Happiness, Lottery Winners, and Your Heart Andrew Oswald Warwick University * Much of this work is joint with coauthor Nick Powdthavee. I also owe a great.

Happiness, Lottery Winners, and Your Heart

Andrew OswaldWarwick University

* Much of this work is joint with coauthor Nick Powdthavee. I also owe a great debt to the work of David G Blanchflower, Andrew Clark, Paul Frijters, and Justin Wolfers.

I would like to address 3 issues.

#1

#1

In the 21st century, should our society’s goal be happiness rather than GDP?

#2

#2

What actually happens to a person when they get a lot of money (say by winning the lottery)?

#3

#3

Could physiological measures, like heart rate and blood pressure, be used as proxies for well-being?

So is modern society going in a good direction?

So is modern society going in a good direction?

Are we getting happier?

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

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1975 1980 1985 1990 1995Year

Real GDP per Capita Mean Happiness

Life-Satisfaction Levels in European Nations

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

1974 1982 1990 1998 2006

ItalyIrelandGermanyNetherlands

What kind of data do we use in research on well-being?

The types of sources

British Household Panel Study (BHPS)German Socioeconomic PanelAustralian HILDA PanelGeneral Social Survey of the USAEurobarometer SurveysLabour Force Survey from the UKWorld Values SurveysNCDS 1958 cohort

Various statistical methods

Some cheery news:

Some cheery news:

In Western nations, most people seem happy with their lives

The distribution of life-satisfaction levels among British people

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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

But obviously life is a mixture of ups and downs

Statistically, wellbeing in panels is strongly correlated with life events

..good and bad.

Big effects

Unemployment

Divorce

Marriage

Bereavement

Friendship networks

Health

[No effects from children]

Happiness is also U-shaped over the life course

The pattern of a typical person’s happiness through life

4.9

5.0

5.1

5.2

5.3

5.4

5.5

5.6

15-20 21-30 31-40 41-50 51-60 61-70Age group

Ave

rag

e li

fe s

atis

fact

ion

sco

re

This holds in various settings

This holds in various settings

For example, we see the same age pattern in mental health among a recent sample of 800,000 UK citizens:

[Blanchflower and Oswald, Social Science & Medicine, 2008]

The probability of depression by ageMales, LFS data set 2004-2006

-0.01

-0.005

0

0.005

0.01

0.015

0.02

1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990

Year of birth

Reg

ress

ion

co

effi

cien

t

-0.014

-0.012

-0.01

-0.008

-0.006

-0.004

-0.002

0

0.002

1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990

Depression by age among females: LFS data 2004-2006Q2

Year of birth

Reg

ress

ion

co

effi

cien

t

Now what about money?

Now what about money?

The data show that richer people are happier and healthier.

For example

Di Tella et al REStats 2003 and Luttmer QJE 2005 show income is monotonic in happiness equations for 11 industrial countries.

But is there really good causal evidence?

One recent attempt (Gardner-Oswald, Journal of Health Economics

2007):

Studying windfalls is one approach:-

.

So what happens to someone who gets a largish lottery win?

Remarkably

There is no immediate effect on well-being as measured by happiness or financial satisfaction.

In our data

Strikingly, even the person who receives the equivalent of 1 million US dollars reports a fall, in time t1, in financial satisfaction (ie. satisfaction with the household’s income).

But, after three years, a large effect on satisfaction suddenly becomes apparent.

Making sense of it all

Lottery wins raise mental well-being

But the puzzle remains

But the puzzle remains

There is a delay.

The longitudinal lottery work finds the effect of a win takes one to two years to show up in mental well-being scores.

Where will research head in the future?

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:

Statistical links between the heart and income and happiness.

To clinicians

High blood pressure is potentially a sign of mental strain and low well-being

Some regression evidence

Some regression evidence

When we estimate a life-satisfaction equation

LS = f (high blood pressure, control variables)

Hypertension enters negatively in a 10,000 sample from NCDS cohort and a 15,000 sample from Eurobarometers

But how about high blood pressure as a national measure of well-being?

Across nations, hypertension and happiness are inversely correlated

(Blanchflower and Oswald, forthcoming, Journal of Health Economics)

0

10

20

30

40

50

Figure 2.The Inverse Correlation Between Hypertension and Life

Satisfaction: 16 European Nations Aggregated into Quartiles

Countries in the Countries in the lowest quartile highest quartile of blood-pressure of blood-pressure

IrelandDenmarkN'LandsSweden

SpainFranceLuxUK Austria

ItalyBelgiumGreece

E. GermanyW. GermanyPortugalFinland

P

erce

nta

ge o

f citi

zens

ver

y sa

tisfie

d w

ith t

heir

live

s

Per

cent

age

of c

itiz

ens

very

sat

isfi

ed w

ith

thei

r li

ves

Some of our latest work:

It is known that heart rate rises under stress.

Pulse and Money

We find that for every extra £30,000 a year, heart rate is 1 beat a minute slower.

We draw a random sample of 80,000 British individuals, and study their resting heart rates.

Heart-Rate Equations

Status and happiness may be protective.

Success may increase lifespan.

Two Studies of ‘Winners’

Two Studies of ‘Winners’

#1 Redelmeier and Singh, Annals of Internal Medicine, 2001

Oscar winners live 4 years longer than those merely nominated.

Two Studies of ‘Winners’

#2 Rablen and Oswald

Nobel scientists live 1.6 years longer than those merely nominated.

We took data on

We took data on

All science Nobellists and all nominees between 1901 and 1850.

Two kinds of test:

(i) Matching test

(ii) Hazard models with time-varying covariates

We also looked for effects of income from the Nobel Prize

1-2 extra years

There does seem a longevity difference between winners and mere nominees. [No income effect]

Even with the corrections for immortal time bias that we attempted.

So there is much to be understood about the mind-health links.

Some speculations to end:

#1 In the next century, new measures of human well-being will probably be required.

#2 As social scientists, we need to understand better the connections between mental and physical health.

#3 Heart-rate and blood pressure data have particular potential.

#4 Social scientists will, I believe, collaborate more with doctors and epidemiologists.

Happiness, Lottery Winners, and Your Heart

Andrew OswaldWarwick University

Papers downloadable at www.andrewoswald.com

* Much of this work is joint with coauthor Nick Powdthavee. I also owe a great debt to the work of David G Blanchflower, Andrew Clark, Paul Frijters, and Justin Wolfers.