The Happiness of Nations

[Hakluyt]

The Happiness of Nations

"As economies get richer, they can afford to question the need for further riches. In a country where people are starving, economic growth remains regarded as a vital objective to overcome hunger and other poverty problems."

Traditionally, economists and others measure a nation's progress and prosperity by looking at Gross Domestic Product (GDP), that is, the total output of good and services a country produces for its own inhabitants or for sale to other nations. There is a growing tendency, however, for economists to consider another measure, Gross National Happiness.

"For the wealthy countries of the world, though not the developing countries, our instinct is that it would be a mistake in the twenty-first century to focus excessively on ways to raise the level or growth rate of GDP," write David Blanchflower and Andrew Oswald in Happiness and the Human Development Index: The Paradox of Australia (NBER Working Paper No.11416). "The industrialized countries should … use a broader conception of well-being than the height of a pile of dollars." As economies get richer, they can afford to question the need for further riches. In a country where people are starving, economic growth remains regarded as a vital objective to overcome hunger and other poverty problems.

One of the best-known attempts to move away from a simple reliance on GDP as a measure of welfare is the Human Development Index (HDI) of the United Nations. Published every year, the HDI is a score that amalgamates three indicators: lifespan, educational attainment, and adjusted real income.

In this paper, Blanchflower and Oswald question the soundness of this measure when the 2004 Human Development Report places Australia at third in the world, ahead of all the other English-speaking countries. The top-ten countries, in order according to that index, are: Norway, Sweden, Australia, Canada, Netherlands, Belgium, Iceland, United States, Japan, and Ireland.

The HDI, the authors note, is a mechanical criterion. "It does not capture the contentment or psychological state of individuals," that is, their mental well being. "Emotion surely ought to play a role in a measure of human well being," they write. Their goal is not to establish that the HDI measure of human well being is incorrect. Rather, their stated goal is to improve upon the traditional narrow economic focus on real income and growth. In that regard, they draw on recent academic literature exploring the "economics of happiness," studies that make use of how people in different countries rate their own happiness or well being. The authors suspect that HDI data and subjective well-being data could play complementary roles.

Using new data on approximately 50,000 randomly sampled individuals from 35 nations in 2002, Blanchflower and Oswald show that Australians have some of the lowest levels of job satisfaction in the world. Only Japan, Taiwan, and six East European nations (including Russia) do worse in this regard. Moreover, in a sub-sample of English-speaking nations where the common language should help such subjective measures to be more reliable, Australia performs poorly on a range of four other happiness indicators. The authors note that comparisons of people's answers regarding happiness in one country to answers to the same questions in another country is "probably hazardous" because of different languages and cultures that may cause biases in such happiness surveys.

In the "world league table" on happiness, Australia performs respectably in these four categories outside of job satisfaction. Ranking the 35 nations by all five categories, Australians place their happiness level at 5.39 on a scale that runs from a low of one to a high of seven, making it the twelfth happiest country in this sample. By comparison, Austria has a value of 5.54, Brazil 5.42, Switzerland 5.51, and the United States 5.52.

Happiness measures, Blanchflower and Oswald add, "can tell politicians and others how citizens value the different effects upon well-being of diverse influences such as unemployment, the divorce rate, real income, friendship, traffic jams, crime, health, and much else. If we can learn to exploit the power of statistical happiness equations, it should be possible to make public policy choices in a more coherent way than before."

Some recent findings from statistical happiness research include the following, the authors note in their paper:

1. For a person, money does buy a reasonable amount of happiness. But it is useful to keep this in perspective. Very loosely, for the typical individual, a doubling of salary makes a lot less difference than life events like marriage.

2. Nations as a whole, at least in the West, do not seem to get happier as they get richer.

3. Happiness is U-shaped in age - that is, it falls off for a while, then stabilizes, and rises later in life. Women report higher well-being than men. Two of the biggest negatives in life are unemployment and divorce. More educated people report higher levels of happiness, even after taking account of income.

4. At least in industrial countries such as France, Britain, and Australia, the structure of a happiness equation looks the same.

