Transcript Emotional Prosperity

Emotional Prosperity
Invited BJIR Annual Lecture at LSE, 2009
Andrew Oswald
I would like to acknowledge that much of this work is joint with coauthors
Andrew Clark, Nick Powdthavee, David G. Blanchflower, Rainer Winkelmann,
and Steve Wu. I thank Andrew Steptoe, Francis Green, Justin Wolfers and
Helen Urry for valuable discussions and for their kind permission to use certain
later graphics. My research is supported by an ESRC professorship.
Social science is changing
Social science is changing
Researchers are studying
mental well-being.
Social science is changing
Researchers are studying
mental well-being.
We are drawing closer to
psychology and medicine.
Using random samples from
many nations:
Researchers try to understand
what influences the psychological
wellbeing of
(i) individuals
(ii) nations.
Is modern society going
in a sensible direction?
The types of statistical sources
General Social Survey of the USA
British Household Panel Study (BHPS)
German Socioeconomic Panel
Australian HILDA Panel
Eurobarometer Surveys
Labour Force Survey from the UK
World Values Surveys
NCDS 1958 cohort
BRFSS
Regression equations
Mental well-being = f(Age,
gender, education level,
income, marital status,
friendship networks, region,
year…)
Could we perhaps learn …
..how to make whole countries
happier?
Preferably without relying
on implausibly good fortune:
England 8 Brazil 0
Stiglitz-Sen-Fitoussi Report
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Bina AGARWAL University of Delhi
Anthony B. ATKINSON Warden of Nuffield College
François BOURGUIGNON School of Economics,
Jean-Philippe COTIS Insee,
Angus S. DEATON Princeton University
Kemal DERVIS UNPD
Marc FLEURBAEY Université Paris 5
Nancy FOLBRE University of Massachussets
Jean GADREY Université Lille
Enrico GIOVANNINI OECD
Roger GUESNERIE Collège de France
James J. HECKMAN Chicago University
Geoffrey HEAL Columbia University
Claude HENRY Sciences-Po/Columbia University
Daniel KAHNEMAN Princeton University
Alan B. KRUEGER Princeton University
Andrew J. OSWALD University of Warwick
Robert D. PUTNAM Harvard University
Nick STERN London School of Economics
Cass SUNSTEIN University of Chicago
Philippe WEIL Sciences Po
Stiglitz Report 2009
www.stiglitz-sen-fitoussi.fr
The Stiglitz Commission Report
• advocates a shift of emphasis from
a “production-oriented”
measurement system … toward
broader measures of social
progress.
Some cheery news:
Some cheery news:
In Western nations, most
people seem happy with
their lives
Some cheery news:
In Western nations, most
people seem happy with
their lives
The distribution of life-satisfaction levels
among British people
35
Percentage of Population
30
25
20
15
10
5
0
1
2
3
4
5
6
Self-rated Life Satisfaction
Source: BHPS, 1997-2003. N = 74,481
7
From the U.S. General Social Survey
(sample size 40,000 Americans approx.)
• “Taken all together, how would
you say things are these days would you say that you are
very happy, pretty happy, or not
too happy?”
Typical GHQ mental-strain
questions
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?
The Warwick-Edinburgh Mental Wellbeing Scale (WEMWBS)
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I’ve been feeling optimistic about the future
I’ve been feeling interested in other people
I’ve had energy to spare
I’ve been thinking clearly
I’ve been feeling good about myself
I’ve been feeling confident
I’ve been able to make up my own mind
I’ve been feeling loved
I’ve been feeling cheerful
Happiness and mental wellbeing are of interest in
themselves.
But, more broadly, there
seem to be deep links
between mind and 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.
A more recent paper
A more recent paper
“Enhanced wound healing after
emotional disclosure intervention”
Weinman, Ebrecht et al
BRITISH JOURNAL OF HEALTH
PSYCHOLOGY Volume: 13 Pages:
95-102 Part: Part 1 Published: FEB
2008
• Participants who wrote about
traumatic events had significantly
smaller wounds 14 and 21 days
after the biopsy compared with
those who wrote about time
management.
We need to understand
these interconnections
better.
How has the modern work on
the economics of happiness
proceeded?
