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Happiness, Subjective Wellbeing and Behavioural Economics: Old Ideas, New Understandings Jon.Hall@abs.gov.au. Two Key Questions. How do we measure Subjective Wellbeing? Why do we need to measure Subjective Wellbeing?. Two Key Questions. How do we measure Subjective Wellbeing?.
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Happiness, Subjective Wellbeing and Behavioural Economics: Old Ideas, New UnderstandingsJon.Hall@abs.gov.au
Two Key Questions How do we measure Subjective Wellbeing? Whydo we need to measure Subjective Wellbeing?
Two Key Questions How do we measure Subjective Wellbeing?
Two Key Questions How do we measure Subjective Wellbeing? What is Subjective Wellbeing?
What is Subjective Wellbeing? How individuals rate the quality of their lives Two broad approaches based on… How individuals evaluate the quality of their lives. Positive and negative emotions, measured momentarily or remembered.
What is Subjective Wellbeing? Different questions, different uses “How satisfied are you with your life?” is much more influenced by life circumstances than our day to day emotions. People are “happier” at the weekend, but no more satisfied with life overall. Life satisfaction questions are useful for looking at which circumstances of life drive happiness.
What is Subjective Wellbeing? Different questions, different uses Momentary assessments – based on (in real) time use diaries – show different answers to remembered assessments e.g. time spent with children, experiences of pain Which is the more important to understand?
What is Subjective Wellbeing? Different questions, different uses Evidence shows respondents do interpret their relative position in the world well e.g. self-assessed health declines with age. But the decline is eliminated when respondents are asked to compare their health to their peers.
Why do we need to measure Subjective Wellbeing? 1. Happiness/Wellbeing is a legitimate goal of public policy
Why do we need to measure Subjective Wellbeing? Happiness/Wellbeing is a legitimate goal of public policy 2. SWB drives objective wellbeing
Why do we need to measure Subjective Wellbeing? Happiness/Wellbeing is a legitimate goal of public policy 2. SWB drives objective wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter
Why do we need to measure Subjective Wellbeing? Happiness/Wellbeing is a legitimate goal of public policy 2. SWB drives objective wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter 4. Looking at policy through an SWB lens generates new ideas
Why do we need to measure Subjective Wellbeing? Happiness is a legitimate goal of public policy 2. SWB drives objective wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter 4. Looking at policy through an SWB lens generates new ideas
Why do we need to measure Subjective Wellbeing? Happiness/wellbeing is a legitimate goal of public policy 2. SWB drives objective-wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter 4. Looking at policy through an SWB lens generates new ideas
Happiness and Health This is a new science Extremely difficult to test for links between happiness and health because of confounding variables, false causality etc. etc. – few “laboratory” experiments are possible
Social Benefits of Happiness Trust Happiness Social Connections
Why do we need to measure Subjective Wellbeing? Happiness/wellbeing is a legitimate goal of public policy 2. SWB drives objective wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter 4. Looking at policy through an SWB lens generates new ideas
Happiness and the headlines Discovered: The Happiest Man in America By CATHERINE RAMPELL Published: March 5, 2011 Gallup’s answer: he’s a tall, Asian-American, observant Jew who is at least 65 and married, has children, lives in Hawaii, runs his own business and has a household income of more than $120,000 a year. A few phone calls later and ...
Happiness and the headlines Happiness Monthly happiness indicator triggers public discussion Why the changes? Which groups/regions faring differently? Trojan Horse for facts-based debate about health, wealth, education, employment, environment etc. etc. TIME
Why do we need to measure Subjective Wellbeing? Happiness/wellbeing is a legitimate goal of public policy 2. SWB drives objective wellbeing 3. SWB measures can promote a facts-based debate about the statistics that matter 4. Looking at policy through an SWB lens generates new ideas
Behavioural Economics People do not seek necessarily to maximise their own utility.
Behavioural Economics People do not seek necessarily to maximise their own utility. Which would you prefer? a. You and all your team receive $1000 pay rise
Behavioural Economics People do not seek necessarily to maximise their own utility. Which would you prefer? a. You and all your team receive $1000 pay rise b. You get a $2k rise – your colleagues each get $5k
Behavioural Economics People do not seek necessarily to maximise their own utility. Which would you prefer? a. You and all your team receive $1000 pay rise b. You get a $2000 rise – your colleagues each get $5k Economic theory says b) Human nature says a)
Behavioural Economics Unemployment, happiness and your partner
Behavioural Economics Ingenious natural experiments …. The Dutch postcode lottery – keeping up with the Van Jones’s
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” “To those who say that all this sounds like a distraction from the serious business of government, I say finding out what will really improve lives and acting on it is the serious business of government." David Cameron, 2010
3. Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters Different conversations e.g. community cohesion
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters Different conversations Different behaviours & policies e.g. commuting or police investigations
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters Different conversations Different behaviours & policies Cost benefit analyses – inflation vs. unemployment
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters Different conversations Different behaviours & Cost benefit analyses Management practices – the weekend effect
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters Different conversations Different behaviours & policies Cost benefit analyses Management practices Korea’s response to the GFC
Subjective Wellbeing – the New Business of Government From Bhutan to the UK, governments are getting serious about measuring “happiness” … “subjective wellbeing:” … “flourishing societies” A new science…. but we know that wellbeing matters By 2030…? Radical reform of the how we understand/think about policy…
Subjective Wellbeing – the New Business of Government Consider education policy. To educate and build socially inclusive communities where all Australians have the opportunity to reach their full potential and to actively participate in a rewarding economic and social life. DEEWR, 2011