Emotional Prosperity Invited BJIR Annual Lecture at LSE, 2009 Andrew Oswald I would like to acknowledge that much of this work is joint with coauthors Andrew Clark, Nick Powdthavee, David G. Blanchflower, Rainer Winkelmann, and Steve Wu. I thank Andrew Steptoe, Francis Green, Justin Wolfers and Helen Urry for valuable discussions and for their kind permission to use certain later graphics. My research is supported by an ESRC professorship.
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Emotional Prosperity Invited BJIR Annual Lecture at LSE, 2009 Andrew Oswald I would like to acknowledge that much of this work is joint with coauthors.
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Emotional Prosperity Invited BJIR Annual Lecture at LSE, 2009
Andrew Oswald
I would like to acknowledge that much of this work is joint with coauthors Andrew Clark, Nick Powdthavee, David G. Blanchflower, Rainer Winkelmann, and Steve Wu. I thank Andrew Steptoe, Francis Green, Justin Wolfers and Helen Urry for valuable discussions and for their kind permission to use certain later graphics. My research is supported by an ESRC professorship.
Researchers try to understand what influences the psychological wellbeing of
(i) individuals
(ii) nations.
Is modern society going in a sensible direction?
The types of statistical sources
General Social Survey of the USABritish Household Panel Study (BHPS)German Socioeconomic PanelAustralian HILDA PanelEurobarometer SurveysLabour Force Survey from the UKWorld Values SurveysNCDS 1958 cohortBRFSS
Preferably without relying on implausibly good fortune:
England 8 Brazil 0
Stiglitz-Sen-Fitoussi Report• Bina AGARWAL University of Delhi• Anthony B. ATKINSON Warden of Nuffield College• François BOURGUIGNON School of Economics,• Jean-Philippe COTIS Insee,• Angus S. DEATON Princeton University• Kemal DERVIS UNPD• Marc FLEURBAEY Université Paris 5• Nancy FOLBRE University of Massachussets• Jean GADREY Université Lille• Enrico GIOVANNINI OECD• Roger GUESNERIE Collège de France• James J. HECKMAN Chicago University• Geoffrey HEAL Columbia University• Claude HENRY Sciences-Po/Columbia University• Daniel KAHNEMAN Princeton University• Alan B. KRUEGER Princeton University• Andrew J. OSWALD University of Warwick• Robert D. PUTNAM Harvard University• Nick STERN London School of Economics• Cass SUNSTEIN University of Chicago• Philippe WEIL Sciences Po
Stiglitz Report 2009 www.stiglitz-sen-fitoussi.fr
The Stiglitz Commission Report
• advocates a shift of emphasis from a “production-oriented” measurement system … toward broader measures of social progress.
Some cheery news:
Some cheery news:
In Western nations, most people seem happy with their lives
Some cheery news:
In Western nations, most people seem happy with their lives
The distribution of life-satisfaction levels among British people
0
5
10
15
20
25
30
35
Per
cen
tag
e o
f P
op
ula
tio
n
1 2 3 4 5 6 7
Self-rated Life Satisfaction
Source: BHPS, 1997-2003. N = 74,481
From the U.S. General Social Survey (sample size 40,000 Americans approx.)
• “Taken all together, how would you say things are these days - would you say that you are very happy, pretty happy, or not too happy?”
Typical GHQ mental-strain questions
Typical GHQ mental-strain questions
Have you recently:
Lost much sleep over worry?Felt constantly under strain?Felt you could not overcome your difficulties?Been feeling unhappy and depressed?Been losing confidence in yourself?Been thinking of yourself as a worthless person?Been able to enjoy your normal day-to-day activities?
The Warwick-Edinburgh Mental Well-being Scale (WEMWBS)
• I’ve been feeling optimistic about the future • I’ve been feeling interested in other people • I’ve had energy to spare • I’ve been thinking clearly• I’ve been feeling good about myself• I’ve been feeling confident• I’ve been able to make up my own mind• I’ve been feeling loved• I’ve been feeling cheerful
Happiness and mental well-being are of interest in themselves.
But, more broadly, there seem to be deep links between mind and body.
