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NiCEWorkingPaper09-110May2009
Van Hoorn, A. (2009): Measurement and Public Policy Uses of Subjective Well-BeingNijmegen Center for Economics (NiCE) Institute for Management Research RadboudUniversity Nijmegen
P.O.Box9108,6500HK
Nijmegen,TheNetherlandshttp://www.ru.nl/nice/workingpapers
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Abstract
Overthecenturies
happiness,ormorebroadly,well-beinghasbeensubjectofunremittingdebate.Recently,
measuresofso-calledsubjectivewell-being(SWB;e.g.self-reportedhappiness)havegainedprominenceand
arereceivingincreasingattentionfromscientists,policymakersandthepublicalike.Aconsensusappearstobeemergingthatpeoplesself-assessmentofhowwell
lifeisgoing
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canconveyimportantinformation,inparticularon
underlyingemotionalstates.ThispaperintroducesmeasuresofSWB,examiningwhetherthe
measuresaremeaningfulandvalid,andexploringapossibleroleinshapingand
appraisingpublicpolicy.ThefirstpartelaborateswhatSWBmeansanddiscussessomeoftheindicatorsusedtomeasuretheconstruct.Specialattentionispaid
tothequality
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ofdifferentSWBmeasures,i.e.theirreliability
andvalidity.SWBappearstobelargelydefinedthroughthespecificindicators
usedtomeasureitbutthatisnottosaythatthesemeasures
arenotcapturingsomethingimportant.Inthesecondpart,severalpossibleusesofSWBinthemakingofpolicyarediscerned:(1)SWBasan
explicitpolicytarget;
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(2)SWBasacomplementtoexisting
measuresofwell-being;(3)SWBasameasuringrodincost-benefitanalyses;
and(4)theuseofSWBintheconstructionofpovertystatisticsand
equivalencescales.ThebroadconclusionthatemergesisthatSWBindeedcanhelpshapeandappraisepublicpolicy.ThisholdsdespitethefactthatSWB
researchstillhas
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importantgaps.Whatismore,futureresearch
promisestosecurefurthertheusefulnessofSWBresearchinpolicyapplications,
notleastasimprovementsinmeasurementtakehold.
AndrvanHoorn,
RadboudUniversityNijmegen,DepartmentofEconomics,Tel:+31243612344,Fax:+31243612379,E-mail:[email protected]
wasatrainee
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attheStatisticsDirectorateoftheOrganisation
forEconomicCo-operationandDevelopment.HelpfulcommentsbyJonHall,Anat
ItayandRamziMabsoutaregratefullyacknowledged.Ofcourse,theviewsexpressedin
thispaperaretheauthorsonly.
1
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1.INTRODUCTIONMeasuresofsubjectivewell-being
(commonlyabbreviatedasSWB)or,inmorepopularterms,happiness,area
contemporarycontributiontoanage-olddebate.Interestinhappinessanditspursuit,or
moregenerallywhatmakesforagoodlife,startedatleasttwomillenniaagowithAristotle(384-322BC)and,later,Epicurus(341-270BC).Others,including
ThomasAquinas,David
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HumeandJeremyBenthamcontinuedandadded
tothedebate.Theconsensuswasthathappinessmatters.Infact,many
wentsofarastoclaimthat,ultimately,happinessisallthatmatters.1
However,massiveconceptualdifficultiessuggestalessstrongconclusion:maximisingtheexperienceofhappiness,andrelatednotionslikeflourishing,joyorpleasure,whilstminimisingpainful
episodes,isthe
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quintessentialmotiveunderlying
2
humanbehaviour.
Giventhewidespreadrecognitionoftheimportanceofhappiness,
thestudyofSWBhasasurprisinglyshorthistory(cf.Kahnemanetal.,
1999;Sirgyetal.,2006).SystematicresearchofSWB,inparticularintoitscorrelatesandcauses,didnotstartuntilthesecondpartofthe
20thcentury(Fellows,
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1966andWilson,1967presentearlyoverviews).3
Theliteraturehasbourgeonedsincethenthough.First,psychologistsandothersocial
scientistshavetakenhugestepsintheirunderstandingofthefactorsinfluencingpeoples
SWB.4Second,themeasurementofSWBhasdrasticallyimproved,whichitisexpectedtocontinuetodowiththespreadinguseofadvancesininformation-and
communicationtechnology.In
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importantways,then,SWBresearchhasproven
itselfaseriouscontenderinthewiderdisciplineof
1
Short,butmoreelaborateaccountsofthehistoryofthehappinessdebatecan
befoundinMcMahon(2004).Angner(2005)providesamorethoroughoverviewofphilosophicalissuesrelatedtotheconceptofhappinessor,moregenerally,well-being.
KingandNapa
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(1998)presentevidencethatpeopleindeedattach
greatvaluetohappiness(seealsoDieneretal.,1998andDiener
andOishi,2004).2Forsomecommonphilosophicalconceptualizationsofhappinessandwell-being,
seeBlackburn(1996)andWalsh(2005).3SWB,ourpreferredtermforreasonsdetailedbelow,isactuallyabroadernotionthanjusthappiness(see,for
example,Diener,2006).
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Happiness,however,isthemorefamiliar,and
certainlycatchier,termoftenusedtorefertothewholeconstructof
SWB.4Diener(1984,1994),Dieneretal.(1999),Easterlin(2003),Freyand
Stutzer(2002),Nettle(2005)andLayard(2005)provideoverviewsofthisliterature.
2
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socialscience,capableofprovidingvaluable
informationonanessentialaspectofpeopleslivesandsocietiesasa
whole.Assuch,itsolicitsincreasingattentionofpoliticians,governmentofficialsandthe
publicalike.
ThispaperintroducesmeasuresofSWBandexplorestheirapplicationsinpolicymaking.Specificattentionispaidtothequestionwhether
indicatorsofSWB
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aremeaningfulinthesensethatthey
provideimportantandusefulinformationonhowwellpeopleorsocietiesas
awholearedoing,andhowthisinformationcansubsequentlybeusedto
shapeandappraisepublicpolicy.Theorganisationofthepaperissimple.ItstartsbyelaboratingwhatismeantbythetermSWBinSection
2.Section3
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subsequentlydiscussessomeactualindicatorsofSWB
andSection4looksatthereliabilityandvalidityofSWBmeasures.
somepublicpolicyusesofSWBareconsideredinSection5andto
concludeSection6givessomefinalandsummarizingthoughts.
2.WHATISSUBJECTIVEWELL-BEING?Aconsensushasgraduallyemergedmainlyfromthepsychological
literaturearounda
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workingdefinitionofSWB.Wecandefine
SWBaspeoplespositiveevaluationsoftheirlives,which,inturn,includes
positiveemotion,engagement,satisfaction,andmeaning(DienerandSeligman,2004:p.1).As
thissectionshows,however,theconceptissomewhatmorecomplicatedthanthat,buttheessentialfeatureofSWBis,ofcourse,thatitisnot
anobjectivemeasure:
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Notablyabsentfromdefinitionsof
SWBarenecessaryobjectiveconditionssuchashealth,comfort,virtue,orwealth.
AlthoughsuchconditionsareseenaspotentialinfluencesonSWB,theyarenot
seenasaninherentandnecessarypartofit.(Diener,1984:pp.543-544).
TwoadditionalhallmarksofSWB,nexttoitssubjectivity,are
that:
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1.apositiveratingrequiresnotonly
positiveexperiencesbutalsotheabsenceofnegativeones;and2.reported
scoresincludeaglobalassessmentofhowwellpeoplethink(feel)theirlife
isgoingandisnotlimitedtooneormoredomainsorspecificperiods(Diener,1994:p.106;seealsoDiener,1984).3
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Lookingatthelattertwofeatures
ofSWBinmoredetail,weseethattheysuggestthatsubjective
well-beingisactuallyanumbrellaterm,comprisingdifferentelementsofpeopleslives.The
SWBliteraturehasbrokendownpeoplesjudgementsoftheirlivesalongthelinesindicatedaboveandintotwodistinctivecomponents(cf.AndrewsandWithey,1976:
p.18;Veenhoven,
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1984:p.25).Thefirstcomponentis
theaffectivepartofoverallSWBandreferstoboththepresence
ofpositiveaffectandtheabsenceofnegativeaffect.Thispartisan
evaluationguidedbyemotionsandfeelings.Acognitivepartconstitutesthesecondcomponent.Itisaconscious,information-basedappraisalofoneslifeforwhichpeople
judgetheextent
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towhichtheirlifesofarmeasures
uptotheirexpectationsandresemblestheirenvisionedideallife.
Researchersinthefieldoftenmakeadistinctionbetweenhappinessandlifesatisfaction.
HappinessissometimesusedtodenotetheaffectivepartofSWB(whichinturnmustbedecomposedinpositiveaffectandnegativeaffect),andlife
satisfactionasthe
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cognitivepart.5Thislabellingisnotuniversal,
however,andpeoplecommonlyusehappinessandlifesatisfactionsynonymouslywithSWB.
Whileoftenclearfromtheparticularcontext,theambiguoususeofterminologyhappiness,life
satisfactionandSWBdoesrevealthatthefielddoesnotyetagreeonanyonedefinitionforitsover-archingsubjectmatter.Subjectivewell-being,however,isarather
moreaccuratedescription
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ofthebroaderfieldunderdiscussionhere
and,accordingly,thispaperusesthetermSWBthroughout,notingthatit
isanumbrellatermthatincludesbothsatisfactionandhappiness,howeverdefined(cf.
