Happiness Economics

Happiness Economics

On Richard Layard’sfootsteps

Richard Layard, utilitarist

Earlier rogue, later mainstream economist

Wealth/income

Family life(Primary re-

Lations)

Health

Harmony in a broader

sense

Happiness

Freedom

Socialenvironment

Ofindividuum

andsociety

ValuesWork

Research DesignMultilevel Modeling

European Social Survey 2008Mlwin

N=41027

Weighted by the different sizes of the nations polled (pweight) on Level 2 and by design

related effects (dweight) on Level 1

Abstract

• If you have enough money and you do not have to fear inflation: This is a good starting point, if you want to be happy. If you trust people and police, meet people often just for meeting them, and do not fear crime violence, even better. If you are additionally able to discuss intimate matters with somebody, your health is not too bad, and you believe in God, it is quite likely, that you are quite happy.

• If you are satisfied with the economy in your country, you are married or in a civil partnership and do have a job, good for you: You are probabably quite satisfied with your life. If you are not permanently sick or disabled either, have something like freedom in the way you organise your work, even more so. If you are additionally not a money driven person, have a sense for pleasure and seek for it and if it is important for you to help others, you will probably enjoy a satisfying life.

Test design of both the happiness and the life satisfaction model

M1 M2 M3 M4 M5 M6

If p = or < 0,05 the next model significantly improved fit

M0

M3 M4 M5

M4

M0

M1M0 ist nested under M1 and therfore M0 can be tested against M1

HAPPINESS

Testing the happiness model

HAPPINESSMODEL

Model 0 Null Model(just constant)

Model 1All economical factors

Model 2All non-economical factors

Model 3All factors without ones extra

Model 4All and the ones extra

Model 5All significant v. of model 4

Model 6 All significant v. of model 5

Model 0 Null Model(just costant)

0.00000 0.00000 0.00000 0.00000 0.00000 0.00000


0.00000 0.00000


0.00000 0.00000


1.4531e-081


Model 5All significant v. of Model 4

0.00000 0.00000

Model 6 Strongly significant v. of M. 5

0.00000 0.00000

Succession of models being tested

Models to be tested against

If p = or < 0,05 next model significantly improved fit

Happiness model 0Different means in different countries

Happiness model 4Different constants in different countries

Happiness model 6The influence of the “ability to discuss private and intimate matters” once set

free to vary on level 2

Happiness model 6Different constants and different predictors for different countries

LIFE SATISFACTION

Testing the life satisfaction model

HAPPINESSMODEL

Model 0 Null Model(just constant)





Model 5All significant v. of model 4

Model 6 All significant v. of model 5

Model 0 Null Model(just costant)

0.00000 0.00000 0.00000 0.00000 0.00000 0.00000


0.00000 0.00000


0.00000 0.00000


1.2477e-090


Model 5All significant v. of Model 4

0.00000 0.00000

Model 6 Strongly significant v. of M. 5

0.00000 0.00000 2.5771e-008

Succession of models being tested

Models to be tested against

If p = or < 0,05 next model significantly improved fit

Life satisfaction model 0Different means in different countries

Life satisfaction model 4Different constants in different countries

Life satisfaction model 6The influence of “unemployed and job

seeking” once set free to vary on level 2

Life satisfaction model 6The influence of “important to seek fun”,

once set free to vary on level 2

Life satisfaction model 6The influence of “satisfaction economy”

once set free to vary on level 2

Life satisfaction model 6 Different constants and different predictors for different countries

Conclusions on happiness• My mood matter most: If you are in bad or very bad health you

lose 1.2 points on the 10-point scale and if you meet people socially only rarely, you lose again 0.6 points. However, if you are able to discuss intimate matters you at least regain 0.7 points.

• Personal matters somehow related to the economy matter less, but they still do: If you do not have problems to keep up your household, you win 0.7 points.

• If all variables are included in the equation, even those of which Layard says that they are irrelevant, the overall fit of the model increases.

• Model 4 was able to shrink the differences thoroughly between the countries compared to model 0 (e.g. Bulgaria: from –2 to –0.3 deviance from the overall mean of all constants).

• There is no country in which the sheer ability to discuss private and intimate matters increases happiness more than Israel.

Conclusions on satisfaction of life• My mood matters much: If you are permanently sick or disabled,

1.3 points have gone. If you are unemployed but not job seeking, yet another minus of 0.6 will drag you down. This will increase to 0.9 if you are unemployed and looking for a job.

• But personal matters related to the economy matter more for your life satisfaction than for your happiness: If you are more or less satisfied with the economy (7 out of 10 points) you are able to weigh out permanent sickness and being unemployed/job looking.

• Model 6, once allowed to vary on level 2, is badly suited compared to model 4 to predict the satisfaction of life in Belgium (??), Portugal (Saudade?) and Bulgaria (unmodeled cultural singularity?), otherwise their constants would be closer to the overal mean.

• By far, Belgium is much more sensitive towards the satisfaction with their economy than every other nation polled.

General conclusions

„Pain (...) is, in almost all cases, a more pungent sensation than the opposite and correspondent pleasure.“Adam Smith

„Glück ist ein Zustand, in dem man nichts spürt, sagt der Weise.“Kurt Tucholsky

„Ein Glück ist erreicht, nun soll es dauern; aber Dauer und Glück schließen sich aus.“ Robert Musil

„The satisfaction of the Danes, however, began well before 1992, albeit at a more moderate level. The key factor that explains this (...) seems to be that Danes have consistently low (and indubitably realistic)

expectations for the year to come. Year after year they are pleasantly surprised to find that not everything is getting more rotten in the state of Denmark. “British Medical Journalhttp://www.bmj.com/cgi/reprint/333/7582/1289

Further steps in the research process

• Amalgamating wave 4 with waves 1,2 and 3

• Testing for assumptions of the simple Multilevel Model (linearity, heteroscedasticity etc.)

• Creating a Structural Equations Multilevel Model instead of a pure Multilevel one

• Testing for assumptions of the more sophisticated model (linearity, heteroscedasticity etc.)

• Conducting tests to reach an even higher level of parsimony

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Happiness Economics

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