The London School of
Economics itself has played
a prominent historical role in
these issues.
Prof. Lionel Robbins
Prof. Lionel Robbins
Prof. Lionel Robbins
He was influential in dissuading
economists from studying mental
well-being. He worked at LSE for
30 years.
"Interpersonal Comparisons of Utility: A
Comment", 1938, Economic Journal.
Eventually the intellectual
tide turned.
[One reason was a meeting near here]
1993: Lionel Robbins Building
1993: Lionel Robbins Building
The first economics-of-happiness
conference was held. A central
person was Andrew Clark, then a
PhD student at LSE.
Our 1993 economics-ofhappiness conference, 50
metres from here, was of
course a great success?
Our 1993 economics-ofhappiness conference, 50
metres from here, was of
course a great success?
Well, no.
• The conference at 10.30am before it
filled up.
• The conference at 10.30am before it
filled up.
• The conference at 11.30am after it filled
up.
10 people came.
Unfortunately, that included the
international speakers whom
we had asked to give keynote
addresses.
Where the lecture is
going next:
Various questions
Question #1
Question #1
In the coming century,
should our society’s goal be
‘happiness’ rather than
GDP?
Question #2
Question #2
In a well-off country, how
might human progress -emotional prosperity not just
financial prosperity -- be
assessed?
Question #3
Question #3
Could physiological
measures -- biomarkers -- be
used as proxies for wellbeing?
Question #3
Could physiological
measures -- biomarkers -- be
used as proxies for wellbeing?
Question #4
Question #4
What recommendations were
made by the (Stiglitz)
Commission on Human
Progress set up by Nicholas
Sarkozy?
Let’s return for a moment to the
microeconomics of human
well-being
What have we learned?
Big effects
Unemployment
Divorce
Marriage
Bereavement
Friendship networks
Health
[No effects from children]
There is also an
intriguing life-cycle
pattern
The pattern of a typical person’s
happiness through life
Average life satisfaction score
5.6
5.5
5.4
5.3
5.2
5.1
5.0
4.9
15-20
21-30
31-40
41-50
Age group
51-60
61-70
This holds in various settings
This holds in various settings
For example, we see the same
age pattern in mental health
among a recent sample of
800,000 UK citizens:
[Blanchflower and Oswald, Social Science & Medicine, 2008]
New
Perspectives
The
probabilityon
ofJob
depression by age
Satisfaction
Well-Being
Males, LFS data and
set 2004-2006
0.02
DTI’S FOURTH
LABOUR MARKET RESEARCH CONFERENCE
ORGANISER: EMPLOYMENT MARKET ANALYSIS & RESEARCH (EMAR)
Regression coefficient
0.015
0.01
0.005
0
-0.005
-0.01
1938
1942
1946
1950
1954
1958
1962
1966
Year of birth
1970
1974 1978
1982
1986
1990
New
Perspectives
onamong
Job females: LFS data
Depression
by age
Satisfaction
and Well-Being
2004-2006Q2
DTI’S FOURTH
LABOUR MARKET RESEARCH CONFERENCE
0.002
ORGANISER: EMPLOYMENT MARKET ANALYSIS & RESEARCH (EMAR)
Regression coefficient
0
-0.002
-0.004
-0.006
-0.008
-0.01
-0.012
-0.014
1942
1946
1950
1954
1958
1962
1966
Year of birth
1970
1974
1978
1982
1986
1990
Obviously life is a mixture of ups
and downs
Much of the newest research
follows people through time.
eg. Andrew Clark’s work
The unhappiness from
bereavement
Human beings also bounce
back from, say, disability.
Work with N. Powdthavee, Journal of Public
Economics, 2008
Life-Satisfaction Path of Those Who Entered Disability
at Time T and Remained Disabled in T+1 and T+2
BHPS data 1996-2005
6.5
6.0
Mean Life Satisfaction
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
T-2
T-1
T
T+1
T+2
However, there is a downside to
that adaptability (eg. marriage)
However, there is a downside to
that adaptability (eg. marriage)
And should you invest in a
baby?
Happiness and children
But people do not seem to adapt to
joblessness
An important question in a
modern society is the
impact of divorce.