Diener,2006;seealsonote3).
UnderlyingthedefinitionofSWBasapersonalevaluationofoneslifeistheideathatit
isnotuncommon
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forpeopletomakesuchaffectiveand
cognitivejudgments(Diener,1994:pp.106-107).Stateddifferently,peoplecontinuouslyevaluatetheir
lifeandaspectsofit,judgingwhichelementsarevaluableanddesirableand
whicharenot.TheaffectiveandthecognitivecomponentofSWBsubsequentlyshareacommoncorebutdifferinimportantrespectsaswell.Lifesatisfaction
andhedoniclevel
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arelikelytocorrelatebecausebothare
influencedbyappraisalsofoneslifeevents,andactivities,andcircumstancesDiener
(1994:
p.107)notes,butatthesametime,lifesatisfaction
andhedoniclevelarelikelytodiverge5See,forinstance,thediscussioninLyubomirskyetal.(2005:pp.820-822).Thisassociationislikelyto
haveitsroot
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inthehedonicconceptualisationofhappinessas
pleasureandtheabsenceofpainthatcanbefoundinthe
workofJeremyBenthambutisalsocommonintheSWBliterature(e.g.
Kahneman,1999andLayard,2005).
4
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becauselifesatisfactionisaglobal
summaryofoneslifeasawhole,whereashedoniclevelconsistsof
ongoingreactionstoevents(andmayalsobeinfluencedbyunconsciousgoalsand
biologicalfactorswhichmayinfluencemood).
RecentworkbyKahnemanandKrueger(2006:p.14)confirmsthisview.Theyfindthatnet(positive
minusnegative)affect
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andreportedlifesatisfactionareindeedpositively
correlated,butdifferinthefactorsinfluencingthem.Income,educationandmarital
statusarebetterpredictorsoflifesatisfactionthanofaffect,forinstance.Likewise,
dataondailyactivities,e.g.commuting,watchingTVandcooking,seemtomattermorefornetaffect(seealsoCampbelletal.,1976).
Butmeasuresof
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SWBneednotrefertolifeas
awhole.Rather,onecaninvestigateseparatelywhethersomeoneishappyor
satisfiedwithdifferentdomainsoflife,suchaswork,familylife,financialsituation
orhealth.Onewouldexpectthatsomeonewhoissatisfiedwithallrelevantaspectsofhisorherlife,willjudgelifeasawhole
favourableaswell.
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Forexample,AndrewsandWithey(1976:p.
127)findthatsatisfactionwithfamily,money,amountoffun,housing,national
governmentandso-calledself-efficacymakesuphalfofallthevarianceinreported
lifesatisfaction.Theexactrelationbetweendomainsatisfactionandglobalsatisfactionisunknown,however.Thatis,itisnotclearwhetherpeopleevaluatetheirlife
bylookingat
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specificaspects(thebottom-upapproach)orwhether
theglobaljudgmenttricklesdowntolower-levelappraisals(top-down)(Veenhoven,1996:p.
23and1997:pp.19-20;seealsoSirgyetal.,2006:p.426).
DienerandSeligman(2004:p.12)reviewevidenceoflower-levelsatisfactionspillingovertohigher-levelsatisfaction,butalsobetweendomains,i.e.jobsatisfactionspillsover
tomaritalsatisfaction.
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Toreturntothedefinition
ofSWB,itisclearthat,asmentioned,thefieldlacksa
single,comprehensivedefinition.Dieneretal.(1999:p.277)findthatsubjectivewell-being
isabroadcategoryofphenomenathatincludespeoplesemotionalresponses,domainsatisfactions,andglobaljudgementsoflifesatisfaction(cf.DienerandSeligman,2004:p.
1).Thisis
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notauniversaldefinitionbutrathera
descriptionofwhatSWBcomprises.Theabsenceofaclear-cutdefinitionreflects
that,asaconcept,SWBhasnoprecisetheoreticalbasis.Indeed,thefield
appearslargelydrivenbyempiricalwork,andSWBisconceptualisedthroughthespecificindicatorsused,i.e.bythespecificquestionsasked.Thenextsectionelaborates
themeasurementof
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SWB.
3.MEASURINGSUBJECTIVEWELL-BEING
5
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3.1Single-itemscalesSincethefirst
systematicanalysesofSWBsomefivedecadesago,alargenumberof
SWBmeasureshavebeendeveloped.Themostwidespreadofthesearealsothe
moststraightforward.Questionnairessimplyaskpeopletostatehowhappyorsatisfiedtheyare(withtheirlifeasawhole).Twowell-knownexamplesofsuch
single-itemquestions,used
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inthefamousWorldValuesSurvey(European
ValuesStudyGroupandWorldValuesSurveyAssociation,2006),are:
Takingallthingstogether,wouldyousayyouare:1Very
happy2Quitehappy3Notveryhappy4Notatallhappy
and
Allthingsconsidered,how
satisfiedareyou
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withyourlifeasawholethese
days?
123456789
10
DissatisfiedSatisfied
Othersingle-itemquestionsexist,butthe
basicmethodofmeasuringSWBiscapturedbythesequestions.Toaddressspecificissues,suchassatisfactionwithadomain,thestandardapproachcanbe
adaptedtoask,
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forinstance,Overall,howsatisfiedordissatisfied
areyouwithyourjob/homelife/financialsituation?
3.2Multi-itemscalesSinceSWBisabroadcategoryofphenomena(cf.
Dieneretal.,1999:p.277),oneshouldnotexpectsingle-itemquestionstobeabletoprovideanall-encompassingindicatorofpeoplesevaluationoftheir
lives.Indeed,it
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wouldbeinfeasibletohaveasingle-item
6
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normallyconsideredmorereliablethanthoseof
single-itemmeasures(seealsoSection4onreliabilityandvalidity).Accordingly,a
broadarrayofmeasuresexists(see,forexample,Veenhoven,1996:pp.3-4).Here
wediscusstwooften-usedscales,thoughmanymoreexist,eachwiththeirownstrengthsandweaknesses.
3.2.1PositiveandNegativeAffectSchedule(PANAS)
ScalesThePositive
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andNegativeAffectSchedule(PANAS)scales(Watson
etal.,1988)aredesignedspecificallytomeasurepositiveandnegativeemotions.
ThePANAScaneasilybetailoredtoincludelessormorefeelingsor
bebroaderornarrowerinitscoveroftimeperiods.Itasksabouttheexperienceofcertainemotionalstates:
Thisscaleconsistsof
anumberof
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wordsthatdescribedifferentfeelingsandemotions.
Indicatetowhatextent[youfeltthiswayduringthepastweek].
Usethefollowingscaletorecordyouranswers:
1Very
slightlyornotatall2Alittle3Moderately4Quiteabit5Extremely
___Interested___
Distressed___Excited
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___Upset___Strong___Guilty
[Etcetera]
7
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Theoverallratingisobtainedby
aggregatingtheanswerstothedifferentstates.
3.2.2SatisfactionWith
LifeScale(SWLS)TheSatisfactionWithLifeScale(SWLS;Dieneretal.,1985;
seealsoPavotandDiener,1993a)isanexampleofamulti-itemmeasureofSWBthatlimitsattentiontoaspecificaspectofSWB,in
thiscaselife
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satisfaction.Thequestionnaireforthisscalereads
asfollows:
Belowarefivestatementsthatyoumayagree
ordisagreewith.Usingthe1to7scalebelowindicateyouragreement
witheachitembyplacingtheappropriatenumberonthelineprecedingthatitem.Pleasebeopenandhonestinyourresponding.
1
Stronglydisagree
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2Disagree3Slightlydisagree
4Neitheragreenordisagree5Slightlyagree6
Agree7Stronglyagree
___Inmostwaysmylife
isclosetomyideal___Theconditionsofmylifeareexcellent___Iamsatisfiedwithmylife___SofarIhave
gottentheimportant
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thingsIwantinlife___If
Icouldlivemylifeover,Iwouldchangealmostnothing
Theanswerstothesefivequestionsaresummedtoobtainanoverall
rating:
59Extremelydissatisfied1014Dissatisfied1519Slightlydissatisfied20Neutral21
25Slightly
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satisfied2630Satisfied8
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3135Extremelysatisfied
TheconstructmeasuredbytheSWLScloselyresemblestheoneunderlyingthe
single-itemlifesatisfactionquestiondiscussedabove.ThedifferenceisthattheSWLSprovides
amorereliablemeasureoflifesatisfaction(seeSection4),butisobviouslymorecostlytocollectbothintermsofadministrationcostsandrespondent
burden.
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al.,2004a,2004b).
3.3.1Experience
SamplingMethod(ESM)orEcologicalMomentaryAssessment(EMA)ESMisamethod
toobtainself-appraisals.Individualsareaskedrepeatedly,oftenoverrandomintervalsandfor
aprolongedperiod,tomakeacertainassessment,whichcanrangefromfillinginquestionnairesliketheonesjustdiscussed,butcanalsoinvolvephysiological
tests(e.g.blood
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pressurelevels,heartrates).Theessentialfeatures
ofESMarethatthequestionsandevaluationsaremadefrequently,about
thetimeperiodthathasjustelapsedandinrespondentsday-to-daysurroundings.It
is,infact,thesequalitiesthatdroveESMsdevelopmentinthefirstplace.AsStoneetal.(1999:pp.27-28)pointout:(i)studyingindividuals
intheirtypical
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adesignatedintervalandforastipulated
amountoftime(e.g.onereporteveryotherhour);6Famousis
thephenomenonknownaswhite-coathypertensioninwhichrespondentsbloodpressurelevelsare
elevatedwhenmeasuredbymedicalpersonnelbutnotwhenmeasuredathomebythemselves(Stoneetal.,1999:pp.27-28).
