Happiness and Development
Transcript of Happiness and Development
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Happiness and DevelopmentHappiness and DevelopmentHappiness and DevelopmentHappiness and DevelopmentExplaining the Paradox
SOC 206:
The Sociology of Development
Final Seminar Paper
Arturo Franco
May 21, 2005May 21, 2005May 21, 2005May 21, 2005
Kennedy School of GovernmentKennedy School of GovernmentKennedy School of GovernmentKennedy School of Government
Harvard UniversityHarvard UniversityHarvard UniversityHarvard University
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I. Introduction: The Paradox of Happiness and Development
The grumbling rich man may well be less happy than a contented peasant, buthe does have a higher standard of living than the peasant. Amartya Sen
Economists and political scientists, as opposed to sociologists and psychologists,
have commonly backed away form the use of subjective assessments of human
development. In turn, there has been a tendency to focus on the fundamental importance
of economic and material growth for reducing poverty and attaining a wide range of other
development objectives, including notions of well-being. However, even when most of
the modern economic models assume that income and utility move in parallel, some
recent studies on life satisfaction or happiness find a seeming paradox that challenges
that postulation: aggregate levels of life satisfaction (happiness) do not increase as
societies grow wealthier, even though within countries, better-off individuals are, for the
most part, happier than the less wealthier ones.
These findings highlight the importance of relative rather than absolute
differences in income levels, particularly after countries cross a certain economic
threshold in their development process. This paradox between growing income and
decreasing subjective well-being (SWB) could also show that some factors, outside of
material accumulation and economic growth, can affect a persons appraisal of their own
welfare, and could also influence their responses to incentives and policies. Faced by
these trends, social scientists have begun to ask: why and how does economic
development make people increasingly unhappy?
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An interesting way of stating this paradox can be found in Lane (2000, p. 13),
who believes that the economic () institutions of our time are products of the
utilitarian philosophy of happiness but seem to have guided us to a period of greater
unhappiness. Luckily, we have seen a few attempts to study the relationship between
happiness and development, which has focused mostly on individual wealth and
demographic characteristics such as age, marital status, and education.
This paper constitutes a review of the most relevant literature on this topic and its
main findings. In the next section, we present a brief overview of some of the evolution
of different theoretical approaches to the concept of happiness. In Section III, we focus
on some of the main sociological and psychological explanations of the discussed
paradox. In Section IV we describe some of the attempts to examine this issue within the
field of economics. Later on, in Sections V and VI, we review some of the empirical
evidence on the subject, and illustrate some of the issues of measurement of these effects,
respectively. In the final section we present some potential public policy implications.
II. From Happiness to Utility: Historical Evolution of the Concept
The happy man will not need external prosperity. - Aristotle
As we can draw from the quote, the Aristotelian conceptualization of happiness
was not that of a temporary state that could be achieved, but as a way of living that
individuals could subscribe to, regardless of their living environment or societal context.
In a sense, this notion does not produce any concerns regarding the effect that economic
development could have on of human happiness, given that well-being is unaltered.
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In contrast, there is another view which states that the sources of happiness are
material, and that it can be achieved or lost throughout life. The juxtaposition of these
two ideas of happiness was discussed along many centuries by some of the worlds most
renowned philosophers and thinkers and led to the very ardent eighteenth century debate
on virtue, commerce and luxury.1 In this period, along with his economic and
philosophical works, Adam Smith (considered the father of economics) developed a
normative and objective notion of happiness which Smith defined as real happiness
based on a specific model of virtue linked to prudence.2
The presence of Smiths notion of real happiness, led to the elaboration of an
objective notion of utility in later works, as can be taken from the following historical
analysis by Agnati (2002): Happiness in the social sciences is a concept which allows us
to follow the development of the economic doctrines from which, analytically, the logic
of production and of employment was derived, with a positive theory. In a chronological
succession we find that Muratoris (1749) public happiness is understood as normative
public felicity; then we have English utilitarianism, in the sense of the absolute
utilitarianism of Bentham (1789); later, with the revolution in economic science of the
1870s, the marginalistic utilitarianism of Jevons (1871), Menger (1871) and Walras
(1874) was innovative. The maximum ramification of the neoclassicists was general
economic equilibrium in which we have the static wellbeing of Pareto (1896).