Divorce (eventually) makes
people happier
Divorce (eventually) makes
people happier
What about money and
happiness?
A key social-science fact
A key social-science fact
The data show that richer
people are happier and
healthier.
The same phenomenon holds
true at the cross-sectional level
for nations.
Life Satisfaction and GDP Per Capita
World Values Survey
Life Satisfaction = -0.9 + 0.8 * Log GDP (t=8.3)
COL
8
7
NGA
6
5
4
TZA
DNK
IRL
CHE
ISL
AUT
NLD
FIN
CAN
NZLSWE
NOR
DEU
BEL USA
Australia GBR
VEN
SLV
ARG
SVN ITA
BRA
SGP
DOM
CHL
URY
CZE
ESP
ISR
PRT
IDN
FRA
GRC
PHL
CHN
VNM
JPN
HRV
PER IRN
POL
KOR
MAR
SVK
ZAFEST
BGD
BIH
HUN
JOR DZA
TUR
UGA
AZEEGY
BGRLVA
ROM
ALB
IND
MKD
LTU
PAK
BLR
RUS
GEO
MDA
UKR
ARM
MEX
MLT
LUX
ZWE
2000
5000
10000
20000 35000 60000
GDP per capita in US$ at PPP (log scale)
The road to nowhere?
• Growth in income is now not
correlated with growth in
happiness
• This is the “Easterlin paradox”
The Man Behind the 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
Life-satisfaction country averages
Italy
Ireland
Germany
Netherlands
3.8
3.6
3.4
3.2
3
2.8
2.6
1974
1982
1990
1998
2.4
2006
Average GHQ Psychological Distress Levels
Over Time in Britain: BHPS, 1991-2004
11.30
Average GHQ-12 (likert)
11.25
11.20
11.15
11.10
11.05
11.00
10.95
10.90
1991-1994
1995-1999
2000-2004
Might this have something to
do with work getting more
stressful?
[Yes]
Work by Francis Green, Keith Whitfield,
et al.
Proportion of High-Strain Jobs
30
25
20
% 15
10
5
0
1992
1997
Males
2001
2006
Females
Green (2008) Work Effort and Worker Well-Being in the Age of Affluence
Source: Skills Survey series
What of well-being among
the young?
Helen Sweeting et al
“GHQ increases among Scottish 15
year olds 1987–2006” Social Psychiatry
& Psychiatric Epidemiology (2008).
Her team assesses whether life
is getting more stressful for
young people.
Mental strain in young Scots in 1987
50
% 'cases'
40
30
males
females
20
10
0
1987
1999
2006
Mental strain in young Scots in 1999
50
% 'cases'
40
30
males
females
20
10
0
1987
1999
2006
Mental strain in young Scots by 2006
50
% 'cases'
40
30
males
females
20
10
0
1987
1999
2006
Equivalent results have been
found for adults in the
Netherlands, UK and Belgium.
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.
So there is much evidence that
all this extra money we have
today is not doing a lot for us.
Easterlin’s Paradox.
There has recently been a
critique of Easterlin’s idea
There has recently been a
critique of Easterlin’s idea
Betsey Stevenson and Justin
Wolfers have argued that
economic growth does buy
happiness.
Brookings Papers, Spring 2008
Their work is extremely valuable
Their work is extremely valuable
But ultimately I think they probably
have (approximately) the wrong
answer.
•
Much of their paper is concerned
with cross-section patterns.
•
In the long time-differences, which is
the appropriate test, little is statistically
significant in 1973-2007 European data.
• Another key difficulty is that we
know unemployment movements –
omitted from most regression
equations -- affect mental wellbeing.
Di Tella et al AER 2001
Moreover, Stevenson and Wolfers
agree that Americans have if
anything become less happy over
the last 30 years.
Overall
I would say that currently the
balance of the evidence
favours Easterlin rather than
Stephenson-Wolfers.
[though it is bad science for us ever to
close our minds, so we must watch for
new evidence as it accumulates]
But many general economists
have low life-satisfaction when
they hear about this research.
They say:
Should we actually pay
attention to happiness data?
The tradition of economics has
been to ignore what people say
about the quality of their own
lives.