9
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2.Event-contingentsampling:subjectsfileself-reports
whenapre-specifiedeventtakesplaceorhastakenplace(e.g.a
reportaftereverysocialencounter);and3.Signal-contingentsampling:subjectsgivetheirself-reports
whenpromptedbyarandomly-timedsignalthisistheformofsamplingthatistypicallylabelledESM.ESMandEMAareoftenequated(Scollonetal.,
2003:p.7).
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ButStoneetal.(1999)distinguishESM
fromecologicalmomentaryassessment(EMA)onthegroundsthatEMAalsocollects
informationaboutenvironmentalcircumstanceswhiletheformerisonlyinterestedinrespondentsself-evaluation.
ESMcanbeundertakeninseveralways.Fortheself-appraisalanyscaleormeasureofSWBwilldo;simplychoosetheonethat
bestcapturesthe
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andthesecomewithimportantadvantages.Automated
questionnairesarereadilyavailableandcompletedreportscanbeanalysedinstantly.
Unsurprisingly,thebenefitsofferedbyESMandEMAintermsofcoverage,
ecologicalvalidityandreliabilitycomeatacost.Usingthesemethodsandobtainingregular,virtuallyonlineself-assessmentsismuchmoreexpensivethantheuseof,
say,one-timequestionnaires,
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andthefinalchoiceofsurveyinstrument
requirescarefulconsideration.7
3.3.2DayReconstructionMethod(DRM)TheDay
ReconstructionMethod(DRM)isanotherspecificapproachtocollectreportedSWB.Itshares
manyoftheadvantagesoftheothermethods,butappearseasiertoimplement.Thetechniquerequiresrespondentstoreportabouttheprecedingdayandevaluate
itsvariousepisodes
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(e.g.hours).Kahnemanetal.(2004a)first
appliedhistechniqueandtheirquestionnaireisalongtheselines:
Howdidyoufeelduringthisepisode?
7AccordingtoStoneet
al.(1999:p.30)ESMorEMAisparticularlyappropriatetomeasurepainandsymptomsofpatients.
10
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Pleaserateeachfeelingonthe
scalegiven.Aratingof0meansthatyoudidnotexperience
thatfeelingatall.Aratingof6meansthatthisfeelingwas
averyimportantpartoftheexperience.
Happy0,Notatall6,VerymuchFrustrated/annoyed0,Notatall
6,Very
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muchDepressed/blue0,Notatall
6,Verymuch[Etcetera]Again,however,themethodleavesopen
theuseofdifferentmeasuresofSWB.
3.4DiscussionThereview
aboveshowstherearemanyapproachestothemeasurementofSWB,eachwiththeirownbenefitsanddrawbacks.Thedifferentapproachesalsoshareanimportant
commonality:whateverquestion,
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noneentailshappinessorsatisfactionina
well-definedform.MeasuresofSWBsimplydepicthowpeopleevaluatetheirlives
oraspectsthereofinresponsetoquestionsaskingthem,forinstance,howhappy
orsatisfiedtheyare.TheexistenceofvariousapproachestomeasuringSWBindicatesthatthefieldhasnotsolvedtheelusivequestionofwhatis
happiness(nordoes
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itgenerallyclaimtohavedoneso).
Itmerelycontributestotheage-oldresearchprogrammeonthegoodlife
andhumanbettermentbyanalysingempiricalconstructsSWBresearchersfeelhaveimportantbearing
onthisissue.Accordingly,andasalludedtointheprevioussection,thefieldischaracterisedbymeasurementbeforeorwithouttheorytoparaphrasea
long-standingdiscussionin
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economics.8Animportantquestioniswhetherreported
happinessorlifesatisfactionscoresaremeaningful.Thepaperturnstothis
questionnext.
4.ARESWBMEASURESMEANINGFUL?ForSWBmeasuresto
bemeaningfultheyshouldbevalid(thatistheyshouldcapturethephenomenonofinterestthattheypurporttomeasure)andreliable(thatisthey
should
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8See,forinstance,Prescott(1986)and
especiallyKoopmans(1947).
11
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measureitaccurately).Agooddeal
ofworkhasbeendonebySWBresearcherstoinvestigate
9
this.
4.1ReliabilityThereliabilityofanindicatorcanbe
definedasitsoverallquality,i.e.itsconsistencyanditsabilitytogivethesameresultsinrepeatedmeasurement.Onegoodmeasureofanindicators
reliabilityisits
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test-retestcorrelation(LarsenandFredrickson,1999:p.
43).10Thatis,thelevelofsimilarityobtainedbymakingthesame
measurementtwice,separatedbysometimeperiod.Itiswellknownthatminor
differencesincircumstancesandtechnicalfeaturesofthespecificquestionnaireusedcanaffectthereportedlevelofSWBhoweverdefined(seeSchwarzandStrack,1999:
p.62).Correspondingly,
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discussestheeffectofthelagbetween
timesofaskingontest-retestcorrelation:ifrespondentsareaskedtwicein
thesameinterviewcorrelationsareapproximately0.70;ifthelagspansaweek
test-retestcorrelationdropstoabout0.60.Hepointsout,however,thatpeopleseldommakelargemoves,e.g.fromsatisfiedtodissatisfied.Finally,adetailedstudy
byEhrhardtet
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al.(2000)examinespaneldataforGermany
fortheperiod1984-1994.Theyfindthatatthestartofthe
sampleperiodtheyear-to-yearcorrelationwas0.45butthat,forunknownreasons,it
graduallyincreasedto0.54.Atthesametime,however,thecorrelationbetweenSWBreportedin1984andthatreportedin1994wasonly0.29.This
suggeststhatthe
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measureisreliablebutissusceptibleto
changeaswell,forinstanceinresponsetochangesinobjectivecircumstances.
9Forsurveysofmuchofthevalidationexercises,see,amongst
others,BlanchflowerandOswald(2004),DiTellaandMacCulloch(2006),Diener(1984,1994),Dieneretal.(1999),DienerandSuh(1999),FreyandStutzer(2002),
KahnemanandKrueger
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(2006),Nettle(2005)andLayard(2005).10
Incaseofmulti-itemmeasures(seediscussionbelow),reliabilitycanbeassessed
furtherbylookingattheinternalconsistencyorhomogeneityofthespecificmeasures,
thatis,byanalysingtheextenttowhichthedifferentitemsofthescaleindeedmeasurethesameunderlyingconstruct(LarsenandFredrickson,1999:p.
43).
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also,andmorefundamentally,bythespecific
measurementscaleused.Studiesshowthatthemoreadvancedmeasures,suchas
multi-itemquestionnaires,producemorereliableSWBscores(seetheoverviewinKruegerand
Schkade,2008).Inaddition,test-retestcorrelationislikelytobelowerforindicatorstargetingtheaffectivepartofSWBthanforindicatorsaimingtomeasure
thecognitivepart.
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Thus,measuresofhappinessmaybemore
susceptibletowhimsicalcircumstancestheoutcomeofasoccermatchandtheweather,
whetheritisrainyorsunny,arefamousexamples(SchwarzandStrack,1999:
p.62)thanmeasuresoflifesatisfaction(KruegerandSchkade,2008).
4.2ValidityValiditycomesinmanysizesandshapes.Initsregularuse,
validitydenotesso-called
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constructvalidity(LarsenandFredrickson,1999:p.
44).Ameasurehasconstructvalidityifitisindeedableto
capturetheconstructthatitisintendedtocapture.Twoimportantaspectsthat
cancontributetoanindicatorsoverallconstructvalidityareitsconvergentvalidityanditsdiscriminantvalidity.Convergentvalidityreferstothecorrespondencebetweentheindicator
ofinterestand
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otherindicatorspurportingtomeasurethesame
construct.Ifthemeasureofinterestistohaveconvergentvaliditythe
resultsobtainedshouldconvergeontheresultsobtainedusingtheseothermeasures;thus,
convergentvalidityishighifdifferentmeasuresof,say,positiveaffectgivesimilarresults.Discriminantvalidityconsidershowwelltheindicatorcorrelates(or,usually,fails
tocorrelate)with
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measuresthatmeasuresomethingdifferent.
TheSWBliteraturepaysalotofattentiontothevalidityof
itsmeasures(seenote9).Theconclusionofthereviewsisthatmeasures
ofSWBdoquitewellonthevariousdimensionsofvaliditymentionedabove.Table1belowpresentsabriefoverviewofsomecommonlycitedevidence
onthevalidity
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Table1:ValidityofSWBmeasures
StudyMainfindingsAndrewsandCrandall(1976)Differentsingle-itemmeasures
ofSWBgivesimilarresults,andofthetotalvarianceinsingleitems
about64%isvalidvariance.12Validitycanbeincreasedfurtherusingcompositemulti-itemindicators;afive-itemscalewouldtypicallyhaveabout80%validvariance.Costa
andMcCrae(1988)
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Self-reportedSWBscoresshowconvergencewithreports
filedbyspouses.Dieneretal.(1991)Self-reportedlevelsofSWBconverge
onthosereportedbyothers(e.g.byfamilyandfriends).Ekmanetal.