1 Chiara, (2003, p. 11)
2 Chiara, (2003, p. 3) argues that such notion can be derived from Adam Smiths elaboration of adistinction between value in use and value in exchange developed in the Wealth of Nations.
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Then, in the traditional concept of wellbeing, there is the novelty of organic
wellbeing of Demaria (1931) and, reviewing the concept of happiness in the mid-18th
century, Kaldors (1939) contemporaneous compensating happiness. Another fruit of
the doctrinarian tradition is found in Romagnosi (1832), from which Demaria (1963)
draws lincivilimento interpreted as the fifth sub-function of the production function,
the other four sub-functions being technical combination, cost, revenue, and
investment.3
As we will see, these recent developments of the concept of happiness produce
some important issues in its analysis as an important outcome variable of the economic
process. Lastly, it is important to note that the concept of human well-being, which is still
commonly linked and even understood as happiness, is currently regarded as an
irreducible human right by the United Nations Organization (and most countries in the
World).
III. Social Theories of Happiness and Development
a. Time Pressures and Modernization
Happiness is not best achieved by those who seek it directly. - Bertrand Russell
As part of the Modernization Theory tradition, Parsons (1971) and other
sociologists have suggested that the quality of life has been proliferating along with living
standards and economic progress, along the modernization path.
3 Agnati (2002, p. 2)
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It is exactly this change that accelerates and complicated social life, producing
some of the negative effects of growing pressure (i.e. stress) and at the same time, seem
to be counterbalanced by the returns of modernization, in a pattern of increasing
satisfaction with material things. The happiness and development paradox can then be
interpreted through the modernization theory structure in an interesting way. In fact,
empirical evidence suggests there is a general trend found in many modern societies; time
pressure seems to rise and many people spend more time working and there are more
complaints about the pace of life.4 The paradoxical question in this sphere becomes then:
are happiness and life satisfaction socio-cultural constructions typical of modern
societies? Why does industrialization have the tendency to produce goods rather than
leisure time? Garhammer (2003) suggests some answers:
A first explanation for this paradox is that the advantages which are assigned to
modernization i.e. the rising living standard and enhanced opportunities for enjoyment of
life are able to compensate the cost of modernization i.e. rising time pressure. A second
explanation is that time pressure is good for us since it keeps us going. In this view
pace of life generates eu-stress or arousal. In this psychological approach time pressure
fulfils a positive function for mobilizing individual resources.5
Finally, the author also
suggests a third approach: Even when the majority of citizens report high levels of
happiness, the need to ease the time-burden of disadvantaged groups and to down-speed
work and social life in general is urgent.
4 Garhammer (2003, p. 4)5 Garhammer (2003, p. 4)
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These results back up the scarcity hypothesis of Inglehart 2000: Individuals as
well as societies place the greatest subjective value on those things which are relatively
scarce: As disposable time runs short in wealthy nations, time becomes upgraded in the
value system.6
In this manner, when more people feel that they are rushed, then the
value of time becomes more important and costly. This could be one of the mechanisms
through which development produces a decrease in the aggregate levels of happiness.
b. Marx and Time Poverty
Happiness seems made to be shared. - Pierre Corneille
On the same line (but many years before), in his Grundrisse (1857) Karl Marx formulated
insights on the significance of time prosperity and economic advancement for enjoyment
of life: both an increase in consumer goods and in disposable time to enjoy these goods
would be necessary to enhance quality of life.7
Nevertheless, Marx states that this simple
proposition is almost impossible to be achieved in a capitalist economy.