The tradition of economics has
been to ignore what people say
about the quality of their own
lives.
Many are opposed to the idea
of measuring ‘happiness’.
I always liked the retort:
I always liked the retort:
If molecules could talk, would
physicists refuse to listen?
A. Blinder
I always liked the retort:
If molecules could talk, would
physicists refuse to listen?
A. Blinder
So how could we move forward?
So how could we move forward?
• Brain-science correlates as a
validation
So how could we move forward?
• Brain-science correlates as a
validation
• Physiological correlates as a
validation
RD Lane et al American Journal of
Psychiatry July 1997.
“Neuroanatomical correlates of
happiness, sadness, and disgust”
Brain Responses in Two Pictures
(MRI Scans)
Source: Richard Davidson, University of Wisconsin
Another study
H. Davis et al Brain Imaging and
Behavior, June 2008.
Another study
H. Davis et al Brain Imaging and
Behavior, June 2008.
“fMRI BOLD signal changes in elite
swimmers while viewing videos of
personal failure”
An alternative approach is
EEG:
A brain-science approach (Urry
et al Psych. Sci. 2004)
But, for a sceptic, there is a
major difficulty.
The Problem:
Biological data only validate
well-being scores in so far as
they are unambiguously
measures of utility or
‘happiness’.
The next few slides are
fractionally more technical.
Could we exploit neo-classical
economic theory to assess the
validity of well-being data?
Think not about people but
about places.
Joint work with Steve Wu
• New data from the Behavioral Risk
Factor Surveillance System
(BRFSS)
• 1.3 million randomly sampled
Americans
• 2005 to 2008
• A life-satisfaction equation
Then we go to the 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
•
•
•
•
•
•
•
•
•
•
•
•
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
•
•
•
•
•
•
•
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.
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.
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
To conclude across US states:
There is a close match between
life-satisfaction scores and the
quality of life calculated using
(only) non-subjective data.
Next, consider the Stiglitz
Commission’s Findings
Stiglitz Report 2009:
“Measures of .. objective and subjective wellbeing provide key information about people’s
quality of life. Statistical offices [worldwide]
should incorporate questions to capture
people’s life evaluations, hedonic
experiences … in their own survey.” P.16.
Executive Summary of Commission Report.
“Emphasis on growth is
misguided”
“Beyond GDP”
“Measuring
what matters”
Happiness is the new GDP
Smile, and the economy smiles with you. Factory workers in Macedonia.
The Report’s Arguments
The Report’s Arguments
• Life is now more complex
The time has come to adapt our system of
measurement … to better reflect the
structural changes which have
characterized the evolution of modern
economies.
• Services dominate
In effect, the growing share of services
and the production of increasingly complex
products make the measurement of output
and economic performance more difficult
than in the past.
In this country
In this country
In 1900, there were 1 million
coal miners (5% of the
workforce).
In this country
In 1900, there were 1 million
coal miners (5% of the
workforce).
Today there are approximately
1,000.
• We need to measure well-being
per se
A… unifying theme of the report, is that
the time is ripe for our measurement
system to shift emphasis from measuring
economic production to measuring
people’s well-being.
• Inequality itself matters
Recommendation 7: Quality-of-life
indicators in all the dimensions covered
should assess inequalities in a
comprehensive way.
• Official statistics should blend
objective and subjective wellbeing data
Recommendation 10: Measures of both
objective and subjective well-being provide key
information about people’s quality of life.
Statistical offices should incorporate questions to
capture people’s life evaluations, hedonic
experiences and priorities in their own survey.
• Sustainability must be a
criterion
Recommendation 11: Sustainability assessment
requires a well-identified dashboard of
indicators…the components of this dashboard
should be … interpretable as variations of some
underlying “stocks”. A monetary index of
sustainability has its place in such a dashboard
Where might research
head in the future?
Biomarkers and their
possible uses
An interesting border is between
happiness and medicine
An interesting border is between
happiness and medicine
•
Is it possible that we can find
physiological correlates with human
well-being?
•
Perhaps to broaden the standard
policy goal of GDP?
Some of our latest work:
Joint with Nicholas Christakis (Harvard) and
David Blanchflower (Dartmouth)
Statistical links between the
heart and income and
happiness.
