Unhappy Reasoning

happyIn a New Yorker essay, Elizabeth Kolbert takes at face value the widely reported statistic that “the average level of self-reported happiness, or subjective well-being, appears to have been flat going all the way back to the nineteen-fifties, when real per-capita income was less than half what it is today”. Proceeding from the assumption that these self-reports tell us something about actual happiness, Kolbert, proceeds to muse on the policy implications, quoting ex-Harvard president Derek Bok with approval:

If rising incomes have failed to make Americans happier over the last fifty years, what is the point of working such long hours and risking environmental disaster in order to keep on doubling and redoubling our Gross Domestic Product?

Wait a minute, now. Self-reported happiness has been flat for fifty years despite rising incomes. Self-reported happiness has also been flat for fifty years despite dramatic increases in leisure and environmental quality. (Since 1965, the average American has gained about six hours a week of leisure—the equivalent of seven vacation weeks a year.) So why aren’t Bok and Kolbert asking why we bother to come home from the office, take vacations, and clean our air and water?

Either you take this happiness stuff seriously or you don’t. If you do, you can’t just pick and choose the policy implications you happen to like. If these numbers mean we have nothing to gain from earning more, then they also mean we have nothing to gain from working less.

As for me, I don’t have to worry about the policy implications because unlike Kolbert, I don’t think self-reported happiness tells us anything at all about actual happiness. If a pollster asks me “Are you happy?”, the question I’m going to answer is “Are you happier than your friends seem to be?”. Regardless of the ambient level of happiness, about half of us will always answer “No”.

A colleague of mine observes that the average American man is about 2 inches taller than a hundred years ago. But you’d never learn that from a survey that asks people “Are you tall?”. That’s because a 5’9″ man would probably have answered “yes” a hundred years ago and “no” today. And likewise, people might be far happier today than a hundred years ago, but you’d never learn that from a survey that asks “Are you happy?”

It’s downright dangerous to give credence to this sort of nonsense. It leads people like Kolbert to observe that Nigerians, with a per capita income of fourteen hundred dollars, rate themselves as happy as the Japanese, with twenty five times the per capita income. Kolbert, channeling public policy professor Carol Graham, entertains several possible explanations (maybe Nigerians have “happy DNA”; maybe the Japanese strive harder because they are malcontents; maybe people learn to adjust to living on a few dollars a day), but never manages to stumble on the most obvious explanation of all—maybe poor Nigerians say they’re happy because they’ve never seen how happy it’s possible to be. And maybe raising their incomes could help with that.


31 Responses to “Unhappy Reasoning”

  1. 1 1 Bennett Haselton

    Actually, any survey claiming that Nigerians rate themselves just as happy as the Japanese appears to be the exception rather than the rule. Most self-reported happiness rankings e.g. at
    (warning, there are some very annoying ads on that page, bit I couldn’t find any other webpage with a full list) put Japan way ahead of Nigeria. In fact most first world nations are way ahead of most poor African countries, suggesting that true poverty causes unhappiness and people are capable of reporting it accurately.

    Meanwhile, *within* the industrialized nations, the happiest ones are the ones with strong egalitarian traditions like Denmark and Canada. This fits with the findings of researchers like Richard Wilkinson:
    who have said that in different communities within developed countries, the communities with the worst health outcomes and crime rates are the ones with the greatest levels of inequality, even after controlling for absolute income levels.

    So the rules seem to be:
    1) Below a certain poverty level, people’s unhappiness is caused by how badly off they are in absolute terms.
    2) Above that level, people’s happiness is determined more by how they are doing relative to others around them, where the negative effects of low status outweigh the positive effects of high status.

    So the policy prescription suggested by this model is: If your country is so poor that people’s unhappiness is caused by a lack of basic necessities, then you should tolerate inequality for as long as it takes for capitalism to lift your country out of poverty. Then once you’ve reached the point where people’s stress is primarily caused by inequality, focus less on growing GDP in absolute terms, and more on reducing inequality.

  2. 2 2 thedifferentphil

    I largely agree with your reasoning on this. I certainly would not trade my lifestyle for one of the 1950s America or for Nigeria today. But I think that by “risking environmental diasaster,” she meant a bad future global warming outcome or the like, rather than a return to smog and river quality degradation of decades past.

  3. 3 3 Dave

    Bennet: what about the other side of that coin? Wouldn’t you be compounding misery to those who are both without basic neccessities and also in the lower caste?