While private property and the wealth of nations which dedicate their power to the
growth of capital are promoted through the use of increasing labor time and human
capital, Marx insists that society will not gain wealth in this way: people enhance their
wealth through saving working time by increasing the productivity of their work in order
to transform their working time into their disposable time, but in market societies
6 Inglehart (2000, p. 200)7 Garhammer (2003, p. 43)
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productivity is permanently increased and does not serve to increase work-free hours and
years of the employees.8
In the current economic reality, this assertion can become evident, especially in
developing countries. The world economy does not seem to be presenting a scarcity of
sources of means of production (i.e. financial capital and natural resources) and there are
enough input goods and workers willing to work. The open market system creates a
permanent pressure for competitiveness and an increase in productivity, which has
resulted in leisure time poverty for many.
On the one hand, as stated by Garhammer (2003), millions of workers whose
wages no longer serve for their rising expenses, have forced leisure time lacking income
and hence deteriorating standards of living. On the other hand, those whose labor is still
demanded are afraid of unemployment in the future and they have to be willing to accept
cuts in income and living standards and working overtime. Hence the Marxist time yields,
which in principle would be possible for enhancing the quality of life of all, are replaced
through a division between income-poor and time-poor.9
While both of the mechanisms by which capitalist modes of production (and
modernization) produce increasing time pressures that negatively affect life satisfaction
and overall happiness, it is not clear whether the socialist alternative can produce better
results. According to Murray (1991), people living in capitalist societies are still better
able to pursue happiness than are people living under socialism. Despite the inroads made
by the welfare state in Western Europe and North America, people in those parts of the
8 Garhammer (2003, p. 44)9 Garhammer (2003, p. 36)
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world continue to have much more control over important functions of their lives than do
people living under socialism. I think the merits of the capitalist model are revealed by an
examination of the quality of personal and community life in the countries of the West
versus the socialist countries.10
On the other hand, the huge accumulation of goods and services, and the
adoration of everything that is private (which characterizes market societies) may be
reactions to the capitalist corrosion of everything that is common to people. The time
pressure and the relational failure of capitalist societies, can explain both the capacity of
those societies to generate growth and their failure in the promise of increased
happiness.11
c. Psychologists and Set-Point Theory of Happiness
Happiness makes up in height for what it lacks in length. - William Cowper
As reviewed by Easterlin (2005), the growing literature in positive and hedonic
psychology has shown a tendency towards the so-called set-point theory in which
happiness is primarily determined by personality and genetic factors, and like these
factors, is highly stable over the life course. Important life events, such as a major
accident or serious disease, loss of a job, the formation or dissolution of unions, birth of a
child, and death of a partner, only temporarily deflect a persons happiness from a set-
point given by personality and genetic traits.12 This theory is based on the notions of
mechanisms of psychological adaptation and compensation, through which humans
10 Murray, (1991, p. 19)11 Bartolini, (2003, p. 12)12 Easterlin, (2005, p. 2)
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maintain a steady-state level of life satisfaction equilibrium, deviating from it only
temporarily.
For our current purposes, set-point theory and psychological adaptation would
make the discussion of the effects of development on happiness futile, unless
development could affect the exogenous factors that produce the initial (and constant)
level of happiness in each individual or society. While adaptation and compensation
mechanisms have been evidenced in many studies, the relevant empirical question in this
case is: how complete is this adaptation to development effects on overall happiness?
According to Di Tella (2001), there is persuasive evidence that a change-in-GDP effect
upon a countrys happiness is consistent with theories of adaptation. However, while it
seems likely that some of the well-being gains from extra national income wear off over
time, there is persuasive evidence of long-lasting gains in happiness derived from
economic advancement (at least until society reaches the paradoxical threshold) as we
will see in the following section.
