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U.K. to Start Measuring Happiness; Should Everybody Else?

4 years ago
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LONDON -- Well, you can't fault the British government for lack of initiative. In addition to a sweeping reorganization of its National Health Service and a massive overhaul of its welfare system, Prime Minister David Cameron has put one more thing on Whitehall's "to do" list: measuring the happiness of its citizens.

Beginning Nov. 25, the Office of National Statistics will be asked to produce measures that gauge Britons' psychological and environmental well-being. Those questions will be added to the government's existing household survey as early as next spring. The idea is to generate a subjective assessment of citizens' happiness, alongside a more objective sense of how well they are achieving their "life goals." The new data will be published on regular intervals -- and, according to Cameron, will also be used to inform government policy going forward.

If that all sounds terribly touchy-feely for the typically buttoned-up Brits, it isn't. It's part of a growing movement within policy-making circles to broaden our understanding of economic progress away from narrow economic measures like GDP and toward quality-of-life indicators such as health care availability and environmental sustainability.

First championed a year ago by an international panel chaired by renowned economists Joseph Stiglitz and Amartya Sen, the idea of systematically measuring subjective well-being has already taken hold in France and Canada. One country -- the Kingdom of Bhutan -- actually measures its progress in terms of "Gross National Happiness."

Lately, these debates have also found their way into the United States. In his new book, "The Politics of Happiness: What Government Can Learn From the New Research on Well-Being," former Harvard University President Derek Bok makes an impassioned case for a profound re-thinking of American domestic policy goals based on the burgeoning happiness literature in economics and psychology.

Bok notes that neither increasing wealth -- nor reducing inequality -- has had much of an impact on American self-reported well-being in the last 35 years, despite being prominent policy goals of successive administrations during that time. Rather, Bok argues, the U.S. government would do better to focus on the myriad things that actually do make people happy -- e.g., cushioning the blow of unemployment, promoting stable marriages, treating depression and encouraging civic participation -- if it really wants to improve people's lives.

What all of these analyses have in common is a desire to measure well-being in terms that go beyond the purely economic. And who can argue with that? But as I pointed out when writing about this topic last year, moving beyond GDP in our conception of "progress" proves more complicated than meets the eye.

For starters, if you toss out GDP, what metric do you use in its place? Stiglitz et al. favor what they call a "dashboard" approach, wherein you construct composite indices of well-being across a range of non-economic variables (mental health, carbon emissions, citizen participation, etc.). Institutions can then combine these indicators in different ways to measure and track the things that matter most to them. But as Oxfam Chief Economist Duncan Green pointed out on his blog, that approach "works fine if all parties can agree on the particular composite that best reflects a particular issue, but otherwise, everyone grabs the [different] indicators that best 'prove' their case, and the debate rapidly gets polarized and stuck."

In contrast, British economist Richard Layard prefers relying on self-reported life satisfaction (happiness), which he predicts will replace GDP within the next 25 years. As with Stiglitz, satisfaction would be reported across a number of domains (health, family, work, income, community, environment, etc.), but it would be a fundamentally subjective indicator. The problem there, Duncan Green (and others) have noted, is that it isn't clear how you compare subjective evaluations of happiness across countries. Moreover, if people claim to be happy despite lacking a political voice . . . or a clean environment . . . or a healthy income, shouldn't those things matter on their own merits?

Which brings us to a problem highlighted by University of Maryland government professor Carol Graham in her provocatively titled book, "Happiness Around the World: The Paradox of Happy Peasants and Miserable Millionaires." Graham studied happiness levels in countries as diverse as Afghanistan and the United States. She found that there are certain basic things that appear to yield happiness everywhere: health, jobs and economic stability.

But Graham also discovered that people in really tough places, like Afghanistan, appeared just as happy as others in less difficult environments, probably -- she speculates -- because they learned to adapt to the presence of violence, crime, corruption and poverty. As she notes when summarizing her main findings: "people can adapt to tremendous adversity and retain their cheerfulness, while they can also have virtually everything -- including good health -- and be miserable." And from a policy standpoint, it's not entirely clear what you do with that insight. (Full disclosure: I know Graham professionally.)

Finally, there's also new research out by American economists Betsey Stevenson and Justin Wolfers showing that if you use the right measures, GDP actually holds up pretty well as a proxy for happiness. And that's because -- according to them, at least -- GDP relates exceptionally well with other measures of subjective well-being such as smiling, pride and enjoyment of life. It also tracks well with objective measures of well-being, such as those contained in the U.N. Human Development Index, including adult literacy, life expectancy and educational enrollment. (Stevenson and Wolfers also find, contrary to conventional wisdom, that increasing levels of absolute wealth actually do make people -- and countries -- happier.)

So . . . where does this all leave us? I'm not entirely sure. But these are the kinds of questions that policy-makers like David Cameron will need to grapple with if we're going to both track -- and productively utilize -- our insights about human happiness in the policy-making world.

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