What do we mean by "happiness"? The relevance of subjective wellbeing to social policy.

AuthorDuncan, Grant
PositionPolicy Papers

Abstract

Recent research in economics, sociology and psychology has re-ignited interest in human happiness, and this interest has extended into social policy research and analysis. Happiness research has challenged some of the axioms of standard economic theories of utility and welfare, but the assumptions underlying this research remain utilitarian. Further, there are significant semantic problems for happiness surveys concerning the contemporary uses of the words happiness and happy. While happiness research has stimulated some self-critical reflection about social and economic policy priorities, it has yet to provide any convincing basis for the setting of policy goals or the evaluation of outcomes.

INTRODUCTION

The Ministry of Social Development describes the term "social wellbeing" as "comprising individual happiness, quality of life, and the aspects of community, environmental, and economic functioning that are important to a person's welfare" (2004:24). The purpose of this paper is to examine the cross-cultural, ethical and political uses of happiness. This leads on to consideration of growing international research on this topic. Happiness research encompasses the fields of psychology, sociology and economics, and authors on this topic have advanced various prescriptions for public policy. An indication of local interest in the policy relevance of happiness is revealed by the Ministry's Social Wellbeing Survey 2004 (Smith 2004). This survey included questions on happiness and satisfaction with life. What, then, are the likely uses of such a survey, what considerations might there be when interpreting its results, and what are the difficulties in our understanding of the construct of happiness? What kind of evidence base can happiness research provide for social policy development?

First, it is worth acknowledging that the ethical issue of how individuals may live a better or happier life has been discussed and explicitly linked to questions of politics and good government at least since Aristotle's time. The term happiness, furthermore, occupies a central place in modern political thought, appearing as a key term in various seminal texts of liberal and utilitarian political economy. For example, in Paine's Rights of Man [1790], "the general happiness" (the happiness of all, not just the ruling class) is the main objective of any just government (1996:164). The link between happiness and economic production was made by T.R. Malthus in his Essay on the Principle of Population (1993 [1798]). He deems "happy" those periods in a nation's history where there is sufficient arable land for the expansion of agriculture and, above all, the rapid increase of the population.

The "principle of utility" set forth in Jeremy Bentham's introduction to the Principles of Morals and Legislation [1789] is still influential. He states that:

A measure of government ... may be said to be conformable to or dictated by the principle of utility, when ... the tendency which it has to augment the happiness of the community is greater than any which it has to diminish it (Bentham, in Warnock 1962:33). Individual happiness is determined by a "hedonic calculus" of pleasure and pain; and collective, "popular" happiness is the aggregate sum of the happiness of its individual members. Individual welfare or happiness is a matter of subjective preference, and thus depends on the freedom to choose whichever path gives greater pleasure. It is thus not up to any government to decide for us what specifically is in the best interests of our happiness as individuals, but its actions must be guided by a calculation of what will maximise the aggregate "happiness of the community". (2)

The implied subjectivism of Bentham's principle of utility was challenged by twentieth-century economic and psychological theories. American behaviourism rejected introspective research methods and any concepts reliant on subjective judgements. Instead, objective observation of actual behaviours was considered to be the only genuinely scientific approach for psychologists. Similarly, economic theory retreated from subjective assumptions about decision-making. Giving a new turn to utilitarian thinking, economic theory held that subjective preference-satisfaction cannot be compared between people or aggregated. Instead, Samuelson's notion of "revealed preference" situated the question of utility in the observable choices made by consumers, the prices and volumes of which can be compared and aggregated; for example, into national statistics such as gross domestic product.

This, however, has not been a very satisfactory approach for questions of wellbeing. If two parties exchange goods or services for money in a free market, then presumably both parties expect that they will be better off--a marginal increase in utility--as a result. But, the relationship between economic production and welfare is not always so simple. Some research findings suggest that people do not always predict very accurately the improvement in subjective wellbeing they will actually derive from future purchases or income enhancements (Frey and Stutzer 2003). Sometimes greater utility could be derived from activities that create less economic output. For example, eating take-away food may result in more statistically measured economic output than growing and cooking one's own food, but its value in terms of nutritional wellbeing may be inferior. Or, a parent could derive greater utility from working, earning and spending less, and having more time for family activities. Changes in the volume of consumption of goods, reflected in GDP figures, are "measured quite independently of any utility that households may, or may not, derive from consuming [them]" (United Nations Department of Economic and Social Affairs 2004:para. 1.76). The discontinuity between "economic value added" and improvement in "genuine welfare" is one reason for the development of sets of broader social wellbeing indicators such as the Social Report or the Genuine Progress Index. (3)

HAPPINESS AS AN OBJECT OF SCIENTIFIC RESEARCH

At the historical origins of economic and political theory lurks the notion of happiness, and recent research has now "rediscovered" self-reported subjective wellbeing. Challenges to simplistic notions of economic utility and growth came from Easterlin (1974) and Scitovsky (1976). Easterlin used national surveys of subjective wellbeing (happiness and satisfaction with life) to question the supposed link between economic growth and welfare. He concluded that an increase in aggregate income does not "buy" greater popular happiness. Scitovsky hypothesised that, beyond a certain level of material comfort, further wealth does not add to wellbeing--and may even detract from it--unless it is accompanied by satisfying social networks and intellectually stimulating leisure activities.

In the last three decades, happiness research in social psychology and economics has grown rapidly, with frequent use of national "happiness surveys" and statistical studies to uncover the factors that are likely to increase happiness. Such research is often based on the premises that self-reports of individual happiness tell us something valid about "utility", (4) and sometimes that they can be meaningfully aggregated to provide comparable measures of the collective happiness of social groups, communities or whole nations (e.g. Inglehart and Klingemann 2000). Alternatively, multivariate analyses can be used to identify the social, economic and demographic factors that are correlated with individual subjective wellbeing (e.g. Smith 2004).

Researchers use happiness as an indicator of welfare or utility, from a subjective viewpoint, independently of "rational" economic choice. Amartya Sen, for instance, describes the theory of revealed preferences as an "empty shell" that does not give a sufficient account of human behaviour and needs (Sen 1996:488). While each choice made in a market may reflect some form of "preference", the assumption of standard economic theory that this means people are thus necessarily pursuing "what is best for them" is questionable, instead, self-reported subjective wellbeing is used to uncover the kinds of socio-economic conditions and public policies that may maximise "actual" welfare, or happiness.

Further, in order to support the study of happiness, Easterlin (1974) and, more recently, Layard (2003) have claimed that happiness, as a construct, is stable and valid. It is claimed that all languages and cultures recognise the same concept, and hence that cross-national comparisons of the results of happiness surveys are valid. Easterlin (1974) relied on the translation efforts made by the social-surveyer Cantril in the 1960s, and concluded that, since the non-response rate to Cantril's multi-national surveys was "generally low", "happiness is an idea that transcends individual cultures" (Easterlin 1974:93). Later, Easterlin argued (tautologically) that the happiness responses of different socio-cultural groups could be compared because surveys had found that "the kinds of things chiefly cited as shaping happiness [making a living, family and health] are for most people much the same" (Easterlin 2001:208). This overlooks the fact that the means and values surrounding those common concerns are themselves quite variable...

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