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Why Measure Subjective Well-being?

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Why Measure Subjective Well-being? Andrew Oswald University of Warwick I would like to acknowledge that much of this work is joint with coauthors Andrew Clark, Nick ... – PowerPoint PPT presentation

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Title: Why Measure Subjective Well-being?


1
  • Why Measure Subjective Well-being?
  • Andrew Oswald
  • University of Warwick
  • I would like to acknowledge that much of this
    work is joint with coauthors Andrew Clark, Nick
    Powdthavee, David G. Blanchflower, Eugenio Proto,
    Alex Weiss, Rainer Winkelmann, and Steve Wu. I
    thank the ESRC for support.

2
Reason 1
3
Reason 1
  • We need to know if society is going in a
    sensible direction.

4
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Yet in 1934
6
Yet in 1934
  • ...the welfare of a nation can scarcely be
    inferred from a measure of national income...

7
Hug a tree today
8
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Prof. Simon Kuznets
  • The originator of the concept of GDP

10
  • ...the welfare of a nation can scarcely be
    inferred from a measure of national income...
  • S Kuznets

11
  • So even Simon Kuznets knew that we require a
    different yardstick.

12
Reason 2

13
Reason 2
  • Human beings have feelings.

14
Reason 2
  • Human beings have feelings.

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  • Humans have feelings, and feelings matter.

20
  • How do I know researchers care about feelings
    of well-being?

21
  • Say we do an electronic search.

22
  • Since 2008, approximately 110,000 articles
    have been published in economics journals.

23
The most-cited major article in modern
economics
24
The most-cited major article in modern
economics
  • Relative income, happiness, and utility An
    explanation for the Easterlin paradox and other
    puzzles
  • Clark, Andrew E. Frijters, Paul Shields,
    Michael A.
  • JOURNAL OF ECONOMIC LITERATURE MAR 2008

25
Reason 3

26
Reason 3
  • Peoples utility depends on income relative
    to comparison income.
  • Veblen, Scitovsky, Hirsch, Frank...

27
Much econometric evidence
28
Much econometric evidence
  • Clark and Oswald Satisfaction and Comparison
    Income. Journal of Public Economics 1996
  • Luttmer Neighbors as Negatives. Quarterly
    Journal of Economics 2005

29
  • There is other evidence that human beings care
    about their relative position.

30
  • We are now able to see that inside the brain.

31
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32
  • Title Social comparison affects reward-related
    brain activity in the human ventral striatum
    Author(s) Fliessbach K, Weber B, Trautner P, et
    al. Source SCIENCE Volume 318 Issue 5854
    Pages 1305-1308 Published NOV 23 2007

33
Armin Falk et al

34
Armin Falk et al
  • While being scanned in adjacent MRI scanners,
    pairs of subjects had to perform a task with
    monetary rewards for correct answers.

35
  • Variation in the comparison subject's payment
    affected blood oxygenation level-dependent (BOLD)
    responses in the ventral striatum.

36
  • Variation in the comparison subject's payment
    affected blood oxygenation level-dependent (BOLD)
    responses in the ventral striatum. This brain
    region is engaged in the registration of primary
    rewards.

37
Falk et al in Science
38
Falk et al in Science
  • The mere fact of outperforming the other subject
    positively affected reward-related brain areas.

39
Blood-oxygenation equations
  • (similar with fixed effects, main variation
    across Ss)

40
So, inside your brain
41
So, inside your brain
  • You simply want to be high up the monkey pack

42
  • But then a focus on total national income
    (GDP) misses the point.

43
  • But then a focus on total national income
    (GDP) misses the point.
  • The total amount of relative status is fixed.

44
  • Say you dont believe in statistical evidence.

45
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46
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47
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48
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49
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50
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51
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52
Reason 4
53
  • Happiness and mental well-being are of
    interest in themselves....

54
  • .. but, more broadly, there seem to be deep
    scientific links from mind to body.

55
  • Author(s) Ebrecht M, Hextall J, Kirtley LG,
    Taylor A, Dyson M, Weinman J
  • PSYCHONEUROENDOCRINOLOGY    
  • Volume 29    Issue 6    Pages
    798-809    Published JUL 2004 

56
  • Every subject received a standard 4mm-punch
    biopsy, and the healing progress was monitored
    via high-resolution ultrasound scanning.

57
  • Every subject received a standard 4mm-punch
    biopsy, and the healing progress was monitored
    via high-resolution ultrasound scanning.

58
Ebrecht et al 2004
  • The overall results showed a significant negative
    correlation between speed of wound healing and
    GHQ scores (r -.59 p lt .01)

59
  • In other words, happier human beings heal more
    quickly.

60
An early, famous paper
  • Title PSYCHOLOGICAL STRESS AND SUSCEPTIBILITY TO
    THE COMMON COLD Author(s) COHEN S, TYRRELL DAJ,
    SMITH AP Source NEW ENGLAND JOURNAL OF MEDICINE
    Volume 325 Issue 9 Pages 606-612 Published
    AUG 29 1991

61
  • So we need to understand subjective well-being
    as a determinant of physical health.

62
Reason 5
63
Reason 5
  • The intriguing, and worrying, Easterlin Paradox

64
Average Happiness and Real GDP per Capita for
Repeated Cross-sections of Americans.
65
  • In the early 70s, 33 of Americans described
    their lives as very happy, 52 as pretty happy,
    and 15 as not too happy.
  • By the late 2000s, the numbers were 31, 55, 14.

