Transcript Daughters and Leftwing Voting

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.
Reason 1
Reason 1
We need to know if society is
going in a sensible direction.
Yet in 1934
Yet in 1934
• “...the welfare of a nation [can]
scarcely be inferred from a
measure of national income...”
Hug a tree today
Prof. Simon Kuznets
• The originator of the concept of GDP
• “...the welfare of a nation [can]
scarcely be inferred from a
measure of national income...”
S Kuznets
So even Simon Kuznets knew
that we require a different
yardstick.
Reason 2
Reason 2
Human beings have feelings.
Reason 2
Human beings have feelings.
Humans have feelings, and
feelings matter.
How do I know researchers
care about feelings of wellbeing?
Say we do an electronic search.
Since 2008, approximately
110,000 articles have been
published in economics
journals.
The most-cited major article
in modern economics:
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
Reason 3
Reason 3
People’s ‘utility’ depends on
income relative to comparison
income.
Veblen, Scitovsky, Hirsch,
Frank...
Much econometric evidence
Much econometric evidence
• Clark and Oswald “Satisfaction and
Comparison Income”. Journal of Public
Economics 1996
• Luttmer “Neighbors as Negatives”.
Quarterly Journal of Economics 2005
There is other evidence that
human beings care about their
relative position.
We are now able to see that
inside the brain.
• Title: Social comparison affects rewardrelated 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
Armin Falk et al
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.
Variation in the comparison
subject's payment affected blood
oxygenation level-dependent
(BOLD) responses in the ventral
striatum.
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.
Falk et al in Science
Parameter estimates
1.2
0/0
30/0
60/0
0/60
0/30
30/60
30/30
60/30
60/120
60/60
120/60
0.8
0.4
0.0
-0.4
-0.8
-1.2
C1
C2
C3
C4
C5
C6
C7
C8
C9 C10 C11
0.2
0.2
A correct, B not
A not correct
Conditions of interest (both correct)
A’s income : B’s income
1:2
% Signal change
ROI-defining conditions
0.1
0.1
0
0.0
-0.1
-0.1
-0.2
-0.2
1:1
2:1
0
4
8
12
Time (sec)
Time (sec)
16
16
20
Falk et al in Science
• “The mere fact of outperforming
the other subject positively
affected reward-related brain
areas.”
Parameter estimates
1.2
0/0
30/0
60/0
0/60
0/30
30/60
30/30
60/30
60/120
60/60
120/60
0.8
0.4
0.0
-0.4
-0.8
-1.2
C1
C2
C3
C4
C5
C6
C7
C8
C9 C10 C11
0.2
0.2
A correct, B not
A not correct
Conditions of interest (both correct)
A’s income : B’s income
1:2
% Signal change
ROI-defining conditions
0.1
0.1
0
0.0
-0.1
-0.1
-0.2
-0.2
1:1
2:1
0
4
8
12
Time (sec)
Time (sec)
16
16
20
Blood-oxygenation equations
Table: Activation and Income
Dependent v ariable: v entral striatum activ ation
(1)
(2)
(3)
all conditions conditions 2-11 conditions 6-11
Own Income (in 100 Euro)
Other's income (in 100 Euro)
Constant
Observ ations
R-squared
0.916***
[0.109]
-0.666***
[0.087]
-0.119
[0.144]
704
0.059
0.868***
[0.102]
-0.714***
[0.086]
-0.061
[0.145]
640
0.063
0.327***
[0.091]
-0.353***
[0.090]
0.068
[0.167]
384
0.011
OLS estimates; clustering on indiv iduals, robust standard errors in brackets; ***
p<0.01, ** p<0.05, * p<0.1
•
(similar with fixed effects, main variation across Ss)
So, inside your brain
So, inside your brain
You simply want to be high up
the monkey pack
But then a focus on total
national income (GDP) misses
the point.
But then a focus on total
national income (GDP) misses
the point.
The total amount of relative
status is fixed.
Say you don’t believe in
statistical evidence.
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Reason 4
Happiness and mental wellbeing are of interest in
themselves....
.. but, more broadly, there
seem to be deep scientific links
from mind to body.
Author(s): Ebrecht M, Hextall J, Kirtley
LG, Taylor A, Dyson M, Weinman J
PSYCHONEUROENDOCRINOLOGY
Volume: 29 Issue: 6 Pages: 798809 Published: JUL 2004
“Every subject received a standard
4mm-punch biopsy, and the
healing progress was monitored
via high-resolution ultrasound
scanning.”
“Every subject received a standard
4mm-punch biopsy, and the
healing progress was monitored
via high-resolution ultrasound
scanning.”
Ebrecht et al 2004
• The overall results showed a
significant negative correlation
between speed of wound healing
and GHQ scores (r = -.59; p < .01)
In other words, happier human
beings heal more quickly.
