Well-being and Public Policy: The Collective Pursuit of Happiness

Well-being and Public Policy: The Collective Pursuit of

Happiness

Ulrich SchimmackUniversity of Toronto Mississauga

Well-Being is a Popular Topic

Public Policy

- Rules that influence individuals’ pursuit of happiness.

- What is (ideally) the goal of public policy?

- maximize citizens’ well-being

- ensure fair distribution of well-being

- The Criterion Problem:- What is well-being? - What is fair?

Public Policy and Well-Being

http://www.stiglitz-sen-fitoussi.fr/en/index.htm

Report by the Stiglitz Commission

What is Well-Being?

A List ApproachAn individual with high well being

…A. is healthy B. is illA. is free B. is unfree

(imprisoned) A. is safe B. is threatenedA.feels happy B. feels unhappyA. is educated B. is uneducatedA. is rich B. is poor

What is well-being?

-Objective definition: optimal functioning

What is well-being?

- Subjective definition: Preference Realization The match between an individuals’ actual and ideal life.

Classic Welfare Economics

- Paul Samuelson

- 1970 Nobel laureate

- Utility / Efficient Markets

- Income- Opportunity to realize

preferences- Limited to market goods

and services

2008 Ranking of Nations (IMF Data)

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Human Development Index

- Amartya Sen

- 1998 Nobel laureate

- Capabilities

- Human Development Index- Income- Health- Education

2007 Ranking of Nations

http://en.wikipedia.org/wiki/Human_Development_Index

Subjective Indicators

- Hadley Cantril

- Public Opinion researcher

- Cantril’s Ladder (1965)- Single-Rating

0 = worst possible life10 = best possible life

Subjective Indicators

All things considered, how satisfied are you with your life as a whole these days?

Please choose a number ranging from 1 = dissatisfied to 10 = satisfied.World Value Survey Results for Canada:1982 7.841990 7.882000 7.802006 7.72

1990-2000 Ranking of Nations

http://mappingglobalhappiness.wordpress.com/2008/11/01/results/happinessmap/

Well-Being and Wealth (PPP)

00.511.522.533.544.555.56

0 5000 10000 15000 20000 25000 30000 35000 40000

Linear r = .83, log-function r = .82Source. Schimmack (2007).

Summary

- Convergent evidence from different well-being indicators (GDP, HDI, LS).

- Wealthy nations have higher well-being than poor nations.

- There is no cut-off point.

- We are lucky to live in Canada.

Variation within Nations

- Most results are based on data from other, yet similar countries (USA, Germany).

- Results could be different in Canada.

"Americans who earn $50,000 per year are much happier than those who earn $10,000 per year," writes Gilbert, "but Americans who earn $5 million per year are not much happier than those who earn $100,000 per year."

Lucas & Schimmack (2009)

How Happy are the Super-Wealthy?

- Diener et al. (1985)

- Mailed Happiness Survey to Individuals on Forbes 500 (N = 49)

LS IQ m/cm f/cmAverage 3.70 100 178 165Forbes 4.77 115 185 172

Daily Life-Satisfaction of US Americans

Money and Well-Being

Scientific Evidence- Wealthier individuals are happier- Money buys (some) happiness

Policy Implications- Progressive taxes- Universal health care

Personality and Well-Being

- Twin studies- Same genes, different lives- Similar well-being

CBS Show “Giggle Twins”

Longitudinal Stability

- Life satisfaction is quite stable over time.

- About 50% of the variation among Canadians is influenced by personality dispositions.

- Life satisfaction only partially reflects life-circumstances.

Source. Schimmack et al. (in press).

Policy Implications?

- Change dispositions - Education (Positive

Psychology)- Psychotherapy - Drugs (Prozac)

- Social Policies- Tax cheerfulness

- Ignore dispositions- Focus on external factors

Source. Knabe, A. & Raetzel, S. (2007). Quantifying the psychological costs of unemployment. FEMM Working Paper, 12, April 2007.

Unemployment and Life-Satisfaction

1972

1973

1974

1975

1976

1977

1978

1980

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1993

1994

1996

1998

2000

2002

2004

2006

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

0.2

WhiteBlack

Stan

dard

ized

Life

Sat

isfa

ctio

n

Source. Diener, Lucas, Schimmack, & Helliwell (2009).

Life Satisfaction of White and Black US Americans

Overall Conclusion

- Subjective measure of well-being are important.

- They often converge with objective indicators (wealth, unemployment, reduced prejudice).

- They do not provide simple policy solutions.

- They do not directly solve the problems of conflicting interests and sustainability.

Outlook

- Better information = better choices = better life

- Recognize and use diversity in preferences

- Accept some inevitable unhappiness