IV. Economic Theories of Happiness
Following the utilitarian tradition discussed earlier, which has virtually permeated
to all corners of economic thought, happiness and subjective well-being have not been a
recurrent theme in mainstream research for many decades. However, very recently, some
economists have attempted to resolve the widely asserted happiness and development
issue. As stated by Bartolini (2003), a man of the nineteenth century would probably be
astonished that Western societies emancipated from mass poverty would be populated by
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a mass of dissatisfied individuals; and the billions of human beings who still suffer from
poverty would probably find it just as astonishing.13 The happiness and development
paradox takes several flavors in the study of economics, and life satisfaction has been
related to income, inequality, growth, unemployment and even inflation issues.
a. Personal Income & Inequality
The greatest happiness for the greatest number. - Cesare di Bonesana Beccaria
As we have mentioned before, the basic happiness paradox for economists can be
interpreted as the issue of how important is an individuals relative income or
consumption for their well-being, when we compare it to its absolute terms. On one
extreme, as shown by Alpizar (2005), standard economic theory typically assumes, based
on no empirical evidence that only absolute income and consumption matter. On the
other side, some economists have concluded that only it is relative income which seems
to matter; based on a large number of survey-based psychological studies where it is
found that subjective happiness increases with income in a given country and in a given
year, but also that average happiness in a given country seems to be roughly constant
over time, even though average income increases.14
According to Easterlin (2001), material aspirations are initially fairly similar
among income groups (more income brings greater happiness) but as aspirations grow
along with income, they undercut this favorable effect. In other words, since aspirations
grow along with earnings, experienced happiness is systematically different from
13 Bartolini, (2003, p. 7)14 Alpizar et al (2005, p. 406)
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projected happiness. In the same line, recent studies have shown that reported levels of
happiness do not increase along with the level of income in advanced countries (for
example, Blanchflower and Oswald, 2000; Easterlin, 1995).
If we also acknowledge the existing economic literature of time pressure (similar
to the facts discusses in Section III) and the ideas that free time becomes an increasingly
scarce good (Sullivan and Gershuny, 2001) the happiness paradox for economics
suggests that in reality, individuals (assumed to be rational actors) are behaving in an
economically sub-optimal way. In the words of Biswanger (2002), they would be better
off if they worked less and if they had more leisure time; therefore the question arises: If
different economic behavior would make us happier; why dont we change our
behavior?15
Since the rationality of economic agents cannot be put into question without
affecting most of the basic principles of modern economics, the answer to this question
has been posed as a debate among preferences between a personal and societal well-
being. In this sense, and in accordance to the utilitarian creed, the quality of a society
should be judged using the degree of happiness of its members, the best society being the
one that provides the greatest happiness for the greatest number. However, if one where
to follow the egalitarian principle, the quality of a society should be judged by the
disparity in happiness among citizens, a society being better if differences in happiness
are smaller.
15 Binswanger (2002, p. 2)
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The growing literature on happiness and levels of income disparity shows that
countries differ greatly in the degree of inequality that they endure, even at comparable
levels of development. For instance, Alesina et al (2004) shows that European observers
object to the higher and growing inequality in the US. American commentators argue that
European societys obsession with egalitarian principles and equality can suppress
creativity and produces a vicious cycle of welfare compulsion for the worse-off in
society. The author also finds that individuals in developed countries have a lower
tendency to report themselves happy when inequality is high, even after controlling for
most personal characteristics; in Europe, the poor and those on the left of the political
spectrum are unhappy about inequality; whereas in the US the happiness of the poor and
of those on the left is uncorrelated with inequality. Interestingly, in the US, the rich are
bothered by inequality.16
b. Growth, Inflation & Unemployment
There is more to life than accelerating growth. M. Gandhi.