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: 606612 Published: AUG 29 1991
So we need to understand
subjective well-being as a
determinant of physical health.
Reason 5
Reason 5
• The intriguing, and worrying,
‘Easterlin Paradox’
2.2
1.8
15000
2
18000
21000
Mean Happiness
2.4
24000
2.6
Average Happiness and Real GDP per Capita
for Repeated Cross-sections of Americans.
1975
1980
1985
Year
Real GDP per Capita
1990
1995
Mean Happiness
• 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%.
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?
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). “Ageperiod-cohort effects on inequalities in
psychological distress”. Psychological Medicine.
Economic growth doesn’t seem
to be making us much happier.
The very latest evidence
The very latest evidence
Title: China's life satisfaction, 19902010
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
Modern China’s happiness has not risen
Reason 6
Innovative recent applications of
well-being research
Innovative recent applications of
well-being research
• Valuing clean air
Innovative recent applications of
well-being research
• Valuing clean air
• Valuing different health
conditions (migraine)
Innovative recent applications of
well-being research
• Valuing clean air
• Valuing different health
conditions (migraine)
• The power of fruit and
vegetables
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
Reason 7
Reason 7
There is growing evidence for
the objective validity of
subjective well-being data.
Different subjective wellbeing measures produce
similar patterns.
Percentage of citizens very satisfied with their lives
Across nations, hypertension and
happiness are inversely correlated
(Blanchflower and Oswald, 2008 Journal of Health Economics)
Figure 2.
The Inverse Correlation Between Hypertension and Life
Satisfaction: 16 European Nations Aggregated into Quartiles
Percentage of citizens very satisfied with their lives
50
40
30
Ireland
Denmark
N'Lands
Sweden
Spain
France
Lux
UK
20
10
Austria
Italy
Belgium
Greece
E. Germany
W. Germany
Portugal
Finland
0
Countries in the
lowest quartile
of blood-pressure
Countries in the
highest quartile
of blood-pressure
We can exploit neo-classical
economic theory to show the
validity of well-being data.
Oswald and Wu, 2010 in Science
Oswald and Wu, 2010 in Science
“Objective confirmation of
subjective measures of human
well-being: Evidence from the
USA.”
Think not about people but
about places.
• New data from the Behavioral Risk
Factor Surveillance System
(BRFSS)
• 1.3 million randomly sampled
Americans
• 2005 to 2008
• A life-satisfaction equation
There is a compensatingdifferentials literature dating back
to Adam Smith, Sherwin Rosen,
Jennifer Roback, etc.
The most recent is Gabriel et al
2003.
Gabriel painstakingly takes data on
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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
and
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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
Then there are 2 ways to
measure human well-being or
‘utility’ across space.
Then there are 2 ways to
measure human well-being or
‘utility’ across space.
Subjective and objective
Gabriel’s work assigns a 1 to
the state with the highest
imputed quality-of-life, and 50
to the state with the lowest.
So we need to uncover a
negative association – in
order to find a match.
• And there is one (at >99%
confidence level).
One Million Americans’ Life Satisfaction
and Objective Quality-of-Life in 50 States
y = -0.0032082 - 0.0012154x R= 0.60938
Life Satisfaction Fully Adjusted (ie income also)
0.04
0.02
0
-0.02
-0.04
-0.06
-0.08
-0.1
0
10
20
30
40
50
Objective Quality of Life Ranking (where 1 is high and 50 is low)
60
There is a close match between
life-satisfaction scores and the
implied quality of life calculated
using objective information.
Oswald-Wu Science 2010
There is also growing
recognition beyond academic
researchers:
Stiglitz Report 2009
www.stiglitz-sen-fitoussi.fr
“Statistical offices [worldwide] should
incorporate questions to capture people’s
life evaluations, hedonic experiences …”
“Statistical offices [worldwide] should
incorporate questions to capture people’s
life evaluations, hedonic experiences …”
Finally
Finally
on substantive matters:
What seems to contribute to
national well-being?
My own judgment of the best
current scientific evidence:
What makes countries happy
What makes countries happy
• High social spending as a % of GDP
What makes countries happy
• High social spending as a % of GDP
• Unemployment-insurance generosity
What makes countries happy
• High social spending as a % of GDP
• Unemployment-insurance generosity
• Clean air (eg. low SOx emissions)
What makes countries happy
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High social spending as a % of GDP
Unemployment-insurance generosity
Clean air (eg. low SOx emissions)
Low unemployment and inflation
What makes countries happy
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High social spending as a % of GDP
Unemployment-insurance generosity
Clean air (eg. low SOx emissions)
Low unemployment and inflation
Low crime and corruption
What makes countries happy
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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
What makes countries happy
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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
Why measure subjective wellbeing?
Andrew Oswald
University of Warwick
Downloadable research papers at:
www.andrewoswald.com