To clinicians
High blood pressure is
potentially a sign of mental
strain and low well-being
But how about high blood
pressure as a national
measure of well-being?
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
Important work by Andrew
Steptoe of UCL:
Whitehall II data
Salivary cortisol (Steptoe data)
10
P = .009
nmol/l
9
8
7
6
5
1 Low
2
3
Happiness quintiles
4
8 samples (08:00 – 22:30)
Adjusted for gender, age, occupational grade, smoking, bmi, and GHQ
5 High
Heart rate
Men
Women
P = .017 in men
80
bpm
76
72
68
64
1 Low
2
3
4
5 High
Happiness quintiles
Adjusted for age, occupational grade, concurrent
physical activity, smoking, bmi, and GHQ score
Steptoe et al, 2005
PNAS
It is known that heart rate
rises under stress.
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
• Nicolas Troubat et al (2009)
European Journal of Applied
Physiology
20 chess players – international
and national-level players. They all
played against a computer.
The computer standard was
deliberately set one level
higher.
The computer standard was
deliberately set one level
higher.
So all the players lost against
the computer.
What happened?
• Average heart-rate rose 11 beats a
minute
• On average, players used up 140
calories playing the game
• Overall, the physiological changes
were “similar…those … in
moderate physical exercise”.
In our own work, we study
physiological data -- measuring
heart rate, blood pressure,
fibrinogen, and C-reactive protein - on a random sample of 100,000
English citizens.
Pulse: Average heart rate is
about 72 beats per minute.
Heart-Rate Equations
Pulse and Money
We find that for every extra
£40,000 pounds a year, heart
rate is 1 beat a minute
slower.
Interesting patterns emerge
• First, there are well-determined
income gradients in (and only
in) heart-rate and C-reactive
protein equations.
• Second, heart rate seems to
have potential as a proxy
measure for mental strain, so
might eventually be usable as a
measure of negative ‘utility’ in
an economist’s framework.
• Third, education has little effect
within biomarker equations.
• Fourth, it is more important to
control for diet than has been
traditionally recognized in the
health-economics literature.
• Fifth, biomarker variables work
powerfully in well-being
equations.
Thus:
There are deep connections
between happiness, money
and health.
Some ideas to end:
Conclusions
#1 In the next century, new
measures of human well-being
may be required.
Conclusions
#2 As social scientists, we
probably need to understand
better the connections between
mental and physical health.
Conclusions
#3 Heart-rate and blood
pressure data have particular
potential in policy design.
Conclusions
#4 Social scientists will, I
believe, collaborate more with
doctors and epidemiologists.
My hunch
My hunch
The methods of the economics
of happiness and mental wellbeing will slowly enter public
life.
Other important applications
Other important applications
The valuation of environmental
amenities
Other important applications
The valuation of environmental
amenities
The valuation of health states
Other important applications
The valuation of environmental
amenities
The valuation of health states
The valuation of emotional
damages for the courts.
Let me close by returning to
Lionel Robbins, a distinguished
thinker and economist.
Conventionally:
• Economics is a social science
concerned with the efficient
allocation of scarce resources
We owe this definition to Lionel
Robbins of the London School
of Economics.
For a long time, it served us
well.
But perhaps the time has come
to think differently – and to
define economics differently.
An alternative definition for 2009:
An alternative definition for 2009:
• Economics is a social science
concerned with the best way to
allocate plentiful resources to
maximize a society’s well-being
and mental health.
There is considerable evidence:
• (i) In the rich countries,
happiness is running flat or
declining
• (ii) Levels of GHQ mental-strain
are rising.
These (uncomfortable) facts
raise fundamental intellectual
and policy questions for our
generation and beyond.
Looking ahead
Policy in the coming century
may need to concentrate on
non-materialistic goals.
Looking ahead
Policy in the coming century
may need to concentrate on
non-materialistic goals.
GNH not GDP.
Thank you.
Emotional Prosperity
Andrew Oswald
Research site: www.andrewoswald.com
I would like to acknowledge that much of this work is joint
with coauthors Andrew Clark, Nick Powdthavee,
David G. Blanchflower, and Steve Wu.