Another important and contested issue in economics is the relationship between
movements of major macroeconomic variables and aggregate happiness. To begin, there
is in the literature some reliable evidence that peoples happiness answers en masse are
strongly correlated with movements in current andlagged GDP per capita.17 In this sense,
economic growth and increased production can be then associated with a stable increase
in opportunities for consumption, savings, and investment, where innovative products are
16 Alesina et al (2004)17 Di Tella et al (2002, p. 823)
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created constantly and society acquires more choices. However, some economists also
believe that this consequential element of economic advancement, the increase in the
amount of available options for consumption, could turn out to be a mixed blessing as
they also raise the opportunity costs of every consumption or investment decision; in
other words, the more options exist, the more alternative ways there are to spend (or
invest) your money and it gets increasingly difficult to make an optimal decision as our
capacity to absorb the relevant information is limited.18
In other words, the dynamic nature of the conditions of decision making that stem
out of economic growth processes could produce increasing difficulties for individuals
and society to enjoy the growing variety of goods and services because they feel
incapable of taking the proper choices and, once a decision has been made, there is a
constant feeling of having missed an even better option. The natural consequence of this
pattern becomes a growing infeasibility of long-term commitments as we have to keep
the options open for the future (i.e. life-long employment, life-long marriage, life-long
living in the same city), which could constitute another explanation of the paradoxical
decrease in overall happiness.19
In terms of other macroeconomic phenomena, Di Tella et al (2001) studied
reported well-being data on a quarter of a million people across 12 European countries
and the United States, and shows that people appear to be happier when inflation and
unemployment are low (while at the margin, unemployment depresses reported well-
being more than does inflation).
18 Binswanger (2002, p. 13)19 Binswanger (2002, p. 13)
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V. Comparative Happiness: Some Illustrations
It is an empirical truth that there are sizeable differences in happiness between
countries. These differences are consistent across indicators and quite stable through
time. There is a little support for the view that these differences are due to cultural bias,
or that they results from cultural differences in language, desirability bias, response
tendencies or familiarity with the concept of happiness.20 At the same time, there is
concrete empirical sustain for the view that these disparities result from the fact that some
societies provide their citizens with better living conditions than others; and in this way,
the bulk of the variance in happiness can be explained by nation characteristics such as
economic prosperity, social security, political freedom, and social equality.21 However,
we can also find marked differences in overall happiness trends and patterns between
countries (and groups of countries) in unequal stages of development.
a. Happiness in the United States and Europe
People who claim that money cant buy happinessjust dont know where to shop. - Anonymous
Many studies have asked the question: are Americans (or Europeans) getting
happier over time? In the early 1970s, 34% of those interviewed in the General Social
Survey described themselves as very happy, while only 25 years later, the figure was
20 Ouweneel and Veenhoven (1991, p. 20)21 Ouweneel and Veenhoven (1991, p. 20)
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30%. For women, the numbers go from 36% at the start of the period, to 29% a quarter of
a century later. On the other hand, in the early 1970s approximately a third of British
people say they are very satisfiedwith life. The number is unchanged by the late 1990s.
How much of this shift has to do with economic performance?
Di Tella (2002) has also studied the effects of economic downturns and recessions
on happiness (subjective well-being) in the U.S. and Britain, which are usually large. He
correctly states that it is not just that income (or production) drops and that some people
are unemployed, but on top of those costs to society, and after controlling for personal
characteristics of the respondents, year dummies, and country fixed effects, we estimate
that individuals would need 200 extra dollars of annual income to compensate for a
typical U.S.-size recession.
The compensation amount might seem ridiculously low to a normal person,
however, it constitutes almost 3% of per capita GDP, a loss that is over and above the
actual fall in income in a recession. A potential interpretation that the authors present for
this phenomenon is that in an economic downturn, people suffer what they call a fear-of
unemployment effect, one of the many psychic costs of recessions which standard
economics tends to ignore.
While Easterlin (1995) argued that economic growth does not bring happiness to a
society, a proposition that has also been empirically supported for the U.S. and most of
Europe, the picture is not a simple one. Blanchflower and Oswald (2000) found that some
groups in society (including American men and blacks) have become happier through the
last three decades. Moreover, once the British equations control for enough personal
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Table 1: Some Interesting Results (US and Britain, 1970-1995)
1. Whatever the consequences of anti female-discrimination policy elsewhere in society, it hasapparently not been successful in either country in creating a feeling of rising wellbeing among women.