(1990)Subjectivereportsontheexperienceofpositiveemotionsduringanexperimentcorrelatedwiththenumberofgenuinesmiles(referredtoasDuchennesmiles)that
occurredduringthe
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betweenpositiveoverallSWBontheone
handandneuroticismandself-reportedsymptomsontheother.Strongpositivecorrelations
arefoundbetweenoverallSWBandratingsforseverallifedomains,suchas
friendship,lovelifeandfinancialsituation.PavotandDiener(1993b)Self-reportedSWBcorrelateshighlywithpeerreports,thepersonalitytraitsofextraversionandneuroticismbut
notwithcurrent
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mood.Contexthasaslighteffecton
reportedscoreswhensingle-itemmeasuresareusedbutmultiple-itemscalesappearlargely
immune.
12Thevalidvarianceiscausedbythedifferencein
SWBasactuallyperceivedbythedifferentrespondents.Othervarianceresultsfrommeasurementerror,forinstance,fromrespondentsentertainingadifferentinterpretationoftheresponse
categories(beingvery
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thespecificmeasureused).SeidlitzandDiener
(1993)ForpeoplewithhigherSWBscores,memoriesofhappyeventsare
moreaccessiblethanforpeoplewithlowerSWB,whilecurrentmoodhasonly
amodesteffectontheavailabilityofmemories.WatsonandClark(1991)Thereisastrongcorrelationbetweenself-reportedscoresoneightdifferentnegativeaffect
andpositiveaffect
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scalesandratingsbypeers.
FurtherconfirmationofthevalidityofSWBmeasurescomesfromthelarge
literaturethathasrelatedSWBtoawiderangeofothervariables.Researchers
havefoundthatnumerousfactors,bothobjectiveandsubjective,correlatehighlysignificantlywithSWB(forrecentsurveysoftheevidenceseeArgyle,1999,DiTella
andMacCulloch,2006,
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DienerandSuh,1999,Dieneretal.,
1999,Easterlin,2003,FreyandStutzer,2002,Layard,2005,Lyubomirskyetal.,
2005andNettle,2005).Factorsincludeindividualcircumstancessuchashealth,personalincome,
employmentstatusandsocialrelations,buttherearelinkswithsocietalfeaturestoo.Notably,cross-countryevidencefindsthatsuchfactorsaspoliticalfreedom,grossdomestic
product(GDP)per
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capita,environmentalqualityetceteraallcorrelate
withaverageSWBreportedbycitizensfromdifferentcountries.Thesefindings,and
manymorelikethem,providefurtherevidencethatmeasuresofSWBappearto
capturesomethingimportant.Thatis,SWBmatters.
TheapparentpervasivenessofresearchvalidatingmeasuresofSWBnotwithstanding,someimportantcriticalremarkshavealso
beenmade.Whimsical
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circumstancesliketheoutcomeofasoccer
matchinfluencethelevelofSWBpeoplereport(SchwarzandStrack,1999:
p.62).SucheffectsobviouslyareanimportantweaknessofSWBmeasuresand,
infact,othersurveydata(cf.BertrandandMullainathan,2001).Theerrorsgenerallyseemtobeofarandomratherthanastructuralnature,however,
workingbothto
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increaseanddecreaseSWBscores.Consequently,the
measuringinstrumentisunlikelytobesystematicallybiased.Indeed,usinglargeenough
sampleswouldgoalongwayinaddressingpossibleproblems
15
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introducedbycontextualfactorsinfluencingthe
reportedlevelofSWB.13AndthisistheadvantageofusingESM,
EMAorDRM:usingrepeatedmeasuresofSWBforasingleindividuallessens
theinfluenceofminorlifeevents.
AnotherchallengeSWBindicatorsfaceconcernstheirvalidityincross-nationalcomparisons.Heretheissueisthepossible
impactofculture
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andlanguageonSWBratings(seeDiener
andSuh,2000:pp.5-9forashortintroductiontotheseissues;
seealsoWierzbicka,2004).BytheverynatureofSWBandtheway
itismeasured,i.e.throughquestionnaires,culturalandlinguisticfactorscanaffectSWBratings.AsWierzbicka(1999:
p.31)putsit,feelingsrepresent
thesubjectiveexperience
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ofbiological(physiological)events,buttheycan
becategorizedinavarietyofways,andtheyarecategorizeddifferently
indifferentcultures.SWBmaythusbesusceptibletoinfluencesthatdiffersystematically
overcountries,meaningthatmeasuredlevelsofSWBcanbestructurallybiased.Evidenceonthisissueisnotoverwhelming,however.Languagegenerallydoesnotseem
toposemuch
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ofaproblem.Sometentativeevidencecomes
fromInglehart(1990,pp.28-29).Helooksataveragelevelsofself-reported
lifesatisfactionforGerman-speaking,French-speakingandItalian-speakingSwissrespectively,andfindsthatfor
allSwissaveragescoresarehigherthanthescoresoftheirlinguisticcounterparts,peoplefromGermany,FranceandItalyrespectively.Moreconvincingly,OuweneelandVeenhoven
(1991)compareself-reports
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acrosslanguagegroupsinbilingualnationsand
donotfindareliablelanguageeffect.Inaddition,theyfindthat
thepercentageofdontknowanswerstoSWBquestions(ignorance)doesnotdiffer
muchbetweencountries.
Culturalcharacteristicswouldappeartobeamoreimportantfactorandpossiblesourceofbias.Uchidaetal.(2004)review
theavailablecross-cultural
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evidenceonSWBandfindculturaldissimilarities,
notablyinthepredictorsofSWB.Moreconcretely,Scollonetal.(2004)
examinethreedifferenttypesofglobalself-reportsofpleasant/unpleasantemotionsforpeoplefrom
fivegroupswithdifferentculturalbackgroundsandfindthatforallmeasurescultureisasourceofresponsedifferencesbetweenthegroups.Vittersetal.
(2005)finda
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13Boulding(1972:p.466)
describesthiseffectofthelawoflargenumbersasfollows:Even
ifwecannotgetveryreliablemeasuresfortheindividual,bythefamous
principlewhichIhavesometimescalledKatonasLaw,thatthesummationofignoranceproducesknowledge,wemayfindanoperationorinstrumentwithself-cancellingrandom
factorswhichwill
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giveusamuchbettermeasurefor
ahundredorathousandindividualsthanwecangetforone.
16
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similarresultintheiranalysisof
lifesatisfactiondatafromNorwayandGreenland.Overall,noclearpictureemerges,
however,because,forexample,Dieneretal.(1995)discardaculturalexplanationfor
particularobserveddifferencesinSWB(evenwithincomecontrolledfor).Specifically,humilityandsocialdesirability(wherepeoplegivetheanswerstheythinkotherswillregard
favourably)donot
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SWBisdifferentiallystructuredintermsof
itspredictorsdoesnotbyitselfmeanthatthemeasureissomehow
biased.Incontrast,theeffectofculturemaybegenuine.Alesinaetal.
(2004),forexample,reportthatSWBscoresofEuropeanssuffersmorefromincomeinequalitythantheSWBratingsofAmericans(seealsoDiTellaand
MacCulloch,2006:pp.
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39-43).Otherstudiesfindmarkedheterogeneityin
thepredictorsofSWBacrosscountrieswithindividualisticculturesandthosewith
morecollectivistcultures(Suhetal.,1998;Oishietal.,1999).Inthis
sense,culturalandlinguisticfactorsareclearlynotasourceofbiasincross-countrycomparisonsanuisancewemaywanttodisposeofbutrathertherole
ofthesefactors
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inreportedSWB,byitself,isinteresting
andworthyofattention.
Relatedresearchhaslookedmoredirectly
atemotionsthatareeithersharedby,oruniqueto,differentcultures.For
instance,Ekmanetal.(1987)findthatthereiscross-culturalagreementbothonthetypeofemotionsexpressedinfacialimages(e.g.sadnessorjoy).
Resultsfromthis
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andculturalborders.14
14Some
culturallyrootedbiasisunavoidableinmanyindicatorseven,forexample,in
thecomparisonofnationalincomenumbers.Despiteacommondefinition,thesestatisticsare
influencedbyhabitsandcustomsregardingwhatactivitytakesplacethroughthemarket(cf.Frankel,1953).Asanillustration,takeRosens(1996:pp734-5)observation
that:[i]nSweden
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alargefractionofwomentakecare
ofthechildrenofwomenwhoworkinthepublicsectorto
carefortheparentsofthewomenwhoarelookingaftertheirchildren.
17
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4.3Moreonthemeaningof
SWBThefindingsfromtheSWBliteraturepresentedabovesupporttheconclusion
thatSWBmeasuresaremeaningful.Butthereislessevidenceaboutthemeaning
ofthesemeasures,otherthanthattheyarecapturingsomethingimportant.SWBremainslargelyanabstractconcept.Twoadditionallinesofresearchtacklethisissue.
First,
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withobjectivevariablesthathaveasolid
biologicalfoundation.
