Presentation on theme: "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."— Presentation transcript:
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 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
Stiglitz-Sen-Fitoussi Report 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
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 Source: BHPS, 1997-2003. N = 74,481
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?
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 Well- being Scale (WEMWBS) Ive been feeling optimistic about the future Ive been feeling interested in other people Ive had energy to spare Ive been thinking clearly Ive been feeling good about myself Ive been feeling confident Ive been able to make up my own mind Ive been feeling loved Ive been feeling cheerful
Happiness and mental well- being 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 JEbrecht MHextall JKirtley LGTaylor ADyson MWeinman J PSYCHONEUROENDOCRINOLOGY Volume: 29 Issue: 6 Pages: 798- 809 Published: JUL 2004
Every subject received a standard 4mm-punch biopsy, and the healing progress was monitored via high-resolution ultrasound scanning.
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]
The probability of depression by age Males, LFS data set 2004-2006 -0.01 -0.005 0 0.005 0.01 0.015 0.02 19381942194619501954195819621966197019741978198219861990 Year of birth Regression coefficient
-0.014 -0.012 -0.01 -0.008 -0.006 -0.004 -0.002 0 0.002 1942194619501954195819621966197019741978198219861990 Depression by age among females: LFS data 2004-2006Q2 Year of birth Regression coefficient
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). Age- period-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. Easterlins Paradox.
There has recently been a critique of Easterlins idea
Betsey Stevenson and Justin Wolfers have argued that economic growth does buy happiness. Brookings Papers, Spring 2008
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 well- being. 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.
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 compensating- differentials 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
Gabriels 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
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 Commissions Findings
Stiglitz Report 2009: Measures of.. objective and subjective well- being provide key information about peoples quality of life. Statistical offices [worldwide] should incorporate questions to capture peoples 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.
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 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 peoples 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 well- being data Recommendation 10: Measures of both objective and subjective well-being provide key information about peoples quality of life. Statistical offices should incorporate questions to capture peoples 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
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.
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.