  4. 4 4 drab

    My problem with the happiness question is that it presupposes happiness has a binary state in which it follows that if you say you are not happy then by definition you are sad. It is possible to be neither happy or sad, but to exist in some other alternate state, even say ambivalence. Also, attempts to overcome this through the use of a likert scale to rate happiness (as is often used in the literature) doesn’t quite seem to get at the underlying issues, which for me are why do people feel the way they do?

  5. 5 5 Windypundit

    Healthcare has improved tremendously in the last 50 years. If that hasn’t made us one bit happier, then what good will healthcare reform do?

    Actually, my first reaction on hearing the “scientific” claim that wealth doesn’t lead to happiness was the urge to ask the speaker if I could have all their useless money. My second reaction was to wonder if this meant I should start using recreational drugs.

  6. 6 6 Alan Wexelblat

    Self-reported happiness is a dreadful metric and ought not to be taken seriously by anyone. It’s extremely subject to local fluctuation and not repeatable across even the same individuals over time.

    A much more interesting correlation would be to look at the rise in income corresponding with a rise in leisure time. There are reasonable arguments to be made that well-rested workers are more productive workers, and so on.

  7. 7 7 EricK

    I think that when people are asked to rate their happiness they make at least four comparisons: They compare their situation with that of their friends, family, acquaintances, work colleagues etc; they compare with people they know of through the media (whether that be actors and sports stars, or earthquake victims); they compare their current situation with their own past; and they compare it with how they imagined they’d be now.

    This makes measurement of happiness a problematic affair to say the least! Someone who imagined they’d be earning a 6 figure salary might be far less happy with a salary of 50k than someone who felt they’d always be struggling on minimum wage. Someone who watches “Lifestyles of the Rich and Famous” might be less happy than someone who watches documentaries about people-trafficking in Africa. Alternatively the latter person might be unhappy because he now knows all about people-trafficking in Africa!

    If there was data about why people felt unhappy, that might be more useful in forming policy proposals.

  8. 8 8 Steve Reilly

    I agree with most of the points raised in the post and the comments. One additional point I’ve wondered about is the language used. Is, say, the Japanese word for “happiness” a precise equivalent of the English word, or does it have slightly different connotations that could further skew the results?

  9. 9 9 Thomas

    As a citizen of a generally prosperous country, why should I give up some of my happiness to assuage the envy that causes stress in others (some of them poor, many of them well-to-do do-gooders)? Happiness is an individual thing, not an aggregate phenomenon.

  10. 10 10 Jeremy R. Shown

    I seem to recall a quote by the great actor/philosopher Burt Reynolds along the lines of: Money can’t buy happiness, but being poor and sad is worse than being rich and sad.

  11. 11 11 Neil

    We’ve also added about seven years to our life-expectancy. I guess there is just no pleasing us.

    Happiness metrics are a truly stupid thing. Since they typically ask people to rate their happiness on a fixed scale, like 1 to 10, happiness can’t really grow anyway.

  12. 12 12 Patrick R. Sullivan

    Proverbially, ignorance is bliss.

  13. 13 13 Neil

    Proverbially, ignorance is bliss.

    Actually, that is one statement the happiness surveys contradict. They typically find that reported happiness rises with years of education.

  14. 14 14 Joe

    Wait a minute, what about the widely-reported studies reporting that happiness does go up until you get to about $10K/year, then pretty much levels off. Whatever they were measuring, it couldn’t have been comparative happiness within the demographic.

    I imagine you’d have to be careful aggregating these happiness studies because they don’t all measure the same thing.

  15. 15 15 Snorri Godhi

    [...] the widely reported statistic that “the average level of self-reported happiness, or subjective well-being, appears to have been flat going all the way back to the nineteen-fifties [...]“

    Widely reported, but wrong: happiness does go up with income and will continue to go up for the foreseeable future. That has been found by Veenhoven and Hagerty in 2003, and again by Wolfers and Stevenson in 2008:
    but some people just can’t accept facts that contradict their preconceptions.

    That, incidentally, also disposes of the theory that self-reported happiness is based on some sort of relative measurement. There is lots of evidence that it is not, including the fact that different countries with the same language report different levels of happiness. In fact, there are also significant differences between US states. (Steve L: how do you reconcile that with the principle of indifference? I have an answer, but I’d love to see if you come up with the same answer.)

  16. 16 16 ToddM

    So, suppose happiness, defined with some broad parameters, hits saturation at some income level, and also suppose it’s a bit of nebulous concept. Maybe the happiness-saturation income level varies from person-to-person. Maybe some people are happiest when working really hard, because they’ve found work that they truly enjoy. Maybe others really relish not pushing too hard. Maybe we should all have a lot of latitude to figure out for ourselves what makes us happy.