Thesecondlineofresearchgoesbeyondsimple
correlatesofSWB,andlooksatthecausallinksbetweenlevelsofSWB
andotheroutcomes.ThecurrentlevelofreportedSWBisfoundtohavesubstantialpredictivepowerforsomeimportantaspectsofwell-being.Forinstance,Cohen
etal.(1995)
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reportthatthelevelofSWBof
healthypeoplemeasuredbeforeexperimentallyinducinganillnessthroughexposuretoa
respiratoryviruspredicted
15Levesqueetal.(2003),forexample,applied
functionalmagneticresonanceimaging(fMRI)toanalysetheneuroanatomicalcorrelatesofsadfeelingsinhealthychildren.Measuredbrainactivityshowedsadfeelingsareassociatedwith
significantbilateralactivations
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longerthanforthosewithlowerlevels
ofreportedSWB.Urryetal.(2004)administeredSWBquestionnairestopeople
priortoanalysingtheirbrainactivity.AhigherlevelofreportedSWBwas
associatedwithgreaterleftthanrightsuperiorfrontalactivation.Steptoeetal.(2005)reportthatpositiveaffectisassociatedwithreducedneuroendocrine,inflammatoryandcardiovascular
activity.Positiveaffect
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wasalsoinverselyrelatedtocortisoloutput
duringtheday(controllingforotherfactorssuchasageandgender)
andheartrate.Duringmentalstresstestinginthelaboratorypeoplewithhigher
positiveaffecthadsmallerplasmafibrinogenstressresponses.Finally,astudybyRainvilleetal.(2006)showsthatbasicemotionsareassociatedwithdistinctivepatterns
ofcardio-respiratoryactivity.
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18
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subsequentcomplaints.Inparticular,higherscores
onnegativeaffectwereassociatedwithhigherdiseaseseverityandthenumber
ofhealthcomplaintslikearunnynose,congestionandsneezing.Koivumaa-Honkanenetal.
(2000)findthatbeingdissatisfiedwithlifepredictshighermortalityandisindicativeofgeneralhealthrisk.Inaddition,lowsatisfactionisassociatedwitha
higherriskof
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suicide(Koivumaa-Honkanenetal.,2001).Danneret
al.s(2001)studyofautobiographiesof180Catholicnunswrittenatage
22showsthatpositiveemotionalcontenthasastrongpositiverelationwithlongevity
sixdecadeslater.Finally,Veenhoven(2008)presentsevidencethathigherSWBpredictslongevityinhealthypopulationsbutnotinsickpopulations,suggestingthatSWBprotects
againstbecomingill.
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higherincomeandbettersupervisoryevaluations,and
arelesslikelytosufferunemployment;aremorelikelytoget
married(happily)andmorelikelytoremarryafterdivorce;havebettermortality,
lesssuicide,lowergeneralhealthrisk,andhaveabetterchanceofsurvivingconditionssuchascoronaryheartdisease;willbemoresocialas
shownbytime
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spentdoingvolunteerworkthreeyearslater;
arejudgedasmorecreativebyotherslateron;and
drinklessalcoholfiveyearslater(andsmokelessnow).Lyubomirskyetal.
(2005)alsosurveyexperimentalstudiesandtheyconfirmthatpositiveaffectandpositiveemotionsthathavebeenexperimentallyinducedcancausegoodoutcomes.Theexperiments
byandlarge
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findthatthesefeelingspromote,amongstothers,
self-perception,sociability,conflictresolutionandaltruism,andthisagainpointstoa
roleforSWBasacausalfactorinmanypositiveoutcomes.
4.4DiscussionTheevidencepresentedinthissectionsuggeststhatmanymeasuresofSWBaremeaningfulandcaptureimportantinformation.AsDienerandSuh(1999:
p.438)conclude,
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SWBindicatorshaveadegreeof
validityandareoftennotascontaminatedaspopularloremightsuggest.
Theyarenotwithouttheirfrailtiesbutsomeoftheweaknessesaself-
measuredconstructlikeSWBispronetohavecanbeovercome.
19
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Thefieldstartedwithasimple
questionaskingpeopletoevaluatetheirlifebyputtingalabelon
it.Morecomplicatedsurveymethodologiesandmulti-itemscaleshavebeendevelopedandappear
tohaveimprovedthemeasurementofSWB.Althoughmuchremainstobediscovered,itseemslikelythatmoreprogresswillbemadeandonecan
envisionagrowing
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connectionbetweentheSWBconstructonthe
onehandandobjectivebiologicalphenomenasuchaspatternsofbrainactivity
ontheother.Suchadevelopmentwouldactuallyfitthegrowingtrendof
mergingsocialscienceswithcognitiveandbrainsciences;forinstance,anewfieldineconomics,calledneuroeconomics,usesinsightsandmethodsfromneurosciencetostudy
decisionmakingand
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henceimproveeconomictheory(Camereretal.,
2005).AlthoughourcurrentunderstandingoftheneuroanatomicalcorrelatesofSWBand
themechanismunderlyingtheobservedrelationsbetweenSWBandbrainactivityissketchy,
knowledgeinthisareaisadvancingatgreatspeed.Ultimately,wemightactuallybeabletocalibrateSWBscoreswithamixtureofphysiologicalphenomena
givingitan
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objective
16
anchor.
However,allthesepossibilitieshavestrengthsandweaknesses.SWBmeasuredwith
asimplesingle-itemscalemayprovetobemorethanadequateinterms
ofbothreliabilityandvalidityforsomepurposes.ForothersonemightwantmoreadvancedmeasuresofSWBandmorethanonescalemaybe
usedtoallow
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forcross-referencingofthefindings(cf.Larsen
andFrederickson,1999).Overall,nogoldstandardexists(LarsenandFrederickson,1999:
p.56)andeachresearchprojectshouldstartwithacareful
deliberationtoascertainthemostsuitablemeasuringinstrument.5.PUBLICPOLICYUSESOFSWBDevelopmentsinSWBresearchrapidlyincreasingunderstandingofthecorrelatesanddeterminants
ofSWBand
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continuousimprovementofthemeasuresusedhavesparked
a
16Asaverycrudeillustrationofwhatmight
actuallybepossibleatsomepoint,takeascalerunningfrom1,dissatisfied
to10,satisfied(seeSection3).PeoplefromcountryXreportinga9onthisscalemayhaveanaveragebrainactivitylevelof100
whiletheaverage
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brainactivitylevelofpeoplefromcountry
Ywiththesamescore(9)is110.Viceversa,peoplewith
abrainactivitylevelof100incountryXonaveragereporta
9onthedissatisfied-satisfiedscalewhileincountryYpeoplewiththisbrainactivitylevel(100)onaveragereportan8onthesame
scale.
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smallliteraturediscussingandexploringpossible
usesofSWBinpolicymaking(e.g.DienerandSuh,1997;Diener
etal.,2008;DolanandWhite,2007;Layard,2005;Veenhoven,2002).Tosome
extent,suggestedpolicyusesfollowquitenaturallyfromtheconclusionthatmeasuresofSWBcontainmeaningfulinformation.IfSWBmatters,perhapsbecauseitpredictslongevity
(Danneretal.,
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2001),appearstofostergoodoutcomesin
severalareasoflife(Lyubomirskyetal.,2005)orbecauseitcorrelates
withlevelsofhypertensionacrosscountries(BlanchflowerandOswald,2008),itdoesnot
requireastrongleapoffaithtoviewpromotingSWBasalegitimatepolicyaim.17
SWBcanbeusefullyappliedinpublicpolicy
makingalsowithout
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itbeinganexplicitgoal(cf.Dolan
andWhite,2007).BecauseSWBmattershigherlevelsofSWBaregenerallypreferred
overlowerlevelsofSWBithasthepossibilitytogivepolicymakersrelevant
informationabouttheeffectsoftheirpolicies.Governmentscanassesstheirpoliciesorbasetheirdecisionsbetweenalternativecoursesofactiononthe(expected)effect
oftheiractions
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onthelevelofSWB.Prominentmanifestations
ofthistypeofpolicyuseofSWBareproposalsfornational
indexesofSWB(Diener,2000;DienerandSeligman,2004;Kahnemanetal.,2004a),
whichallaimtoprovidegovernmentswithrelevantinformationnotcapturedornotfullycapturedbyexisting(objective)statistics.Ontopofthis,inthe
fieldseveralless
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obviouspolicyapplicationsofSWBhavebeen
developed.Notably,measuringSWBcanhelpshedlightonsomehiddencosts
suchasthoseofenvironmentalexternalitiesandterrorismorhelptacklesomeof
theproblemsassociatedwiththemeasurementofpoverty(relativevs.absolute)andhouseholdequivalencescales.
BelowthesedifferentpolicyusesSWBasapolicy
goal,SWBas
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acomplementtoexistingmeasuresofwell-being,
SWBasameasuringrodincost-benefitanalysesandtheuseof
SWBintheconstructionofpovertystatisticsandequivalencescalesarediscussedoneby
one.ThereisnostrictlinedividingallpossibleapplicationsofSWBinthemakingofpublicpolicy,butthistaxonomybringsatleastsome
ordertothe
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diversepolicyusesSWBcanandmight
have.18
17Famously,Bhutanhasdeclaredgrossnationalhappinessas
itsoverarchingpolicygoal.Inthisuse,happinessappearstobemoreabout
thephilosophicalconceptandnotsomuchabouttheSWBconstruct,however.18ThisoverviewislimitedtoapplicationofmeasuresofSWBandSWB
researchinpublic
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policy,whichisoftenratherabstract.Many
psychologistsandpsychiatristsareapplyingSWBresearcheverydayandthesameholds
formanypeopleworkinginmedicine.
