though I’m sure they make an important difference. But trade union membership also provides an indicator of the strength of the countervailing voice of the whole labor movement in society, offering a different perspective. 

As soon as this countervailing voice weakened, suddenly inequality shoots up again and we lost the progress we made. I think that means that if it’s right to think about the swinging of the political pendulum, and if we are going to get a period of perhaps more radical progressive views, it is really essential that this time we make more structural changes. If the political tide turns again, we don’t want it to be so easy for progressive changes to be reversed. 

That’s why I emphasize the importance of forging real economic democracy. If you just reduce inequality with a bit of redistribution through taxes and safety-net benefits, then the first government that doesn’t like that redistribution simply undoes it all.

Lots of interesting factoids.

Inequality.org
Taking ‘The Spirit Level’ to a New Level

Stephen Bevan — Unemployed? You shouldn’t just take any job.

Being in poor-quality work which, perhaps, is boring, routine or represents underemployment or a poor match for the employee’s skills is widely regarded as a good way for the unemployed to remain connected to the labor market – and to keep the work habit. But Butterworth’s data contradict this. The HILDA data show unambiguously that the psychosocial quality of bad jobs is worse than unemployment. Butterworth looked at those moving from unemployment into employment and found that: 

"Those who moved into optimal jobs showed significant improvement in mental health compared to those who remained unemployed. Those respondents who moved into poor-quality jobs showed a significant worsening in their mental health compared to those who remained unemployed."

So now we have a slightly different answer to the question about the unemployed being better off in work. Yes they are, as long as they are in good-quality jobs. If they are in bad jobs, there is a perversely strong chance that they will be worse off – especially in terms of their mental health. 

Again, for those who think that there should be punitive undertones to policies to get unemployed people back to work would do well to question whether the “any job is a good job” maxim is as accurate as they like to think. Moreover, we should probably question whether the revolving-door characteristics of some policies in which many people fall back out of work soon after being found a job might – in part – owe their poor performance to the damaging psychosocial quality of the work itself.

This shouldn’t stop us from straining every sinew to help people find work. But it should make us think a lot more about how the quality of jobs can affect our health and productivity.…

The Washington Post
Unemployed? You shouldn’t just take any job.

Stephen Bevan | Director of the Centre for Workforce Effectiveness at the Work Foundation and an honorary professor at Lancaster University

ht Dan Lynch

What Psychology Says About Materialism and the Holidays — APA interviews Tim Kasher

Well-being is inversely correlated with materialism.

APA: What does psychological research say about materialism’s link to happiness? 

Kasser: The connection between materialism and well-being is the longest-standing strand of research in the materialism literature. My colleagues at the University of Sussex and I recently published a meta-analysis that showed the negative relationship between materialism and well-being was consistent across all kinds of measures of materialism, types of people and cultures. We found that the more highly people endorsed materialistic values, the more they experienced unpleasant emotions, depression and anxiety, the more they reported physical health problems, such as stomachaches and headaches, and the less they experienced pleasant emotions and felt satisfied with their lives.

The most supported explanation for why well-being is lower when materialism is high concerns psychological needs. Specifically, materialistic values are associated with living one’s life in ways that do a relatively poor job of satisfying psychological needs to feel free, competent and connected to other people. When people do not have their needs well-satisfied, they report lower levels of well-being and happiness, as well as more distress.

As Abraham Maslow's hierarchy of needs suggests. An economy is the material life-support system of a society but well-being only begins with material sufficiency. Material sufficiency is a necessary but not a sufficient condition for well-being. Material abundance is neither a necessary nor a sufficient condition for human well-being, regardless of the neoliberal propaganda and advertising to the contrary. There's more to living the good life in a good society than money and toys.

Happy Holidays!

American Psychological Association
What Psychology Says About Materialism and the Holidays
Six questions for materialism expert Tim Kasser, professor of psychology at Knox College in Galesburg, Illinois

Steve Randy Waldman — Welfare economics: an introduction (part 1 of a series)

Lotsa weekend reading. Put this on the list.

Commenters at interfluidity are usually much smarter than the author whose pieces they scribble beneath, and the previous post was no exception. But there were (I think) some pretty serious misconception in the comment thread, so I thought I’d give a bit of a primer on “welfare economics”, as I understand the subject. It looks like this will go long. I’ll turn it into a series.

Utility, welfare, and efficiency

Our first concern will be a question of definitions. What is the difference between, and the relationship of, “welfare” and “utility”? The two terms sound similar, and seem often to be used in similar ways. But the difference between them is stark and important.

Interfluidity
Welfare economics: an introduction (part 1 of a series)
Steve Randy Waldman

K. A. Hamid and A. Duraiappah — The GDP-Wellbeing Gap

The link between economic growth and human wellbeing seems obvious. Indeed, as measured by gross domestic product, economic growth is widely viewed as the ultimate development objective. But it is time to rethink this approach. 

In fact, there is a rising disconnect between countries’ per capita GDP and their citizens’ wellbeing, as rapid output growth exacerbates health challenges and erodes environmental conditions. Given this, people increasingly value non-material wealth just as highly as monetary wealth, if not more.

But persuading policymakers and politicians of GDP’s limitations is no easy feat. After all, it is far simpler to defend a well-understood, long-accepted framework than it is to champion a new worldview.

Again, quantity versus quality.

Project Syndicate
The GDP-Wellbeing Gap
Zakri Abdul Hamid, a member of the UN Secretary-General’s Scientific Advisory Board, Science Adviser to the Prime Minister of Malaysia, and co-chair of MIGHT, and Anantha Duraiappah, Executive Director of the International Human Dimensions Program on Global Environmental Change, hosted by UN University in Bonn

Atif Mian And Amir Sufi — Inequality in Well-Being

As we mentioned in our post yesterday, economists care much more about inequality in well-being rather than inequality in income or wealth. Data on well-being are more difficult to gather, but we discussed some evidence that inequality in consumption also increased from 1980 to 2010. Consumption directly affects the utility of an individual in most economic models. Income does not.... 

There has been a lot of attention on income and wealth inequality, and for good reason. But inequality in outcomes such as consumption and health are far more important. We’ve gathered some evidence here, but more is needed. The evidence so far suggests that inequality in well-being has tracked inequality in wealth and income closely.

House of Debt
Inequality in Well-Being
Atif Mian And Amir Sufi

(h/t Mark Thoma at Economist's View)

Chris Dillow — Freedom, Well-Being & Capitalism

Food for thought for the philosophical.

Read it at Stumbling and Mumbling
Freedom, Well-Being & Capitalism (short)
Chris Dillow | Investors Chronicle

Marx called it "alienation." Alienation is also a sociological, existentialist and psychological term for a modern maladie.