Happiness economics

published July 12, 2010, Manila Standard Today

The idea of economists and psychologists putting their heads together to measure the human condition more accurately is nothing new. The gross domestic product is not the only yardstick in determining how better off, or worse off, nations are.
Indeed the conventional national income method, while widely used because of its objectivity, transportability and comparability (the same computation can be used from economy to economy), has several flaws. First, while it provides a fairly accurate picture of aggregate wealth, it does not show us how that wealth is distributed across regions. Even GDP per capita, which shows the relationship between national income and the population, still does not reflect the disparity in the quality of life between the citizen living in the financial capital and another citizen living in a remote province, even tough theoretically they have the same per-capita income.

Furthermore, there are various other costs and activities not included in the GDP story, say the contribution of the informal sector (unregistered small businesses, housewives) or the opportunities lost due to devastation by natural calamities. Gross National Product also does not reflect the social costs of family members’ migration to foreign lands.

In 1972, the king of Bhutan coined the term Gross Happiness Index to express how people felt about their living conditions. Bhutan, of course, is a predominantly Buddhist—and highly spiritual, if not transcendental, society. Still, those from the Western world saw the value of what the king was trying to do. Social scientists later on found out that the standards are not peculiar to Bhutan or to any Buddhist society. The pillars of happiness are transcultural: people generally report greater subjective life satisfaction if they have strong and frequent social ties, live in healthy ecosystems and experience good governance, among others.

Further studies yielded the following:

• Money correlates with happiness, but beyond a certain level, the rate diminishes with more money (This is also known as the Easterlin paradox). Then again, it is not money per se but the economic freedom and security it brings that is responsible for a feeling of well-being.

• The amount of spare time people have, as well as their control over how much spare time they have, correlates with happiness.

• Feeling in control of one’s own life influences happiness. Conversely, losing one’s job can be a great source of unhappiness.

• Subjective well-being is linked to life expectancy.

• People under democracy or federalism, forms of participative government, generally feel happier.

• Useful action generally brings positive feelings.

Of course, the accuracy and reliability of people’s responses to such happiness surveys will always be open to questions. Methods and responses may in themselves vary. Governments, for instance the hermit kingdom of North Korea, use massive brainwa... okay, propaganda... to condition the minds of their citizens that they practically live in paradise, regardless of the glaring lack of basic necessities like food, health care and education. Then there is the matter of inherent individual or cultural differences: one person being interviewed may be an optimist; the next fellow may simply be ill-humored.

The measurement of happiness/ well-being should be seen as a complement to the more conventional and objective measures. What items correlate? Why? How can the relationship be improved? The fact is that people go beyond measurable factors and wander into the realm of the subjective because the pursuit of that feeling is the reason people and societies do what they do.

* * *

The social networking site Facebook did its own observations of Americans users’ happy and not-so-happy status posts. The words “happy”, “awesome”, smileys, or posts to the contrary, were used. Facebook found that Americans were generally happier on Fridays than they were on Mondays, and that happiness peaks coincided with holidays (Thanksgiving, Christmas) and special events (inauguration of Barack Obama). The sad days coincided with not-so-happy events —for example, two of the saddest days in Facebook were when actor Heath Ledger and singer Michael Jackson died.

We here in the Philippines don’t need Facebook to tell us that we experienced a surge in happy emotions right about the end of last month, in the days leading to and immediately after the inauguration of the new President. Filipinos were in some sort of a high, hearing all the promises of good governance and a better life for all. We were happy at the thought that finally, something wold be done to eliminate graft and corruption in government.

Actually, we Filipinos are an exceptionally “happy” lot. Have we not often remarked at our ability to make light of—even joke about—the situation, no matter how dire it is? Happiness surveys conducted by the Social Weather Stations have revealed that despite all our problems, more Filipinos expect happy Christmases, for example, than those who expect they would be sad.

Then again, we might be confusing “happiness” for something else, like “jolly disposition” or “coping mechanism.” A Gallup poll paper, published in the Journal of Personality and Social Psychology, found that while life satisfaction usually rises with income, positive feelings don’t necessarily follow. The survey, conducted in 2005 and 2006 in 132 countries and with 136,000 respondents, is the first to differentiate between long-term feelings of well being and positive (though fleeting) day-to-day emotions. (Unfortunately, what are available in the Internet are articles about the study, not the study itself.)

Is happiness then a state of mind that varies from day to day, or is it a general disposition, a frame of mind that enables one to be optimistic, productive, and even benevolent towards his fellow man? This latter kind gives way to a virtuous circle—happy people tend to do more, and better. This kind of happiness is what is truly empowering. A government would want happy citizens. But how can you be empowered of you don’t have a job that fulfills you, if you don’t know whether the next typhoon will destroy your shanty, if you can’t even send your kids to school?

All these bring us back to Maslow’s famous triangle on the hierarchy of needs. Generally, basic needs must be addressed first before anyone can even dare to be happy in other ways. Of course there are a few exceptions—those who deliberately renounce material comforts in favor of a more altruistic cause (think volunteers who spend their lives teaching children in remote areas), for instance. Still, these people are not forced to live in dire conditions. They are not hostage to a particular kind of life.

Indeed, the choice to determine the course of one’s life spells all the difference in the world.