He Said He W as Not Happy, Should We Care?
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He Said He Was Not Happy, Should We Care?
Donald Lien September 12, 2013
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What is this? Where does it come from? Why do we care? Is it here to stay?
Happiness
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Happiness Measurement Determinants of Happiness Policy Implications Related Work
Main Topics
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Momentary feelings of joy and pleasure, referred to in psychology as positive and negative affect (Happiness)
Overall contentment with life (Life Satisfaction)
Quality of life achieved by developing and fulfilling one’s potential (Eudaimonia or the good life)
Three Concepts
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Please imagine a ladder with steps numbered from zero at the bottom to ten at the top. Suppose we say that the top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible. If the top is 10 and the bottom step is 0, on which step of the ladder do you feel you personally stand at the present time?
Gallop World Poll
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All things considered, how satisfied are you with your life as a whole these days? Use 0 to 10, where 0 is dissatisfied and 10 is satisfied
Gallop World Poll
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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?
General Social Survey
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All things considered, how satisfied are you with your life as a whole these days? Please use this card to help with your answer. Dissatisfied (1) 2 3 4 …Satisfied (10)
World Values Survey
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On the whole, are you very satisfied, fairly satisfied, not very satisfied, or not at all satisfied with the life you lead?
Euro-Barometer Survey
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Overall, How happy are you? 0 indicates very unhappy 100 indicates very happy
Hong Kong and Beijing Surveys
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Experience Sampling Method Day Reconstruction Method U-Index Brain Imaging
Other Measurement Methods
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The extent the same questions yield identical answers when administered in the same conditions
Reliability
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The extent the measure can be explained in terms of life circumstances and other candidate variables
The extent it is correlated with other subjective and objective measures of well-being
How and whether it predicts subsequent outcomes and behavior
Validity
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Genes and environment (Level 1) External features (Level 2) Personal features (Level 2) Happiness (Level 3)
Basic Framework
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Income Work Community and governance Values and religion
External Factors
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Mental health Physical health Family experience Education Gender Age
Personal Features
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Easterlin Paradox (1974) At a point in time within any society, richer
people are on average happier than poorer people (cross-sectional fact)
Over time within many societies, the population does not on average become happier when the country’s income rises (time series fact)
Income
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US: 1950-1970, 1963-1976, 1972-2006 West Germany: 1973-2007, 1985-2006 Recent debate
Evidence
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Relative income Adaptation
Explanantion
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Kahneman and Krueger (2006)
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Clark et al (2008): Death of Wife
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Clark et al (2008): Death of Husband
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Lucas (2005): Divorce
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Di Tella at (2007): Firing
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Di Tella at (2007): Effect of a 50% spike in income
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When people become unemployed they experience sharp falls in well-being and their well-being remains at the lower level until they are re-employed
The main impact of unemployment on well-being is not through the loss of income, but rather through loss of social status, self-esteem, workplace social life, and other factors
Unemployment
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Others’ unemployment (at the regional, household, and couple level) generally has a positive effect on the well-being of the unemployed (at least for men)
Even low quality jobs are associate with higher life satisfaction
It is better to get people bad jobs than no jobs at all
Unemployment
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Overall self-employment has no effect on life satisfaction
A positive correlation is found in American data and European data
For the non-OECD data and Latin American countries, self-employment is associated with lower satisfaction
Free to choose vs. insufficient employment opportunities in the formal sector
Self Employment
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Women report higher satisfaction and happiness than men
But this finding is dominated by advanced countries
Outside the industrial countries the happiness gap is smaller or even reversed
Overtime, women become less happy relative to men in the US and Europe
Gender
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US women have lower U-index scores than men, and thus less misery
Women are relatively happier in countries where gender rights are more equal
Though women report higher life satisfaction than men, their rates of mental illness are also higher
Gender
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It is U-shaped through life Satisfaction declines, reaches a minimum in
middle-age (between 40 and 50), and then rises again
Explanations could include the wisdom of maturity, or the beneficial effect of reduced (or more realistic) aspiration
Between 70 and 80, worsening health begins to take its effect and average happiness begins to decline once more
Age
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Level of education has no clear direct impact on happiness
Indirect effects include higher income, increased employability, job security, and faster promotion
Education
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Having children is no guarantee of higher happiness
The pleasure of parenting depends on the age of the children, on the quality of the parenting couple, and on the social context, including having enough time to enjoy family life
A man who has children lives like a dog, a man without children dies like a dog
Children
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Inflation Income inequality Quality of work Retirement Social Capital Religion Altruism and materialism TV watching Environment Mental and physical health
Other Factors
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Relevance of economic policies Intrinsic vs. extrinsic incentives GNP vs. GNH (Gross National Happiness)
Policy Implications
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Procedural Utility How the outcome is derived also affects
utility This topic is not new though
Related Work
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Adaptation Perceived utility vs. Experienced utility Salience theory of utility Bardalo, Gennaioli, & Shleifer Salience theory of choice under risk (2011) Salience and consumer choice (2012) Salience and asset prices (2013)
Related work
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Importance of emotion in decision making Tuckett (2011): Minding the Markets: An
Emotional Finance View of Financial Stability Taffler and Tuckett (2012): Fund
Management: An Emotional Finance Perspective
Fairchlid (2012): From Behavioural to Emotional Finance: Insights into Financial Market Behaviour
Related Work
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Thank you very much!
It is a great pleasure to be here.