What Do You Want from Life? Is Happiness Enough for Policy?

1. What Do You Want from Life?Is Happiness Enough for Policy? Andrew E. Clark (Paris School of Economicsand IZA) http://www.pse.ens.fr/clark/ ISFOL Meeting on Multidimensional Poverty ROME. May 22nd 2012.

2. Economics has arguably caught on late to the interest of measures of subjective well-being. This is useful both descriptively (as a measure of the distribution of well-being) and to help us understand preferences: what do individuals want? Although some (not all) now agree that such broad types of measures are useful, we are not sure exactly how to obtain hard data on them. We are often in the context of survey questions here, as we would like to obtain such measures from many thousands of people.

3. Some of the relevant issues here include: Top-down vs. bottom-up Experienced vs. Remembered well-being Hedonic vs. Eudaimonic well-being There has been a lot of ink spilt about the distinctions between the various different measures.

4. But in practice, how much does this matter? For the purpose of discussion, consider two polar cases for the representation of individual well-being (W). LS refers to Life Satisfaction. W = W1(Life Satisfaction) + W2(Eudaimonia) + W3(Affect) + W4(….) LS = LS1(Eudaimonia) + LS2(Affect) + LS3(….)

5. “Eudaimonia refers to the idea of flourishing or developing human potential, as opposed to pleasure, and is designed to capture elements such as mastery, relations with others, self-acceptance and purpose.” Practically, eudaimonic well-being is measured by questions on autonomy, determination, interest and engagement, aspirations and motivation, and a sense of meaning, direction or purpose in life.

6. Affect refers to the experience of feeling or emotion Positive and negative affect are distinguished. The most commonly used measure of positive and negative affect in scholarly research is the Positive and Negative Affect Schedule (PANAS). This consists of 20 single-word items, such as excited, alert, determined for positive affect, and upset, guilty, and jittery for negative affect.

7. In case 2) above, the life satisfaction measure already includesall of the other relevant aspects of individual well-being. If we substitute 2) into 1) above, we then have a reduced form that boils down to W = Life Satisfaction. We don’t need any other information, it’s all in the self-reported summary life satisfaction score!

8. BBC News Website 24 Feb 2011www.bbc.co.uk/news/uk-12566965 • ONS Happiness Survey Questions Revealed • After becoming Conservative leader in 2005, David Cameron said gauging people's feelings was one of the "central political issues of our time". • "It's time we admitted that there's more to life than money and it's time we focused not just on GDP but on GWB - general well-being," he said. • The ONS will add the subjective questions to its next annual Integrated Household Survey • The questions will include: • Overall, how satisfied are you with your life nowadays? • Overall, how happy did you feel yesterday? • Overall, how anxious did you feel yesterday? • Overall, to what extent do you feel the things you do in your life are worthwhile? www.bbc.co.uk/news/uk-12566965

9. So three of the above ONS survey questions may actually be redundant! The question I would then like to ask here (without necessarily being able to answer it) is whether life satisfaction covers everything that is important, or whether we need to consider a multidimensional approach to well-being that includes not only life satisfaction but also other things.

10. I don’t know how much progress we can make at the purely persuasive level. So I am going to discuss three separate pieces of empirical evidence here.

11. 1) How closely-related are happiness, satisfaction and eudaimonia? Clark, A.E., and Senik, C. (2011). "Is Happiness Different From Flourishing? Cross-Country Evidence from the ESS". Revue d'Economie Politique, 121, 17-34. Data from the third wave of the European Social Survey (ESS: freely available from http://www.europeansocialsurvey.org). The ESS is a multi-country survey which has covered 30 different countries at various points over its first three rounds. Wave 3 of the ESS, collected in 2006/2007, covers 25 different countries and contains a special module on well-being (see Huppert et al., 2009).

12. The original sample includes just over 47 000 observations. The huge advantage of the ESS is that we were able to ask the same individuals a wide range of different well-being questions. We don’t have to worry about sample comparability then: it’s the same people answering the questions.

13. ESS hedonic questions Happiness: “Taking all things together, how happy would you say you are?”, with answers on a 0 to 10 scale, where 0 corresponds to “Extremely Unhappy” and 10 to “Extremely Happy”. Life satisfaction: (more cognitive?) “All things considered, how satisfied are you with your life as a whole nowadays?”, with answers on a 0 to 10 scale, where 0 means extremely dissatisfied and 10 means extremely satisfied.

