1. Is Man A Social Animal? Andrew E. Clark (Paris School of Economics and IZA) http://www.pse.ens.fr/clark/ CAGE Centre for Competitive Advantage in the Global Economy Modern Society and the Economics of Happiness Wednesday 5th October, 5.30pm – 7.00pm

2. Dick Easterlin, in a paper written 40 years ago, underlined what looked to be a problem: growing GDP per capita did not go hand-in-hand with growing happiness. FIGURE 1: Happiness and Real Income Per Capita in the US, 1973-2004

3. He not only set out the problem, he also proposed solutions, based on income comparisons.  I compare my income to that of others.  I compare my income now to what I used to receive in the past. In both cases, rising income for everyone will not lead to greater happiness (at least not in the long run).

4. There has been a huge amount of work suggesting that this is true.

5. And I believe it.

6. There has been a huge amount of work suggesting that this is true. And I believe it. Which begs the question: “If income doesn’t make us happier over time, then what does?”

7. Quite a bit of my research over the past 10 years has been on this topic. Let me give you a brief flavour of some of it with respect to some of the big issues that we arguably face as a modern society. First: unemployment

8. UK UNEMPLOYMENT ROSE BY 80,000 IN THE THREE MONTHS TO JULY THIS YEAR TO 2.51 MILLION, ACCORDING TO THE OFFICE FOR NATIONAL STATISTICS (ONS). THAT IS IS THE LARGEST INCREASE IN NEARLY TWO YEARS.

9. Is that bad? Yes it is! Unemployment is hugely important for individual well-being ECHP: Satisfaction Scale 1-6. 500 000 individuals. But do you adapt to it, and is it relative?

10. There are comparison effects with respect to unemployment  Unemployment hurts less the more of it there is around (the psychological cost of unemployment is lower in high-unemployment regions) This effect is far stronger for men, especially prime-age men (16-50), than for women.

11. Social Comparisons with respect to Unemployment? The well-being gap between employees and the unemployed is smaller in regions with greater unemployment.

12. Unemployment also hurts less when I share it with other household members. Consider a household with two adults who are active in the labour market (i.e. employed or unemployed). 1)Best situation (for my well-being): I work and my partner works (E-E)

13. Unemployment also hurts less when I share it with other household members. Consider a household with two adults who are active in the labour market (i.e. employed or unemployed). 1)Best situation (for my well-being): I work and my partner works (E-E) 2)Less good: I work and my partner is unemployed (E-U)

14. Unemployment also hurts less when I share it with other household members. Consider a household with two adults who are active in the labour market (i.e. employed or unemployed). 1)Best situation (for my well-being): I work and my partner works (E-E) 2)Less good: I work and my partner is unemployed (E-U) 3)And the worst? It’s not U-U, but rather U-E…

15. It should however be underlined that these comparisons effects are arguably marginal. Comparisons might make unemployment a little less bad, but it remains bad even so. For most people, unemployment is a deeply depressing experience, and should continue to attract policy attention.

16. There is equally only little adaptation to unemployment Unemployment starts bad, and stays bad

17. Second subject: Marriage and Divorce

18. It looks like we get used to marriage

19. And we equally get used to divorce Actually, if anything divorce is a good idea, in that both sexes seem to end up happier after it (divorce is rational). This only applies to ending unhappy marriages: if you’re happily married, then stay put!

20. And we can’t even count on our children

21. There are also potential social comparisons in the effect of divorce: Is divorce easier to live with in a high-divorce area For adults? For the children?

22. Third topic: Obesity

23. Obesity: the UK is a top-ten country ADULT OBESE POPULATION Nauru 78.5% Tonga 56.0% Saudi Arabia 35.6% United Arab Emirates 33.7% United States 32.2% Bahrain 28.9% Kuwait 28.8% Seychelles 25.1% United Kingdom 24.2% DIABETES IN ADULTS Nauru 30.7% United Arab Emirates 19.5% Saudi Arabia 16.7% Bahrain 15.2% Kuwait 14.4% Oman 13.1% Tonga 12.9% Mauritius 11.1% Egypt 11.0%

24. Greater BMI is associated with lower well-being, at least past some critical level We estimated this critical level to be around 23 for women, and 25 for men: very close to the WHO- mandated “normal” BMI of 25. On average: Own obesity reduces well-being Partner’s obesity reduces well-being But two partners who are both obese are just as happy as two partners who are not obese

25. Last topic: Religion Unemployment starts bad, and stays bad

26. Religion is less important for the younger

27. If the unemployed are happier living with other unemployed, and the employed are happier living with other employed…. Then the religious should be happier living in religious areas, and atheists should be happier living with other atheists. Right?

28. Wrong. Recent work on European Social Survey Data shows that: 1)The religious are happier when they live in religious regions 2)But so are atheists The religious “spillovers” are then mostly positive. Everyone likes living with the religious.