5. There is adaptation. Good and bad life events wear off - at least partially - as people get used to them.

6. Comparisons matter a great deal. Reported well being depends on a person's wage relative to an average or "comparison" wage. Wage inequality depresses reported happiness in a region or nation. But the effect is not large

-- David R. Francis

http://www.nber.org/digest/jan06/w11416.html

[Anarch]

I am happy. I work, I breathe, eat, sleep, have sex, go to uni (well, I will, when it starts in March), I drink beer, I hang out with friends, I play pool, I listen to music, and life is good.

Are you happy?

[Jonathan]

It annoys me to hear economists like David McWilliams say that Ireland is great because we have such a booming economy and immigrants want to live here(as if that was the litmus test for happiness) - especially when Ireland has never had such high suicide rates before, but still, here's an interesting article.


Galway’s the clear grinner
A new survey reveals for the first time just where Ireland’s happiest and least contented people live. Mark Keenan examines the reasons behind those smiling — or grim — faces

Happiness may or may not have anything to do with a cigar called Hamlet, but the findings of a nationwide study soon to be released shows that moving to a hamlet of the small village variety may be just the tonic to restore the joys of life.
Ireland’s most comprehensive study into people’s quality of life and happiness has just been concluded by a team from University College Dublin.
The results have been derived from extensive interviews with 1,500 citizens from all walks of life. Published exclusively today by The Sunday Times, they show where Ireland’s happiest and least contented people live.
We Irish appear to be an extremely happy bunch. In a report published last week by the European Foundation for the Improvement of Living and Working Conditions, we were the second-happiest nation out of the 25 states and three candidate countries surveyed.
And last year the Economist’s research unit named Ireland the happiest nation in the world (of 111 nations), with a seemingly perfect combination of new wealth and old family and religious values.
The latest study from UCD’S planning and environmental policy unit details where that happiness comes from. Not surprisingly, high on the list is where we live — our address and its immediate environs.
From the research conducted by Professor Peter Clinch, Finbarr Brereton and Dr Susana Ferreira,
The Sunday Times has broken down the results to divide them county by county to see exactly where Ireland’s happiest people live.
Those questioned were asked to rate their overall contentment on a scale of one to seven, where one was described as “life is as bad as can be” and seven was “as good as it can be”.
It confirms what the European study shows, that as a nation we’re a generally contented bunch. Almost all the answers fell in the top end of the scale, between four and seven. However, there were some interesting variations.
Galwegians are far and away the happiest people in Ireland, and given the previous Economist worldwide survey, arguably the happiest in the world. The highest happiness score — almost full marks with 6.93 — came from Co Galway. And Galway city wasn’t far behind with 6.65, the second-highest score in the republic.
Wicklow dwellers were next, with a very smiley 6.32, and are followed by Tipperary — Ireland’s next most contented county with a sunny score of 6.12. Surprisingly, Limerick city comes next with 5.96, demonstrating that Shannonsiders are a resilient and cheery bunch despite the reputation their city has gained nationally for crime and social problems.
Overall, however, the biggest revelation is what impact rapid growth, urbanisation and congestion can have on morale.
With an overall score of just 4.97 and the only county to duck below the 5 mark, Dublin is completely blue.
Clinch said: “They’re not unhappy. A score of 4.97 is “reasonably content” rather than “happy”, but it underlines that the notion that Dublin has benefited most from the Celtic Tiger is missing the point. The overall objective of economic growth should be to improve quality of life and although incomes in Dublin have grown rapidly, they have not compensated Dubliners for factors like increased traffic congestion, living closer together in more confined spaces, increased costs of living and lack of amenities. These factors lead to lower levels of happiness in Dublin.”
Within Dublin, figures are broken down by local-authority jurisdictions. The unhappiest residents — and also the unhappiest nationwide — are in the South Dublin council area, taking in large tracts of West Dublin and lower income areas such as Tallaght and Clondalkin. The happiness level there of 4.59 is Ireland’s lowest by far.
Northsiders proved happiest in Dublin, with a lukewarm rating of 5.57 for Fingal, closely followed by the city’s most affluent quarter, Dun Laoghaire-Rathdown, at 5.21. City-centre dwellers registered a stoic 4.72.