21
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5.1SWBasapolicygoal
5.1.1ImprovingSWB:Whyandhow?Tohavewell-beingasapolicy
goalishardlycontroversial.Shovingasidethedebateofwhatconstituteswell-being,well-being
itselfisgoodifitwerenotintrinsicallygood,itprobablywouldnotbecalledwell-being.TohavepromotingSWBasanaimforpublicpolicy
ismuchless
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tautological.Thebasicargumentinfavourof
SWBasapolicygoalisthatitcapturessomethingthat,again,
isintrinsicallygood.Whowouldnotliketoexperiencefrequentpositiveemotions,a
minimalamountofnegativeemotions,and/orleadameaningfullife?Ceterisparibusmostpeopleverylikelywouldindeedpreferalifefilledwithpositiveaffect
overalife
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filledwithnegativeaffect(cf.Kingand
Napa,1998;Dieneretal.,1998;DienerandOishi,2004).19
Inreallife,thesituationisabitmorecomplicated,however.Firstly,there
iswidespreadscepticismconcerningtheextenttowhichmeasuresofSWBindeedcapturesomethingmeaningfullikedesirablementalstates.Evenwhenweacceptthatcertain
mentalstatesare
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preferredoverothers,somedoubtthatmeasures
ofSWBareabletotellusanythingaboutthesestates.In
firstinstance,suchscepticismwouldappeartorequirefurtherassessmentofthevalidity
andreliabilityofmeasuresofSWB,inparticulardelvingmoredeeplyinSWBsbiophysicalandneuroanatomicalcorrelates.Increasingly,however,SWBasapolicygoalis
defendedonthe
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groundsthatevencurrentindicatorswiththeir
drawbacksareabletopredictgoodoutcomes.Inthisview,policiesaiming
toincreaseSWBmakesensebecausetheycanhelppromotelongevity,healthet
cetera.
Secondly,animportantcomplicatingfactoristhesimplepracticalityofhowtogoaboutincreasinglevelsofSWB.Atagenerallevel,
therearemany
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factorsassociatedwithSWBonwhichgovernments
canexertatleastsomeinfluence.Itgoestofartodiscuss
allfactorsthatmightcontributetoSWBoratleastfacilitatetheachievement
ofhigherlevels,butdemocracy,freedomandqualityofgovernanceareallpositivelyrelatedtoaveragelevelsofSWB(e.g.Veenhoven,2008).Theseconceptsare
ratherabstract,however,
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detachedfromconcretecoursesofaction
governmentscanpossiblytaketofosterSWB.Theobviousexampleofa
concretepolicyistoincreaseexpenditureonmentalhealthcare,whichislogically
expectedtohavehighSWBpay-offs(though,ofcourse,itdetractsfromotherpossiblecauses;seebelow).Withintherealmofconcretegovernmentpolicies,the
mostlyhotlydebated
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policyinstrumentintheSWBliteratureis
thatoftaxation.Becauseitissohotlydebated,itservesas
ausefulcasestudytoseehowunderstandingofSWBanditsdeterminants
canhelpformulatepolicies,inparticularthoseaimedatfosteringSWB.
5.1.2TaxationandSWB:AcasestudyIneconomics,thewelfareconsequences
ofgovernmentpolicies,
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andtaxesinparticular,aretypicallyassessed
bylookingathowtheyaffectpeopleschoicestheso-calledbehaviouristapproach.Indeed,
manylargemacroeconomicmodelscontainasmallsetofcorebehaviouralequationson
whichanalysesofthecostsandbenefitsofpolicyalternativesarebased.SWBdataandresearchcanaddavaluableperspectivetothisstandardbehaviourist
approachtothe
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studyofthewelfareeffectsofa
policy(cf.Hollnder,2001;GruberandMullainathan,2005),notleastwhereit
concernsthewelfareeffectsoftaxation.
TheinterestofSWBresearchers
inhowtaxesmightbeusedtopromoteSWBseemslargelydrivenbyoneofthemoststrikingandrobustresultsintheliteratureon
thedeterminantsof
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SWB.Empiricalanalysesconsistentlyshowthatnot
onlytheabsolutelevelofincomemattersbutthatrelativeincome,i.e.
howonesincomecompareswiththatofothers,isalsoanimportantdeterminant
ofSWB(e.g.Easterlin,1974;Dieneretal.,1993;ClarkandOswald,1996;McBride,2001;seeClarketal.,2008foranoverview).Simplyput,
SWBdoesnot
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generallyincreaseaseverybodysincomeincreases(cf.
Easterlin1995),and,whatismore,income(orconsumption)isassociatedwith
significantnegativeexternalities.AsLuttmer(2005)finds,SWBisnegativelyaffectedbythe
levelofincomeofonesneighbours,eventotheextentthatagiven-sizedincreaseofaneighboursincomehasthesamenegativeeffectonones
SWBasa
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similarly-sizeddecreaseinonesownincome.
Resultsliketheseontheimportanceofrelativeincomeandnegative
(consumption)externalitiesbringimportantnewinsighttothereigningunderstandingofthewelfare
consequencesoftaxation.Inparticular,authorslikeLayard(2005),followinghisearlierworkonthisissue(Layard,1980),taketheevidenceontheeffectof
relativeincomeon
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SWBtoarguethat(increased)taxationof
labourincomecanincreasewelfarewhereasthecommonwisdomdictatesthatsuchtaxation
leadstodeadweightlossesandtherebylowerswelfare.
23
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Theoretically,theideaisthatbecause
thereisanexternalitymuchlikepollution,thistaxwillenhanceefficiencyby
makingthepollutingactivity,i.e.workingforanincome,lessattractiveinfavour
ofthenon-pollutingactivity,whichistoenjoyleisure.Ratherthanintroducedistortionsanddeadweightlosses,thistaxwillimprovewelfare,atleastwhenone
analysesitswelfare
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consequencesintermsofSWB.
Theargumentonhow(carefullydesigned)taxesmaybeusedtoincrease
levelsofSWBisthemostclearlyarticulatedpolicysuggestionarisingfromSWB
research.ButitisnotsomethingthatoriginatesstrictlyformSWBresearch.BeforetheuseofSWBindicatorstomeasurewelfarebecamewidespread,alarge
theoreticalliteraturealready
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scrutinisedthepolicyimplicationsofautility
functionwithrelativeincomeeffects;whatdoesitmeanforoptimaltaxation
andpoliciesaimingtomaximizewelfareifpeoplecarenotjustaboutabsolute
butaboutrelativeincomeorconsumptiontoo?BoskinandSheshinski(1978),forinstance,findthattheoptimallevelofincomeguaranteesandmarginaltaxrates
increasesasrelative
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consumptionbecomesmoreimportantinpeoplesutility
function.Similarly,Ng(1987)analysestheimplicationsofrelativeincomeeffectson
theoptimallevelofpublicgoodsprovision.Althoughthislevelneednotbe
toolowwhenrelativeincomeisincludedintheutilityfunction,thevalueofpublicexpendituresislikelyunderestimatedaspeopledonottakeinto
accountitsbenefits
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thatarereceivedindirectlythroughthelowering
ofprivateexpendituresandthelimitingofrelativeincomeeffects.
GoingbeyondtaxesasanSWB-promotingpolicyinstrument,thereisanimportantgeneral
lessontobelearnedfromtheabovediscussionoftaxationanditspossibleroleinimprovingSWB.Ofcourse,SWBresearchisveryimportantin
guidingpolicymakers
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thataimtoimprovelevelsofSWB.
Atthesametime,thevalueofthisresearchisnotlimited
tosuggestinghowaconcretepolicymeasure(suchasatax)maybe
usedtoenhanceSWBscores.Moreindirectly,itcanalsoaddanimportantperspectivetoexistinganalysesandestablishedwisdom.Byshowingthatrelativeincome
indeedmatters,SWB
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researchhasshown,forexample,thattheoretical
analyseslikethoseofBoskinandSheshinski(1978)andNg(1987)can
berelevantinreal-lifepolicysituations.Inthissense,SWBresearchcanhelp
uncoverareasinwhichcertainpolicies,theoreticallythoughttobeabletoaffectwelfare,mayindeedcontributetowell-beinginwaysnotpreviouslythoughtrealistic
orfeasible.
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5.2Towardsamorecomprehensiveaccount
ofwell-being24
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SWBindicatorsareoftenputforward
asusefulcomplementstoexistingmeasuresofhowwelllifeisgoing.
Underlyingthisobservationisthegrowingrecognitionthat,thoughinsightful,therelikelyis
moretowell-beingthanobjectivemeasuresaloneorincombinationareabletocapture.
Aprominentexampleofanareainwhichobjectiveindicatorsgo
onlysofar
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ingivingrelevantandmeaningfulinformationis
theissueoftrust.Whetherpeoplethinktheycantrusttheirfellowman
or-woman,orwhethertheyexpecttobestabbedinthebackat
everypossibleoccasioncertainlyisanimportantfeatureofanysociety.Inaddition,itisnotclearwhetherobjectiveindicatorscangiveanaccurateand
meaningfulaccountof
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theleveloftrustinacountry.
Forinstance,thenumberoffraudcasesbroughtbeforeacourtper
capitaperyearmighttellussomethingabouttrust,butfewwouldargue
thatthisnumbercapturestheessenceoftheconcept.Whatismore,asubjectiveindicator,cleverlyaskingpeoplehowmuchtheytrustothers,willvery
likelyaddinsight
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toexistingobjectivestatisticsonthisaspect
ofasociety.