15. ESS eudaimonic questions Our first eudaimonic measure here is that of flourishing, as described in Huppert and So (2009). This is based on the answers to seven different well-being questions. The first one of these is a happiness question: as our goal here is to see how hedonic and eudaimonic measures relate to each other, we therefore drop the happiness aspect of flourishing. Our modified version of Huppert and So’s index is defined by the answers to the six different questions below.

16. The measure they propose of flourishing is agreement with the first two “core” questions, plus agreement with at least three of the next four questions.

17. Fifty six percent of the ESS sample is flourishing according to this definition. Cronbach’s alpha for the answers to the six measures we keep from Huppert and So’s measure is 0.63, so arguably somewhere around the level of respectability.

18. The second measure is developed by the New Economics Foundation (2008), creating indices of: • Vitality • Resilience and Self-Esteem • Positive Functioning, Supportive Relationships, Trust and Belonging Each of these three is constructed as the unweighted sum of the answers to a number of z-score transformed questions (such that each of the questions has a mean of zero and a variance of one).

19. Vitality consists of answers to questions on how much of the time during the past week the individual felt tired, felt that everything they did was an effort, could not get going, had restless sleep, had a lot of energy, and felt rested when they woke up in the morning, plus the respondent's general health and whether their life involves a lot of physical activity. All of these are recoded so that higher values reflect greater vitality.

20. Similarly, resilience and self-esteem is given the sum of the answers to the four following z-score transformed questions: • "In general I feel very positive about myself“ • "At times I feel as if I am a failure“ • "I’m always optimistic about my future“ • "When things go wrong in my life, it generally takes me a long time to get back to normal". Again, all of these are recoded so that higher numbers reflect greater resilience.

21. Last, positive functioning is determined by the answers to the following questions: • "In my daily life I get very little chance to show how capable I am“ • "Most days I feel a sense of accomplishment from what I do“ • "In my daily life, I seldom have time to do the things I really enjoy“ • "I feel I am free to decide how to live my life“ • "How much of the time during the past week have you felt bored?“ • "How much of the time during the past week have you been absorbed in what you were doing“ • "To what extent do you get a chance to learn new things?“ • "To what extent do you feel that you get the recognition you deserve for what you do?“ • "I generally feel that what I do in my life is valuable and worthwhile"

22. Pairwise correlations between Hedonic and Eudaimonic Measures of Well-Being (All converted into dichotomous measures)

23. Is someone who is deprived hedonically also more likely to be deprived eudaimonically?

24. A second simple way of evaluating the difference, if any, between hedonic and eudaimonic measures of well-being is to carry out a regression analysis using "standard" socio-demographic variables as controls. Here’s the regression table, just to prove that we did it….

26. So how similar are these measures? One way of finding out is to compare the data shapes in the regressions above: Are the explanatory variables correlated with hedonic and eudaimonic happiness in the same way? There are two levels at which the comparison between the regression results can be carried out: individual-level variables, such as age, sex and education, and the country fixed effects.

27. There are 17 individual socio-demographic variables. The perhaps surprising conclusion is that the patterns of hedonic and eudaimonic regressions are similar for most of them. Opposition for only four variables: Men have consistently lower hedonic well-being scores, but report significantly higher levels of eudaimonia. The retired have lower levels of eudaimonic well-being, but are not significantly different from non-retirees in hedonic terms. Labour-force status variables of Full-Time education and (to a certain extent) looking after the house and children: both of these groups do relatively well hedonically, but do not have higher eudaimonia scores.

28. It thus turns out that in spite of the vivid debates about the correct notion of well-being, the subjective appreciation of life satisfaction, happiness and eudaimonia are similar to each other, and are characterized by very similar socio-demographic patterns (for example, the richer and the higher-educated are both more happy, more satisfied and have higher eudaimonia scores).

29. Not true for groups of countries. Considering life satisfaction and flourishing, the estimated country dummies are oppositely signed, and both significant, for Belgium, Bulgaria and Portugal. Further the significant life satisfaction effect is not reflected in any flourishing effect for the United Kingdom, Latvia, the Netherlands, Norway, Poland and Slovenia. Only very few countries attract consistent estimated coefficients across the six regression columns : all else equal, living in Austria is associated with significantly higher scores in all the well-being dimensions, whereas the opposite is true of France, Latvia, Russia and Slovakia. The group of countries whose inhabitants are always found to score higher in terms of subjective happiness and satisfaction, i.e. Scandinavian countries (Denmark, Norway Sweden), Ireland and Switzerland actually attract higher scores in all hedonic and eudaimonic dimensions except resilience, where the effect is negative.