Outside Dublin, the scenic but isolated, boggy and under populated county of Leitrim was least happy with a rating of 5. However, as the study group from Leitrim was unusually small, this might be an unfair result.
Donegal, beautiful but exposed, large and isolated, turned in a rating of 5.17, easing into the bottom five. Perhaps similar factors influenced Cavan’s low rating at 5.2.
With its growing city experiencing some of Dublin’s problems, Waterford turned in a rating of 5.07, making it Ireland’s third least contented county.
While the survey team did not examine reasons for unhappiness county by county, it would not be difficult to speculate on why Galway is Ireland’s breeziest.
Professor Clinch said: “Most of Co Galway is relatively prosperous economically with a good mix of different employment types. The bulk of Galwegians live in areas within or not far from population centres which are large enough to hold varied facilities and a selection of employment, but not too large to cramp lifestyles significantly or allow access to space and fresh air.”
The scenery in Galway is among the best Ireland has to offer and the presence of sea, lakes and mountains must have a role to play. With its two near-perfect happiness ratings, it seems that Galway comes closest to offering the best of all worlds.
“The survey results suggest that, everything else being equal, the ideal location for an Irish person to live is a small town — somewhere relatively rural, not too isolated, with facilities, services, scenery and worthwhile employment,” said Professor Clinch.
But other points of the survey also helped to determine which factors contribute most and least to happiness.
“What we have discovered is that income, while a factor in determining happiness, is not a major factor.
Up to a certain level additional income could improve happiness but it does not make a difference beyond a certain point.”
But the survey does show that the affluence of the neighbourhood we live in also has a bearing on our contentment.
“Keeping up with the Joneses or even surpassing them is important. Everything else being equal, up to a certain point, the higher your income relative to that of your neighbours, the happier you will be. It is obvious that how well off we feel depends on how our neighbours are doing,” said Clinch.
The type of accommodation you live in and your ownership status will also influence your level of contentment.
Not surprisingly, those with mortgages or paying rent were far less happy than those who owned their homes outright. Generally, the larger and better the home you live in, the happier you will be.
Weather variations are also a factor. A lower mean daily minimum air temperature in January and a maximum in July are both negative influences on happiness.
Kilkenny, a county that appears to have almost all of Galway’s advantages, only features tenth in the survey — and Kilkenny has both the coldest and warmest temperatures in Ireland.
One surprise is that almost all the wettest counties came near the top of the happiness table. “This may be explained by the fact that Ireland’s wettest counties are generally the most scenic,” said Clinch.
But what are the actual benefits of knowing exactly how happy or unhappy people are? Why spend years of research, the resulting costs and exhaustive interviews with 1,500 people to let the rest of us know which Irish citizens are most smug with their lot? “If the purpose of economic growth is to improve contentment, we need to know what matters most to people so we can set priorities for economic, social, environmental and planning policies. Traditional measurements such as GDP do not tell us whether government policies are actually improving people’s wellbeing,” says Clinch.
“The fact that the increased incomes of Dubliners do not compensate for the adverse effects of economic growth and development on their city shows it’s no good being paid more if you spend more time getting to work, sitting in traffic and pay more for a smaller home in a cramped area with poor amenities.”
The UCD report will surely highlight flaws in government policy to redistribute the benefits which are seen to be unfairly accruing in the greater Dublin area.
Indeed Clinch’s research shows that, if it weren’t for those poorer quality living conditions, Dubliners would be as happy as those living in the regions and therefore government policy should focus on improving urban living conditions. Proof also that Dubliners are not moaners by nature and that happy Galwegians may feel differently if they lived in the greater Dublin area.
For now, Clinch believes that lower levels of happiness among the city’s population may already be reflected in an increasing drift by Dubliners to country areas in search of contentment.
“The fact that a significant number of people are already leaving the cities for the country in droves underlines what they already know — that on the whole a rural life, with a good job, lower house prices and good amenities is a far happier lot than a well paid existence in a fraught city environment.