    If so, no matter which type of person I am, would I not prefer to live in a place with very high rates of pay, so I could make the easiest tradeoff between work and income to achieve maximal happiness for myself? If I’m the sort that is happier working less, I can meet my needs with fewer hours of work. And, if I’m the sort that likes working a lot, I can choose to do that, and if I really don’t like money, I could give away any excess money I might accidentally earn.

    Then, the USA must be one of the best places on earth to live. We have the most choice about how to structure our lives. It should even be possible to approximate a Nigerian lifestyle here, if that’s what floats your boat, although some aspects might be technically illegal (like soon, now, you’d need to buy health insurance). Seems like I should be able to find a barren, vast region of land, and set up a shack there without interference. If the social aspect is important, I can find a group of similar people, get a vast barren region of land, and live with them.

  17. 17 17 jrod

    I agree there is much wrong with happiness matrices. I also do think there is some merit to the golden handcuffs theory. Just speculating here but it may be because we tend not to see the lifecycle cost of things we buy and the maintenance cost. For instance you get a nice paying job and now you move from your rental to that 4 bedroom sitting a 1 acre lot. Its sweet because all your financial statements said you can afford it. Now your realize a month after moving in you have to spend your sat morning mowing the lawn, or instead of that you have to pay someone to do it which means you cannot afford to drive to that state park twenty miles away that you always wanted to get to. Or you buy a bike and think wow this costs $500 and I will be able to ride it around great, but then a year later realize I need replacement tires, also a pump, also grease for the chain and you have to buy those things every year.

    That may explain some of the unhappiness, people tend to buy that house (or anything) they can afford right now (not what if I lose my job, or have to take a pay cut will I still be able to pay for this or maintain it. (Thats part of the foreclosure issue right, also bad lending practices, but there are definitely two sides). I would be willing to bet that these unexpected costs tend to drive down happiness, and that these unexpected costs increase with the more things you are able to buy. Thats my two cents anyways.

  18. 18 18 Snorri Godhi

    Incidentally, Ruut Veenhoven’s webpage is very worth looking at:

    One finding that I like is that free nations are happy nations. Of course, free nations also tend to be rich nations, so Veenhoven did his factor analysis and discovered that freedom correlates with happiness even when wealth is factored out. The amazing thing is that it is specifically _economic_ freedom that is correlated with happiness even for equal wealth; so economic freedom contributes to happiness both directly and indirectly via wealth.

    I have quite a bit of experience about my own happiness in different nations, and if you ask me it is specifically the economic freedom in the housing market that brings happiness.

  19. 19 19 jrod

    Or maybe we just addicted to fatty food with all that money we have. Which apparently is addictive as hard drugs, so maybe they are just polling us prior to binging!

  20. 20 20 Harold

    I think Benett Hasleton has got it about right. It might be that happiness does rise with absolute income, but I bet it is increased more by greater equalty, as demonstrated by Scandanavian countries. ToddM has made a mistake of equating lifestyle with income level. It would not be possible to live an approximately Nigerian lifestyle in te USA, despite his suggestion that he could find a group of like-minded people. The society and social structures are different and cannot be just recreated on a bit of barren land. You are imagining your life without the benefits of a high income, but without the compensating factors.

    One can see how greater incomes do not necessarily lead to greater happiness. Increased labour mobility may drive income gains, but removes extended family support and reduces community. It may be a bit of a cliche, but can you really say the things that make you happy are mainly to do with money?

    The Buddhists have got a point here. Fulfilment of desire for material possesions brings only a temporary, minor happiness increase. Yet people do devote considerable effort to obtain material things. I postulate that much of this effort is wasted, as it does not bring a commensurate level of happiness.

  21. 21 21 Douglas Bennett

    Most comments so far involve equality and income (efficiency) as two distinct but desirable ‘goods.’ In this case, we could map out people’s preferences on a utility map (via indifference curves). Suppose that income is on the Y axis and equality is on the X axis.

    One approach would be to aggregate people’s preferences and see whether the resulting curve remains fairly steep (indicating people value equality more than income), remains fairly shallow (indicating people value income more than equality), or of a more conventional shape (indicating that equity is preferred when it is relatively scarce and income is preferred when income is relatively scarce). Based on this, society/government (representing the budget line) could be set at the optimal slope (relative price of equality vs equity) in order to maximize average utility.

    A better approach would be to acknowledge the fact that, as many readers have pointed out, there are multiple countries in the world, and each has a different societal/cultural/governmental mix. Thus, individual people can choose which society to be part of based on which one offers the budget line slope that maximizes their utility (the level of the budget line could change between countries here as well- a dictatorship may push the whole thing down).