2. Black people in the US appear to be much less happy, ceteris paribus, than whites. One interpretationof this is that our methods provide a new way to document the existence of discrimination.
3. The difference in the well-being of racial groups in the United States has narrowed over the last fewdecades. Blacks have made up ground.
4. Our calculations suggest that to compensate men for unemployment would take a rise in income atthe mean of $60,000 per annum and to compensate for being black would take $30,000 extra perannum. A lasting marriage is worth $100,000 per annum (when compared to being widowed orseparated). Because there appears to be little precedent for such calculations in the published socialscience literature, they should be treated with care.
5. Higher income is associated with higher happiness.
6. Relative income matters per se.
7. Reported well-being is greatest among women, married people, the highly educated, and those whoseparents did not divorce. It is low among the unemployed. Second marriages are less happy.
8. Happiness and life satisfaction are U-shaped in age. In both Britain and the US, wellbeing reaches aminimum, other things held constant, around the age of 40.
Source: Conclusions by Blanchflower, D.G. and Oswald, A.J. (2000)
characteristics (including whether unemployed or divorced), there is some evidence of a
statistically significant upward movement in well-being since the 1970s. Their other main
findings are the following:
b. Happiness in the Developing World
Happiness is often the result of being too busy to be miserable. - Anonymous
Moving to the other side of the spectrum, Peiro (2001) examines the relationships
between socioeconomic conditions and happiness or satisfaction of individuals in 15
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developing countries. In agreement with earlier studies, age, health and marital status are
strongly associated with happiness and satisfaction. In seeming contrast with other
studies, however, unemployment does not appear to be correlated with happiness,
although it is clearly associated with satisfaction. Income is also strongly associated with
satisfaction, but its association with happiness is weaker. These results point to happiness
and satisfaction as two distinct spheres of well-being. While the first would be relatively
independent of economic factors, the second would be strongly dependent.22
In another assessment, Graham and Pettinato (2000) found that the determinants
of happiness in Russia were very similar to those for Latin America (See: Appendix). Not
surprisingly, increases in wealth have a positive effect on happiness, which, as in the case
of Latin America, seem to outweigh the effects of education level. However, in contrast
to Latin America (and more so to the advanced industrial countries), being married did
not have any significant effects on happiness in Russia. Men, meanwhile, were happier
than women in Russia, in contrast to Latin America, where there was no gender effect.
Fear of losing ones job had significant and negative effects, while being employed had
no significant effects in either direction.23
Finally, figures 1 and 2 in the Appendix show some empirical constructions of the
happiness life-cycle for Latin America and the United States. Rather surprisingly, the
two graphs show almost a perfect negative relationship, where 45 years of age is roughly
the happiest age level for Americans and the lowest point in happiness for Latin-
Americans. The possible reasons behind this are not clear and add to the confusion.
22 Peiro (2001, p. 23)23 Graham and Pettinato (2000)
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VI. Measurement and Indicators of Happiness
Happiness is not always measured in smiles. - Anonymous
a. Appraisal of Happiness
Veenhoven (1996) states that the life satisfaction of humans can be inferred from
their appraisals, this is, the fact that humans experience affects. These affective appraisals
are highly indicative for the quality-of-life (QOL). In this regard, positive affects are
generally indicative of good adaptation to life, and in many ways, to cognitive notions of
happiness. In the same authors words, the degree to which inhabitants of a nation
appraise their life positively can be assessed in two different ways: indirectly by inferring
from their behaviors and directly by asking how they feel about their life. For long social
scientists have preferred the former method. By now it is clear that only the latter is
viable for this purpose. Assessing the appraisal of life in a nation requires that the total
of experienced well-being is estimated. This sum of experience can properly be denoted
by the concept of happiness; where for this particular construction, happiness is a person's
overall evaluation of his/her life as-a-whole.