66
Typical GHQ mental-strain questions
Have you recently Lost much sleep over
worry? Felt constantly under strain? Felt you
could not overcome your difficulties? Been
feeling unhappy and depressed? Been losing
confidence in yourself? Been thinking of yourself
as a worthless person? Been able to enjoy your
normal day-to-day activities?
67
Worsening GHQ levels through time
  • Verhaak, P.F.M., Hoeymans, N. and Westert, G.P.
    (2005). Mental health in the Dutch population
    and in general practice 1987-2001, British
    Journal of General Practice.
  • Wauterickx, N. and P. Bracke (2005), Unipolar
    depression in the Belgian population - Trends and
    sex differences in an eight-wave sample, Social
    Psychiatry and Psychiatric Epidemiology.
  • Sacker, A. and Wiggins, R.D. (2002).
    Age-period-cohort effects on inequalities in
    psychological distress. Psychological Medicine.

68
  • Economic growth doesnt seem to be making us
    much happier.

69
The very latest evidence
70
The very latest evidence
  • Title China's life satisfaction, 1990-2010
  • Easterlin, Richard A. Morgan, Robson Switek,
    Malgorzata et al.
  • Source PROCEEDINGS OF THE NATIONAL ACADEMY OF
    SCIENCES OF THE UNITED STATES OF AMERICA  Volume
    109 JUN 19 2012

71
Modern Chinas happiness has not risen
72
Reason 6
73
Innovative recent applications of well-being
research
74
Innovative recent applications of well-being
research
  • Valuing clean air

75
Innovative recent applications of well-being
research
  • Valuing clean air
  • Valuing different health conditions (migraine)

76
Innovative recent applications of well-being
research
  • Valuing clean air
  • Valuing different health conditions (migraine)
  • The power of fruit and vegetables

77
Innovative recent applications of well-being
research
  • Valuing clean air
  • Valuing different health conditions (migraine)
  • The power of fruit and vegetables
  • The happiness of great apes

78
Reason 7
79
Reason 7
  • There is growing evidence for the objective
    validity of subjective well-being data.

80
  • Different subjective well-being measures produce
    similar patterns.

81
Across nations, hypertension and happiness are
inversely correlated (Blanchflower and Oswald,
2008 Journal of Health Economics)
82
  • We can exploit neo-classical economic theory
    to show the validity of well-being data.

83
Oswald and Wu, 2010 in Science

84
Oswald and Wu, 2010 in Science
  • Objective confirmation of subjective measures
    of human well-being Evidence from the USA.

85
  • Think not about people but about places.

86
  • New data from the Behavioral Risk Factor
    Surveillance System (BRFSS)
  • 1.3 million randomly sampled Americans
  • 2005 to 2008
  • A life-satisfaction equation

87
  • There is a compensating-differentials literature
    dating back to Adam Smith, Sherwin Rosen,
    Jennifer Roback, etc.
  • The most recent is Gabriel et al 2003.

88
Gabriel painstakingly takes data on
  • Precipitation
  • Humidity
  • Heating Degree Days
  • Cooling Degree Days
  • Wind Speed
  • Sunshine
  • Coast
  • Inland Water
  • Federal Land
  • Visitors to National Parks
  • Visitors to State Parks
  • Number of hazardous waste sites

89
and
  • Environmental Regulation Leniency
  • Commuting Time
  • Violent Crime Rate
  • Air Quality-Ozone
  • Air Quality-Carbon Monoxide
  • Student-teacher ratio
  • State and local taxes on property, income and
    sales and other
  • State and local expenditures on higher education,
    public welfare, highways, and corrections
  • Cost-of-living

90
  • Then there are 2 ways to measure human
    well-being or utility across space.

91
  • Then there are 2 ways to measure human
    well-being or utility across space.
  • Subjective and objective

92
  • Gabriels work assigns a 1 to the state with
    the highest imputed quality-of-life, and 50 to
    the state with the lowest.

93
  • So we need to uncover a negative association
    in order to find a match.

94
  • And there is one (at gt99 confidence level).

95
One Million Americans Life Satisfaction and
Objective Quality-of-Life in 50 States
96
  • There is a close match between
    life-satisfaction scores and the implied quality
    of life calculated using objective information.
  • Oswald-Wu Science 2010

97
  • There is also growing recognition beyond
    academic researchers

98
  • Stiglitz Report 2009
  • www.stiglitz-sen-fitoussi.fr

99
  • Statistical offices worldwide should
    incorporate questions to capture peoples life
    evaluations, hedonic experiences

100
  • Statistical offices worldwide should
    incorporate questions to capture peoples life
    evaluations, hedonic experiences

101
Finally
102
Finally
  • on substantive matters

103
What seems to contribute to national well-being?
104
  • My own judgment of the best current scientific
    evidence

105
What makes countries happy
106
What makes countries happy
  • High social spending as a of GDP

107
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity

108
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity
  • Clean air (eg. low SOx emissions)

109
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity
  • Clean air (eg. low SOx emissions)
  • Low unemployment and inflation

110
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity
  • Clean air (eg. low SOx emissions)
  • Low unemployment and inflation
  • Low crime and corruption

111
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity
  • Clean air (eg. low SOx emissions)
  • Low unemployment and inflation
  • Low crime and corruption
  • Openness to trade

112
What makes countries happy
  • High social spending as a of GDP
  • Unemployment-insurance generosity
  • Clean air (eg. low SOx emissions)
  • Low unemployment and inflation
  • Low crime and corruption
  • Openness to trade
  • Genes

113
  • Why measure subjective well-being?
  • Andrew Oswald
  • University of Warwick
  • Downloadable research papers at
    www.andrewoswald.com
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