30. In terms of correlations with explanatory variables, happiness and life satisfaction are the same thing. Hedonia and Eudaimonia are also reasonably well-correlated.

31. These are averages of course: some are dissatisfied but enjoy eudaimonic well-being. These individuals are more likely to be: • Men, middle-aged, educated, single and separated. • Income plays only a very minor role in distinguishing hedonic and eudaimonic well-being. • The retired (but not the unemployed) are significantly less likely to report low life satisfaction and high levels of eudaimonia. • Least likely to be in the Nordic countries, Switzerland, the Netherlands and Belgium.

32. 2) Does happiness predict hypothetical choice? Benjamin, D., Heffetz, O., Kimball, M. and Rees-Jones, A. (2012), “What Do You Think Would Make You Happier? What Do You Think You Would Choose?”, American Economic Review, Forthcoming. They consider a series of sequence of hypothetical pairwise-choice scenarios.

34. These kinds of questions are asked about happiness, and eleven non-SWB aspects of life: • Family happiness • Health • Life's level of romance • Social life • Control over your life • Life's level of spirituality • Life's level of fun • Social status • Life's non-boringness • Physical comfort • Sense of purpose

35. Which of the 12 aspects predict choice best? As reported by the R2, 0.38 of the variation in choice is explained by SWB (own happiness) alone. Regressing choice on both SWB and the eleven non-SWB aspects yields a barely higher R2 of 0.41. But:“the four scenarios we designed to be representative of typical important decisions facing our college-age Cornell sample…socialize versus sleep, family versus money, education versus social life, and interest versus career… are among the scenarios with the lowest univariate R2 and, correspondingly, the highest incremental R2 from adding non-SWB aspects as regressors” Eudaimonia may then matter much more in certain real-life situations

36. 3) Which well-being measures predict actual behaviour? British Household Panel Survey (BHPS). • See http://www.iser.essex.ac.uk/ulsc/bhps/ • Annual panel (longitudinal) survey since 1991; Wave 18 in September 2008 • Wide range of variables from same individuals and households each year.

37. The General Health Questionnaire 12 (GHQ-12) Have you recently: 1. been able to concentrate 2. lost much sleep over worry 3. felt that you were playing a useful part in things 4. felt capable of making decisions 5. Felt constantly under strain 6. felt you could not overcome difficulties 7. been able to enjoy normal activities 8. been able to face up to problems 9. Been feeling unhappy and depressed 10. been Losing confidence 11. been thinking of yourself as worthless 12. been feeling reasonably happy 37

38. Satisfaction Questions Here are some questions about how you feel about your life. Please tick the number which you feel best describes how dissatisfied or satisfied you are with the following aspects of your current situation. Your life overall [ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ] [ 6 ] [ 7 ] not satisfied at all   completely satisfied This question is also asked about domains of life: e.g. health, income, house, partner ... 38

39. Predicting separation/divorce We can carry out a simple test, seeing whether life satisfaction or the GHQ measured at year t are able to predict the marital break-up at t+1 of those who were married at year t. Both do, although life satisfaction is a stronger predictor of break-up than is the GHQ. 39

40. We can carry out a simple test, seeing whether life satisfaction or the GHQ measured at year t are able to predict the marital break-up at t+1 of those who were married at year t. Both do, although life satisfaction is a stronger predictor of break-up than is the GHQ. 40

41. Wave 11 of the BHPS included the 19 questions of the CASP-19, covering a variety of domains. 41

42. CONTROL • My age prevents me from doing the things I would like to do • I feel that what happens to me is out of my control • I feel free to plan for the future • I feel left out of things Alpha = 0.6

43. AUTONOMY • I can do the things I want to do • Family responsibilities prevent me from doing what I want to do • I feel that I can please myself what I do • My health stops me from doing the things I want to do • Shortage of money stops me from doing the things I want to do Alpha = 0.6

44. Self-realisation • I feel full of energy these days • I choose to do things that I have never done before • I fell satisfied with the way my life has turned out • I feel that life is full of opportunities • I feel that the future looks good for me Alpha = 0.8

45. Pleasure • I look forward to each day • I feel that my life has meaning • I enjoy the things that I do • I enjoy being in the company of others • On balance, I look back on my life with a sense of happiness Alpha = 0.8

46. Not all of these predicted divorce 46

47. Conclusions (such as they are) • There are a huge number of candidate measures of well-being. • Many of the ones I’ve looked at seem to be moderately to strongly correlated with each other. • What people say and what they do: linking self-report to future behaviour seems like a fruitful area for further work. 47