Concerningwell-being,thecentraltenetofSWB
researchisthatthestudyofwell-beingcannotgetaroundmeasuringpeoples
cognitiveandaffectivereactionstolifeaswholeorspecificdomainsthereof(DienerandSuh,1997:p.200;seealsoDieneretal.,2008and
Veenhoven,2002).Most
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significantly,theargumentisthatSWBis
abletocapturespeopleactualexperienceinadirectmanner,whileeconomic,
socialandenvironmentalindicatorsdosoonlyindirectly(DienerandSuh,1997:p.
205).Thismattersbecausewhatisexperienceddoesnothavetocoincidewithobjectiveconditions,andindeedalargedeviationcanoftenbeobserved.Crime
ratescanbe
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low(relativelyspeaking)butatthesame
timepeoplemightbeafraidtowanderthroughthestreetsaloneat
night;orpeoplemaybewell-educated,butnonethelessfeeltheyjustdonot
understandtheworldinwhichtheylive.Infact,itisoftenarguedSWBindicatorsareusefulcomplementstoobjectiveindicatorspreciselybecausethereis
adivergencebetween
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whatpeople(reportedly)experienceandwithwhat
iscapturedinthe(existing)objectiveindicators(see,inparticular,Dienerand
Seligman,2004:pp.2-3).Thatis,suchdivergenceisanobviousrequirementfor
SWBtocontributetoamorecomprehensivepictureofwell-beingifitcorrelatedperfectlywithobjectiveindicators,itwouldnotaddanything.
Followingthe
abovereasoning,and
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buildingonthemethodsformeasuringSWB
discussedinSection3,researchersinthefieldhavegiventheidea
ofnationalSWBstatisticsseriousconsideration.Togivebutoneexample,Diener(2000:
p.40)proposestoapply
25
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ExperienceSamplingtoanationallyrepresentative
sampleofrespondents(seealsoDienerandSeligman,2004;Kahnemanetal.,
2004a).SWBwouldberecordedforacross-sectioncomprisingdifferentagegroups,geographical
regions,occupationalcategoriesandincomelevels.Tomaximisetheusefulness,reliabilityandvalidityofSWBthusmeasured,theactualsurveyitemswouldtargetallcomponents
ofSWB,the
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affectivecomponent(thepresenceofpositiveaffect
andtheabsenceofnegativeaffect)andthecognitivecomponent,andcould
useforinstanceaPANASscale.Inaddition,otherconstructsdeemedtocapture
importantaspectsofthequalityoflifeandnotcapturedinobjectivemeasuredcouldbeincluded,forinstancestressandtrust.
Ata
conceptuallevel,a
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generallyacceptedsetofguidelinesforthe
constructionofnationalSWBstatisticsisavailable(Diener,2006).Atapractical
level,thereisalsoagreementaboutthemethodforcollectingtheself-reports,ESM
orDRM,quitepossiblyinsomecombination,seemsthemostsuitablewaytoorganisetheeffort(Diener,2006:p.402).Howsubsequentlybesttocarry
outtheactual
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collectionofthedataisstillan
openissue,however.Thousandsofpeoplecompletingtenrandomlytimedquestionnaireson
theirpalmtopeachdaycomplementedwithfrequentbloodpressureandotherphysiologicaltests
maybethemostrigorousapproach,butdoesnotseemfeasible.Inparticular,itwouldbeprohibitivelyexpensive,andgettingarepresentativesampletosubject
tothistesting
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foraconsiderableamountoftime(say
ayear)wouldprobablybenexttoimpossible.Hence,intheconstruction
ofanationalindexofSWBthereisanimportanttradeoffbetween
rigorandfeasibility,andhowbesttodealwiththisissueisanimportantchallengeforSWB-basedcomplementstoexistingmeasuresofwell-beingandaspects
thereof.
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5.3Subjectivewell-beingasameasuringrod
Anessentialaspectinformulatingpolicyistoassessthecostsand
benefitsofalternativecoursesofaction(includingdoingnothing).Thoughstraightforwardinprinciple,
practicalitiesoftenlimittheusefulnessandapplicabilityofformalcost-benefitanalyseswherepolicyalternativesarecomparedintermsofasinglemonetarymetric.Inmany
policyareas,public
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goodsandexternalitiesbeingtheonesmost
familiartoeconomists,thereisjustnowayofputtingaprice
tagontherelevantdimensionsofthedifferentoptionsavailable.In
26
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somecases,however,SWBcanprovide
awaytocircumventtheproblemofmissingprices.20Theeffectsof
publicgoods,externalities,policyactionsor,infact,anyothervaluationproblema
governmentwantstoaddress,areevaluatedintermsoftheircontributionnegativeorpositivetoSWB.ValuationexercisesthatuseSWBgenerallytaketwosteps:first
thevaluationproblem
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isreducedtoitscontributiontoSWB,
andsecondthiscontributioniscomparedwiththeroleincomeplaysin
SWB.21Specifically,thesecondstepconsistsofcalculatingbyhowmuchthelevel
ofincomewouldhavetochangetooffsetexactlytheSWB-effectofthepublicgood,theexternalityorthepolicyalternative.Thefourcasestudies
discussedbelowall
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takethisapproach,inwhichmoneyremains
theultimatemeasuringrod(cf.Pigou,1952)butwheretheuseof
SWBindicatorshelpsextendtherangeofvaluationproblemsthegovernmentisable
toaddressbyformalcost-benefitanalysis.
ThefirstexampleisvanPraagandBaarsmas(2005)studyofthecostsofnoisenuisancearound
AmsterdamSchipholairport.
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Theycombineatraditionalapproachtovaluing
thenoisenuisancefromtheairportwiththeuseofSWBdata.
Ordinarily,ahedonicregressionanalysisofhousepricesisusedtocalculatethe
shadowcostsofnoisenuisance.Thehedonicapproachtovaluingsuchanintangibleispronetoleavesomeresidualcosts,however,andthesecanbe
valuedusingSWB
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ratings.Themethodthusdevelopedisparticularly
usefulwhenforsomereason,notablymarketimperfections,pricedifferencesdonot
fullycapturethecostsorbenefitsofanexternality.
Welsch(2006)
usesSWBdatatocircumventtheproblemofmissingpricesinenvironmentalvaluation.Specifically,heusespaneldataontenEuropeancountriestoanalysethe
effectofair
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pollutiononSWB.Controllingforincome,he
findsthatdifferencesinSWB,bothbetweencountriesandwithincountriesover
timecanpartiallybeattributedtoenvironmentalquality.Theimprovementinairquality
overtheperiod1990-1997isvaluedatroughly$750percapitaperyearinthecaseofnitrogendioxideandabout$1400percapitaper
yearinthe
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caseoflead(averagedoverallcountries).
RelyingonSWBdata,Freyetal.(2007)areable
toexpandthedimensionsoflifetowhichvaluationtechniqueshavebeenapplied
andassessthecostsofterrorism.Thecase
20Betterknown,contingentvaluationprovidesafurtherapproachtosolvingtheproblemofmissing
prices(seethe
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symposiumintheFall1994editionof
theJournalofEconomicPerspectivesforathoroughintroduction).21SeeKahneman
andSugden(2005)foradiscussionofSWBasthedirectunitof
valueincomparingpolicyalternatives.
27
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concernstheRepublicofIreland,during
theperiod1970-1999.ThestudyusesdatafromtheEurobarometersurveyand
intheanalysisdifferencesinreportedlifesatisfactionareexplainedfromlevelsof
terrorism,householdincomeandotherpersonalcharacteristics.Theirfindingsrevealthatpeople,onaverage,wouldbewillingtogiveupsome41%oftheirincome
tohavethe
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levelofterrorismreducedtothelevel
prevailinginmorepeacefulpartsofthecountry.
Finally,Oswald
andPowdthavee(2007)proposeamethodofusingSWBdatatocalculatecompensatory
claimsintortcases,notablybereavement.Theideaisthattheemotionaldamagetheperpetratorinflictedonthevictimwillbeexactlyoffsetbythe
positivewell-beingeffect
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ofamonetarysettlement.22Atypicalamount
forsuchhedoniccompensationiscalculatedat100,000orroughly$200,000.
5.4PovertymeasuresandhouseholdequivalencescalesThoughmuchdiscussed,povertyis
actuallyquitedifficulttomeasureandmanydifferentapproachesexist(cf.CitroandMichael,1995;seealsoFoster,1998).Particularlychallengingisthatpovertyappears
tohavean
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importantrelativecomponent.NotablyAdamSmith(1776:
p.1103)alreadyobservedthat:Alinenshirt,forexample,
is,strictlyspeaking,notanecessaryoflife.TheGreeksandRomanslived,
Isuppose,verycomfortablythoughtheyhadnolinen.Butinthepresenttimes,throughthegreaterpartofEurope,acreditableday-labourerwouldbe
ashamedtoappear
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inpublicwithoutalinenshirt,the
wantofwhichwouldbesupposedtodenotethatdisgracefuldegreeof
povertywhich,itispresumed,nobodycanwellfallintowithoutextremebad
conduct.Custom,inthesamemanner,hasrenderedleathershoesanecessaryoflifeinEngland.Thepoorestcreditableperson,ofeithersex,wouldbe
ashamedtoappear
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inpublicwithoutthem.