b. Happy Life-Expectancy and Development Indicators
The concept of happiness can also be implemented as a viable option for
measuring overall development of human well-being among nations. Currently, the most
widely used indicator for compounded measures of well-being or QOL is the Human
Development Index. In this approach QOL is measured by input; the extent to which a
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society can offer conditions assumed to be favorable; yet, the basic problem is that one
never knows to what extent the cherished provisions are really good for people. 24 An
alternative, presented by Veenhoven (1996) is measuring QOL in nations by output, and
to consider how well people actually flourish in the country, a conception which is
operationalized by combining registration based estimates of length-of-life, with survey
data on subjective appreciation-of-life. In this way, measures of life-expectancy in years
are multiplied by average happiness on a 0-1 scale. The product is named Happy Life-
Expectancy (HLE), and can be interpreted as the number of years the average citizen in
a country lives happily at a certain time.25
Recently, the HLE indicator was assessed in 48 nations, with results that show it
is highest in North-West European nations (about 60) and lowest in Africa (below 35).
Compatible with our previous discussion, HLE scores are systematically higher in nations
that are most affluent, free, equal, educated, and harmonious; country-characteristics that
together explain 70% of the statistical variance in HLE. Strikingly, HLE is not
significantly correlated to unemployment, state welfare and income equality, nor to
religiousness and trust in institutions; HLE does not differ either with military dominance
and population pressure.26
VII. Policy Implications
Happiness is a choice that requires effort at times. Aeschylus
24 Veenhoven (1996, p. 11)25 Veenhoven (1996, p. 22)26 Veenhoven (1996, p. 16)
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To end, we briefly turn to one of the practical applications of the discussion about
how the process development impacts peoples happiness levels, the sphere of public
action and decision-making. One of the most fundamental objectives of public policy is
to improve the welfare of as many people as possible; acting within a given set of
resource limitations. Still, most academic and public policy debates rarely address the
question of what determines improvements in welfare or in life satisfaction, and in a way,
the issue of happiness is virtually inexistent. In this context, we believe that the question
of whether economic growth increases happiness and what public policies increase
happiness should constitute and important theme and be addressed fully.
Easterlin (2005) believes that with regard to public policy, the present results
imply that the high degree of stability in average happiness over the life cycle is by no
means inevitable; rather, that public programs focused on specific domains may alter the
life course of happiness. By showing that satisfaction with health is the most
consistently negative influence on happiness throughout the life cycle, the author states it
is reasonable to infer from the evidence that public programs that modified the incidence
with age of disease and disability, and reduce the breakup of families due to early death,
would finally improve the life cycle pattern of satisfaction with family life, which would
raise the life course trajectory of happiness.27 Lastly, Bartolini (2003) also believes that
government programs and policies can increase happiness, but this is reached along the
arduous road and long-drawn-out time scale of cultural policy (for example educational
policy) and a shift in individuals perceptions and expectations.
27 Easterlin (2005, p. 25)
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VIII. References
Agnati, A. (2002) Happiness as Productivity: The development of the concept of happiness in politicaleconomy from the mid-18th to the late 20th centuries. Working Paper for Conference: The Paradoxes ofHappiness in Economics. University of Milano-Bicocca.
Alesina, A., Di Tella, R., MacCulloch, R. (2004) Inequality and Happiness: Are Europeans and Americansdifferent?Journal of Public Economics. Vol. 88, 2009-2042.
Alpizar, F., Carlsson, F. and Johansson-Stenman, O. (2005) How Much do we Care about Absolute versusRelative Income and Consumption.Journal of Economic Behavior & Organization. Vol. 56, 405-421.
Bartolini, S. (2003) Why do People Feel the Pressure of Time? Why are they so Unhappy? WorkingPaper for Conference: The Paradoxes of Happiness in Economics. University of Milano-Bicocca.