“Enhanced wound healing after emotional disclosure intervention”
Weinman, Ebrecht et al
BRITISH JOURNAL OF HEALTH PSYCHOLOGY Volume: 13 Pages: 95-102 Part: Part 1 Published: FEB 2008
• Participants who wrote about traumatic events had significantly smaller wounds 14 and 21 days after the biopsy compared with those who wrote about time management.
We need to understand these interconnections better.
How has the modern work on the economics of happiness proceeded?
The same phenomenon holds true at the cross-sectional level for nations.
TZA
NGA
UGA
MDA
BGD
PAKGEO
VNM
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IND
ARM
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MAR
EGY
PHL
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CHN
UKR
SLV
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BLR
BIHDZA
COL
TUR
MKD
IRN
DOM
ROMBGR
URYBRA
RUS
MEX
LVA
CHL
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HRV
LTU
POL
ARG
ESTSVK
HUN
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KOR
MLT
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GRC
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NZL
SGP
SWEGBRITA
FIN
JPN
FRA
DEUBEL
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USA
IRL
NORLUX
Australia
4
5
6
7
8
Life
Sa
tisfa
ctio
n, W
VS
Ave
rage
Sco
re (
1='D
issa
tisfie
d' t
o 10
='S
atis
fied'
)
2000 5000 10000 20000 35000 60000GDP per capita in US$ at PPP (log scale)
Life Satisfaction = -0.9 + 0.8 * Log GDP (t=8.3)World Values Survey
Life Satisfaction and GDP Per Capita
The road to nowhere?
• Growth in income is now not correlated with growth in happiness
• This is the “Easterlin paradox”
The Man Behind the Easterlin Paradox
Average Happiness and Real GDP per Capita for Repeated Cross-sections of Americans.
1.8
22.2
2.4
2.6
Mea
n H
app
iness
15
00
018
00
021
00
024
00
0R
eal G
DP
pe
r C
ap
ita
1975 1980 1985 1990 1995Year
Real GDP per Capita Mean Happiness
Life-satisfaction country averages
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
1974 1982 1990 1998 2006
ItalyIrelandGermanyNetherlands
Average GHQ Psychological Distress Levels Over Time in Britain: BHPS, 1991-2004
10.90
10.95
11.00
11.05
11.10
11.15
11.20
11.25
11.30A
vera
ge
GH
Q-1
2 (l
iker
t)
1991-1994 1995-1999 2000-2004
Might this have something to do with work getting more stressful? [Yes]
Work by Francis Green, Keith Whitfield, et al.
0
5
10
15
20
25
30
1992 1997 2001 2006
%
Males Females
Proportion of High-Strain Jobs
Green (2008) Work Effort and Worker Well-Being in the Age of Affluence
Source: Skills Survey series
What of well-being among the young?
Helen Sweeting et al
“GHQ increases among Scottish 15 year olds 1987–2006” Social Psychiatry & Psychiatric Epidemiology (2008).
Her team assesses whether life is getting more stressful for young people.
Mental strain in young Scots in 1987
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10
20
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40
50
1987 1999 2006
% 'c
ases
'
males
females
Mental strain in young Scots in 1999
0
10
20
30
40
50
1987 1999 2006
% 'c
ases
'
males
females
Mental strain in young Scots by 2006
0
10
20
30
40
50
1987 1999 2006
% 'c
ases
'
males
females
Equivalent results have been found for adults in the Netherlands, UK and Belgium.
Worsening GHQ levels through time
• Verhaak, P.F.M., Hoeymans, N. and Westert, G.P. (2005). “Mental health in the Dutch population and in general practice: 1987-2001”, British Journal of General Practice.
• Wauterickx, N. and P. Bracke (2005), “Unipolar depression in the Belgian population - Trends and sex differences in an eight-wave sample”, Social Psychiatry and Psychiatric Epidemiology.
• Sacker, A. and Wiggins, R.D. (2002). “Age-period-cohort effects on inequalities in psychological distress”. Psychological Medicine.
So there is much evidence that all this extra money we have today is not doing a lot for us.
Easterlin’s Paradox.
There has recently been a critique of Easterlin’s idea
There has recently been a critique of Easterlin’s idea
Betsey Stevenson and Justin Wolfers have argued that economic growth does buy happiness.
• New data from the Behavioral Risk Factor Surveillance System (BRFSS)
• 1.3 million randomly sampled Americans
• 2005 to 2008
• A life-satisfaction equation
Then we go to the compensating-differentials literature dating back to Adam Smith, Sherwin Rosen, Jennifer Roback, etc.