The
relativeelementsofpovertycanbetakenintoaccountwithSWBdata
inanapproachpioneeredover30yearsagobyBernardvanPraagand
subsequentcollaborators(seevanPraagandFrijters,1999foranoverview).Forhisapproach,vanPraagusedthesubjective,survey-basedapproachtomeasurewhatis
referredtoas
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theutilityofincome(vanPraag
22Thecorrespondinglegalprincipleiscalledrestitutioinintegrum,which
literallymeansrestorationtooriginalcondition(OswaldandPowdthavee,2007:p.1).
28
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andFrijters,1999:p.417).Many
variationsarepossible,butatthebasiclevelheasked(p.418):
Whilekeepingpricesconstant,whatafter-taxtotalmonthlyincomewouldyou
considerforyourfamilytobe:
Verybad$________Bad$________Insufficient$________Sufficient$________Good$________Verygood$________
This
istheso-called
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IncomeEvaluationQuestionorIEQ.Useand
analysisoftheIEQhasproducedtwomainfindings.First,theutility
functionofincomeisfoundtodifferoverpeople.Second,subsequenttestingshowed
thattheobserveddifferencesarerelatedtoobjectivelyobservablecharacteristicsofrespondents.Inparticular,incomeactuallyearnedisaverysignificantfactorintheutility
functionofincome.
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Simplyput,apersonearning$40,000typically
thinks$100,000isaverygoodincome,whileapersonactuallyearning
$100,000thinks$200,000wouldqualifyasaverygoodincome;andtheopposite
holdsaswell,someonewitha$40,000incomeusuallythinksa$20,000incomeisworsethandoesapersonactuallyearning$20,000(vanPraagand
Frijters,1999:p.
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423).
Agovernment,orin
fact,anybodywhomightbeinterestedindefiningpovertyina(partially)
relativewaycanfollowtheapproachcapturedintheIEQ.Thepovertyline
couldbedrawnattheaverageincomedeemedverybadbythemedianhousehold,forinstance,butcountlessdefinitionsareimaginable.Theinterestingandvery
usefulfeatureof
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suchadefinitionisthatno(frequent)
redefinitionisneededandthattherelativeaspectsofpovertyareautomatically
accountedfor.Whatisconsideredaverybadincomeevolveswiththedevelopment
ofaverageearningsof,say,themedianhousehold.Changesthereinincreasesintimesofeconomicgrowthanddecreasesduringeconomicdownturnsaredirectlyreflectedinthepoverty
line,andultimately
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thepovertystatistics.
Usesof
theIEQinpublicpolicydonotstopatmeasuresof(relative)
poverty,butstraightforwardlyextendtotheconstructionofhouseholdcostfunctionsand/orequivalence
29
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scales(seevanPraagandvan
derSar,1988).Howtheneedsofhouseholdschangewiththeirsize,
i.e.thenumberofhouseholdmembers,isalong-standingquestionineconomicsand
animportantpolicyissue.Theideaisthatthetotalcostsofneedsincreasewitheachadditionalmember,butnotinaproportionalway;there
areeconomiesof
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scalesothattheneedforhousing
space,electricity,etceterawillnotbetwiceashighfora
two-personhouseholdasitisforasingle-personhousehold.Intermsofthe
IEQ,besidesincome,householdsizeisasecondimportantfactorinobservedutilityfunctionsofincome.Keepingotherpersonalcircumstancesconstant,largerhouseholdsareless
satisfiedwithany
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givenlevelofincome.Knowingthesize
ofthedissatisfactionforhouseholdsofdifferentsizessubsequentlygivesanidea
oftheextenttowhichhouseholdsneedsincreasewiththeirsize,aidingthe
constructionofsuitableequivalencescales.
6.SUMMARIZINGREMARKSHappiness,pleasure,joy,thegoodlifeandrelatednotionshavebeenandcontinuetobe
thesubjectof
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muchdebate.Startinginthesecondhalf
ofthe20thcentury,thislong-standingdebatehasreceivedanimportantimpetus.
Atthatpoint,psychologists,traditionallyconcernedwithnegativeemotionsandfeelings,slowlybecame
interestedinpositiveaspectsoflife,forinstanceinpeoplefeelinghappyratherthanmiserableorbeingsatisfiedwiththeirliferatherthandissatisfied.This
researchprogrammewas
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highlyempiricalanddevelopednewindicatorsto
measurehowwellindividualsthemselvesfeeltheirlifeisgoing.Thegeneral
constructthatcameoutoftheireffortsisbestreferredtoassubjective
well-being(SWB).SWB,inturn,referstoabroadsetofphenomenathatincludespositiveemotion,engagement,satisfactionandmeaning.Thekeyfeatureofmeasures
ofSWBis
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thattheyrelyentirelyoninherentlysubjective
self-appraisalsandmakenoreferraltoobjectivecircumstances.
SWBis
asurvey-basedmeasureobtainedbysimplyaskingpeopletoanswercertainquestions,and
thereforeissusceptibletotheproblemssurveydatacantypicallyhave.Indeed,acommonfindingisthatcontextualfactors,rangingfromtheorderofquestions
toweatherconditions,
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affectreportedSWBlevels.Ontheseand
othergrounds,thevalidityandreliabilityofindicatorsofSWB,ormore
generaltheirabilitytoconveyinformationthatismeaningful,ismuchchallenged.For
SWBthisappearstoholdevenmorethanformostothervariablesmeasuredthroughtheuseofquestionnaires.Afterall,itisnotevidentwhat
oneis
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30
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measuringwhenaskingsomebodytakingall
thingstogether,wouldyousayyouareandthengivingfourresponse
categoriestochoosefrom(veryhappy,quitehappy,notveryhappyornot
atallhappy).Atthecore,thisquestionsimplyaskspeopletoputalabelontheirlife.Thereisnorationaleforaskingthis
questionwiththese
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specificresponsecategoriesotherthantheexpectation
thattheresultingmeasurewillbemeaningful.Thisisanoutstandingfeature
oftheconceptofSWB:itappearslargelyconceptualisedthroughthespecificindicators
usedtomeasureit,i.e.bythespecificquestionsasked.
Consideringallthis,itmightbesurprisingtofindthatmeasuresofSWB
areactuallyquite
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abletocapturesomethingimportantanduseful.
Asthereviewinthispapershows,amidstalltheirweaknesses,indicators
ofSWBdoprovideimportantandusefulinformationonhowwellpeopleor
asocietyasawholearedoing.EvenifthemeasuredlevelofSWBindeedisjustasimplelabelpeopleputontheirlife
whenaskedupon,
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itappearstomatterforabroad
classofphenomena.Itcorrelateswithmanyfactorsgenerallyconsideredimportantfor
well-being,e.g.health,incomeandgoodrelationships,andpredictsgoodoutcomesinmany
oftheseareas.Inaddition,ithasbiologicalcorrelates,notablySWBisassociatedwithpatternsofbrainactivityandbloodpressurelevels.
Interestingly,
measurementinthe
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fieldofSWBisadvancingrapidly.Single-item
scalesdoreasonablywellintermsofreliabilityandvaliditybutmulti-item
scalesalreadyleadtomuchimprovement.Recentlydevelopedmeasurementtechniquessuchasthe
ExperienceSamplingMethod(ESM)ortheDayReconstructionMethod(DRM)holdgreatpromiseforleadingtoevermoremeaningfulmeasures.Thoughseveraloftheproblems
withSWBmeasuresor
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subjectiveindicatorsingeneralseeminsoluble,itis
cleartheindicatorscanbeimprovedupon.Alreadyaninterestingandmeaningful
indicator,reportedlevelsofSWBwillincreasinglybeabletogiveimportantinsight
onhowwellpeopleandsocietiesasawholearedoing.
Withreliabilityandvalidityestablished,applicationofSWBdataandSWBresearch
inpolicymaking
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followsquitenaturally.Manydifferentapplicationsseem
possiblebutmostprominentlySWB,i.e.increasingitslevel,canitselfbe
apolicygoal,notleastbecausehighlevelsofSWBappeartopredict
goodoutcomessuchaslongevity.BeyondthegoalofimprovingSWB,indicatorsofSWBcanbeusedmoregenerallyinformulatingandevaluatingpolicy.In
particular,SWBdata
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cangivepublicpolicymakersrelevantinformation
aboutthecostsandbenefitsoftheirpoliciesandbeusedto
assesstheeffectsofalternativecoursesofaction.Aninterestingapplicationisthe
useofSWBindicatorsinthevaluationof
31
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environmentalexternalitiessuchasnoisenuisance
andairpollution.AlthoughSWBisnotwidelyappliedinshapingand
appraisingpolicy,itisclearthatpolicymakersmayfindmeasuringSWBuseful.
Whatismore,asSWBresearchadvances,notleastintermsofthemethodsbywhichtheSWBconstructisgivenempiricalcontent,itsusefulness
forpublicpolicy
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makingissettoimprovefurther.
Aswithallsocietalindicators,importantcaveatsapplytoSWBindicators
andtheiruseinformulatingpublicpolicyaswell,andoneofthese
deservesexplicitmentioning.SWBresearchormeasuresofSWBdonotprovideapolicyrecipe.Althoughweareunawareofanyindicatorforwhichchanges,
up,downor
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lackthereof,docomewithstraight-cutpolicy
advice,thispointiswellemphasised.ThustheSWBliteraturemayultimately
haveaneffectonwhatgovernmentsdoordonotdo,andhow
theydoit,butthefielditselfonlyhandsthetoolsandinsights,notaroadmap.
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