    In the second approach, it would be better to be born in a high income country than a lower income, more equitable country, because you could simply use your excess income to move to the country you prefer. If you were born in the lower income but more equitable country, you may not be able to afford the move to the higher income country, and even if you could it would be even less equitable once you got there than if you had been born there in the first place. (This is roughly analogous to Tiebout equilibrium, only with equity vs efficiency instead of public vs private goods).

    Granted, by definition, in the less equitable country you would run the risk of being born without much extra income. However, in the long run, relatively poor people in rich, unequal countries grow wealthier than those from more equitable countries, so this effect is unlikely to persist for more than a few generations.

    Moral of the story: A higher income gives me more choices, including the option of moving to a lower income, more equitable country. As such, I think it would be terrible to rob someone else of that choice by turning a high income country into another low income, more equitable country.

  22. 22 22 Josh

    When I read this blog post, I immediately thought about another very interesting Landsburg article titled Wealthier Than Thou: Is it enough to be rich, or must others be poor?. As usual with Landsburg articles, it’s worth a read.

  23. 23 23 Mark

    I recommend the book Stumbling on Happiness by the Harvard psych professor Daniel Gilbert. He talks a lot about different methods of ranking happiness, including some that might mitigate the issues that Prof. Landsburg raises.

    Also, Gilbert points out that Siamese twins and paraplegics rank themselves as being about as happy as the general population, in spite of being able to constantly compare themselves others without their afflictions. This seems to be inconsistent with Landsburg’s explanation: these people are objectively worse off, they can readily compare their well-being to that of others, and they still report being just as happy.

  24. 24 24 Bennett Haselton

    Mark: I was thinking about the “paraplegic paradox”. The flip side of that is that (according to the Kolbert article that kicked off the discussion), lottery winners are also not happier than average.

    I suspect that when people are happy to be well-off compared to their peers, it comes from some feeling that they “earned” or “deserved” it. Lottery winners presumably do not believe, and their friends do not believe, that they did anything to deserve their good fortune. The flip side of that is that paraplegics’ friends usually don’t believe that *they* did anything to deserve their situation either. So both groups end up about as happy as the average person.

    Obese people often report being less happy than average, perhaps because even though their handicap is much less mild than, say, being in a wheelchair, people *do* tend to consider obese people to be responsible for their condition.

  25. 25 25 Benkyou Burito

    Self reported happiness is useless without a measurement of actual expectations.

    Happiness describes to what degree your expectations are being met. I’m happy because all of my needs and many of my wants are being met. If any of my needs went unfilled or more of my wants then I would be less happy.

    I suspect that the problem is that with rising wealth, people expect more. Which keeps happiness flat despite a real rise in the number of wants and needs being filled.

  26. 26 26 Snorri Godhi

    PS: the amount of public welfare spending (including health care) does not affect happiness; nor does it affect inequality of happiness within the population:

    Those of you who believe that economic equality is related to happiness should find another way to increase equality.
    (See also Bennett’s latest comment above.)

  27. 27 27 Harold

    Benkyou Burito “Happiness describes to what degree your expectations are being met. I’m happy because all of my needs and many of my wants are being met. If any of my needs went unfilled or more of my wants then I would be less happy.

    I suspect that the problem is that with rising wealth, people expect more. Which keeps happiness flat despite a real rise in the number of wants and needs being filled”

    We are back to Buddhism again. There are two possible paths to happiness in this scenario – try to fulfil all your desires, or reduce your desires. As the first is impossible, since as soon as one desire is fulfilled, another takes its place, the only path to happiness is to desire less.

  28. 28 28 EricK

    If unhappiness comes from not having our desires met, I wonder to what extent reported happiness correlates with the level of advertising people are exposed to.

  29. 29 29 A. Nonymous

    I don’t know if you noticed, but 1000 years ago people used to travel far. Now, with cars, buses, and planes, we are still traveling far. No reason to build spaceships, since they will only take us far.

  30. 30 30 David

    I find that I’m generally less happy after reading Kolbert’s columns.

  31. 31 31 CJ

    Isn’t it true to say that money doesn’t make you happier per se, it simply makes life easier in the grand scheme? Being American has cast this undeniable feeling of wanting more over needing more. This subject really depends upon how one defines their own idea of “happiness”. I myself relate to the comment about looking back on my own life and comparing it to now, as well as where I thought I would be. Then, I decide to be happy anyway. I’ve had wealth. I’ve had debt. Life is easier and more free when I’ve had wealth. But my level of happiness has stayed the same because of how I choose to perceive life.

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