The most recent is Gabriel et al 2003.
Gabriel painstakingly takes data on
• Precipitation• Humidity• Heating Degree Days• Cooling Degree Days• Wind Speed• Sunshine• Coast• Inland Water• Federal Land• Visitors to National Parks• Visitors to State Parks• Number of hazardous waste sites
• Environmental Regulation Leniency• Commuting Time• Violent Crime Rate• Air Quality-Ozone• Air Quality-Carbon Monoxide• Student-teacher ratio• State and local taxes on property, income and sales
and other• State and local expenditures on higher education,
public welfare, highways, and corrections• Cost-of-living
Then there are 2 ways to measure human well-being or ‘utility’ across space.
Subjective and objective
Gabriel’s work assigns a 1 to the state with the highest imputed quality-of-life, and 50 to the state with the lowest.
So we need to uncover a negative association – in order to find a match.
One Million Americans’ Life Satisfaction and Objective Quality-of-Life in 50 States
-0.1
-0.08
-0.06
-0.04
-0.02
0
0.02
0.04
0 10 20 30 40 50 60
y = -0.0032082 - 0.0012154x R= 0.60938 Li
fe S
atis
fact
ion
Fully
Adj
uste
d (ie
inco
me
also
)
Objective Quality of Life Ranking (where 1 is high and 50 is low)
To conclude across US states:
There is a close match between life-satisfaction scores and the quality of life calculated using (only) non-subjective data.
Next, consider the Stiglitz Commission’s Findings
Stiglitz Report 2009: “Measures of .. objective and subjective well-
being provide key information about people’s quality of life. Statistical offices [worldwide] should incorporate questions to capture people’s life evaluations, hedonic experiences … in their own survey.” P.16. Executive Summary of Commission Report.
• Life is now more complexThe time has come to adapt our system of measurement … to better reflect the structural changes which have characterized the evolution of modern economies.
• Services dominateIn effect, the growing share of services and the production of increasingly complex products make the measurement of output and economic performance more difficult than in the past.
In this country
In this country
In 1900, there were 1 million coal miners (5% of the workforce).
• We need to measure well-being per seA… unifying theme of the report, is that the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.
• Inequality itself mattersRecommendation 7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a comprehensive way.
• Official statistics should blend objective and subjective well-being dataRecommendation 10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.
• Sustainability must be a criterion
Recommendation 11: Sustainability assessment requires a well-identified dashboard of indicators…the components of this dashboard should be … interpretable as variations of some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard
Where might research head in the future?
Biomarkers and their possible uses
An interesting border is between happiness and medicine
An interesting border is between happiness and medicine
• Is it possible that we can find physiological correlates with human well-being?
• Perhaps to broaden the standard policy goal of GDP?
Some of our latest work:
Joint with Nicholas Christakis (Harvard) and David Blanchflower (Dartmouth)
Statistical links between the heart and income and happiness.
• On average, players used up 140 calories playing the game
• Overall, the physiological changes were “similar…those … in moderate physical exercise”.
In our own work, we study physiological data -- measuring heart rate, blood pressure, fibrinogen, and C-reactive protein -- on a random sample of 100,000 English citizens.
Pulse: Average heart rate is about 72 beats per minute.
Heart-Rate Equations
Pulse and Money
We find that for every extra £40,000 pounds a year, heart rate is 1 beat a minute slower.
Interesting patterns emerge
• First, there are well-determined income gradients in (and only in) heart-rate and C-reactive protein equations.
• Second, heart rate seems to have potential as a proxy measure for mental strain, so might eventually be usable as a measure of negative ‘utility’ in an economist’s framework.
• Third, education has little effect within biomarker equations.
• Fourth, it is more important to control for diet than has been traditionally recognized in the health-economics literature.
• Fifth, biomarker variables work powerfully in well-being equations.
Thus:
There are deep connections between happiness, money and health.
Some ideas to end:
Conclusions
#1 In the next century, new measures of human well-being may be required.
Conclusions
#2 As social scientists, we probably need to understand better the connections between mental and physical health.
Conclusions
#3 Heart-rate and blood pressure data have particular potential in policy design.