Binswanger, M. (2002) Why Does Growth Fail to Make Us Happier? Working Paper. University ofApplied Sciences of Northwestern Switzerland, Gallen.
Blanchflower, D.G. and Oswald, A.J. (2000) Well-Being Over Time in Britain and the USA. NBERWorking Paper No. 7487.
Chiara, B. (2003) The Road to Virtue: Adam Smiths Economics of Happiness. Working Paper forConference: The Paradoxes of Happiness in Economics. University of Milano-Bicocca.
Di Tella, R., MacChulloch, R.J., Oswald, A.J. (2001) Preferences over Inflation and Unemployment:Evidence from Surveys of Happiness. The American Economic Review. Vol. 91, No. 1, 335-341.
Di Tella, R., MacChulloch, R.J., Oswald, A.J. (2002) The Macroeconomics of Happiness. The Review of
Economics and Statistics. Vol. 62.
Easterlin, R. (2001) Income and Happiness: Towards a Unified Theory. The Economic Journal. Vol. 111,465-484.
Easterlin, R.A. (1995) Will Raising the Incomes of All Increase the Happiness of All.Journal ofEconomic Behavior and Organization, 27, 35-47.
Easterlin, R.A. (2005) Is There an Iron Law of Happiness. Department of Economics, University ofSouthern California.
Garhammer, M. (2003) Pace of Life and Enjoyment of Life. Working Paper for Conference: TheParadoxes of Happiness in Economics. University of Milano-Bicocca.
Graham, C., and Pettinato, S. (2000) Happiness, Markets, and Democracy: Latin America in ComparativePerspective. Center on Social and Economic Dynamics. Working Paper No. 13.
Inglehart, R. (2000) Globalization and Postmodern Values. Washington Quarterly, Winter, pp. 215-228.Kenny, C. (1999) Does Growth Cause Happiness, or Does Happiness Cause Growth? Kyklos. Vol. 51,Fase 1, 3-26.
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Lane R. (2000) The loss of happiness in market democracies. Yale Univ. Press, New Haven and London.
Marx, K.: 1970 (1857) Grundrisse der Kritik der Politischen konomie, Frankfurt am Main: EVA.
Murray, C. (1991) The Pursuit of Happiness under Socialism and Capitalism. Cato Journal, Vol. 11, 2.
Ouweneel, P. and Veenhoven, R. (1991) Cross-National Differences in Happiness. Published in:Bleichrodt, N & Drenth, P.J. (eds) Contemporary issues in cross-cultural psychology, Swets & Zeitlinger.Amsterdam, The Netherlands, pp 168-184
Peiro, A. (2001) Happiness, Satisfaction and Socioeconomic Conditions: Some International Evidence.University of Valencia, Spain.
Sullivan, O. and Gershuny, J. (2001) Cross-national Changes in Time-use: some Sociological HistoriesRe-examined.British Journal of Sociology, 52, 331-347.
Veenhoven, R. (1996) Happy Life-Expectancy: A Comprehensive Measure of Quality-of-Life in Nations.Social Indicators Research. Vol. 39, 1-58.
IX. Appendix
Source: Graham, C., and Pettinato, S. (2000)
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Fig.1 Life Cycle Happiness
2.0
2.1
2.2
2.3
2.4
1 8 2 0 2 2 2 4 2 6 2 8 3 0 3 2 3 4 3 6 3 8 4 0 4 2 4 4 4 6 4 8 5 0 5 2 5 4 5 6 5 8 6 0 6 2 6 4 6 6 6 8 7 0 7 2 7 4 7 6 7 8 8 0 8 2 8 4 8 6 8 8
Age
MeanHappy
Source: Easterlin (2005)
Fig. 2 Latin American Happiness Averages
Source: Graham, C., and Pettinato, S. (2000)
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Source: Kenny (1999)
Source: Blanchflower and Oswald (2000)
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