The Secret of Happiness

Most people agree that societies should foster the happiness of their citizens

• The U.S. founding fathers recognised the inalienable right to the pursuit of happiness.

• British philosophers talked of ‘the greatest good for the greatest number.

• China champions a harmonious society.

• Bhutan has adopted the goal of Gross National Happiness (GNH).

Happiness is in the eye of the beholder

• Far to subjective

• Too vague, to serve as a touchstone for the nations goals.

However

• A generation of studies has shown that happiness, although a subjective experience, can be objectively measured, assessed and related to individuals and society.

Asking people whether they are happy, or satisfied with their lives, offers

important information about society

• It can suggest the need for change

The world enjoys technologies of unimaginable sophistication

• Yet at least 1billion people without enough to eat each day.

environment

• Despite new heights of productivity through ongoing technological and organisational advance; yet is relentlessly destroying the natural environment in the process.

Countries achieve great progress in development

Yet succumb to new crisis:

• Obesity

• Smoking

• Diabetes

• depression

Aristotle & Buddha

• Taught humanity, time and again, that material gain alone will not fulfil our deepest needs.

• Promote the end of suffering, social justice and the attainment of happiness.

Anthropocene

With over 7 billion people we are now Changing the Earth’s physical systems.

• Climate change

• The carbon cycle

• The water cycle

• the nitrogen cycle

• Biodiversity

Risk undermining the Earth’s life support system.

Sustainable development

If we act wisely, we can protect the Earth while raising quality of life broadly around the world. With lifestyles and technologies that improve happiness while reducing damage to the environment.

What do we need to be happy?

The Secrets of Happiness

1. The paradox at the heart of civilisation. Individuals want more income, yet society has got richer but not happier.

Better homes

more clothes

longer holidays

better health

Happiness has not increased in US, Japan, Continental Europe or Britain.

How much do you need to earn to be happy?

• According to the Marist Institute for Public Opinion, the tipping point is $50,000.

In 2010 a study from Princeton University found that up to $75,000, each boost in income increased happiness but after that increases ceased to matter in overall life satisfaction.

41% of people in the top quartile of incomes are very happy compared

with only 26% of the bottom quartile

The problem is that the proportions in each group who are very happy have not changed at all although the real incomes have risen hugely.

Clinical Depression

• 29% of women aged 30 in 2000 reported suffering trouble with nerves or feeling low, depressed or sad.

• In 1982 only 16% felt this way.

Where average incomes per person is less than $15,000 per year, in other words, where many people are the breadline, extra money really

does make people happier

When average income is above that level, happiness seems to be independent of income

US Gallup poll 1946-86

• “What is the smallest amount of money that a family of four needs to get along in this community?”

• As actual incomes rose so did the income people felt was needed.

• When asked “Are you satisfied with your financial position?”

• The proportion who said they were ‘pretty well satisfied’ fell, despite enormous economic growth.

The clearest evidence that you adjust to your income comes from asking people

what income they would consider satisfactory.

• Typically the income that people say is satisfactory rises by almost 50p for every extra pound that they have actually acquired.

• People overestimate the extent to which the new house or car will, once they have got used to it, make them happier.

Joseph Rowntree Foundation

A couple with two children need £36,800. (according to the Guardian 9/7/12)

Soaring childcare costs and tax credit hit family, increasing by a third since 2008 and twice the rate of inflation.

“families have a monumental task trying to earn enough to get by. Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses.”

Policy implications

If much of the extra income (say 60p in the £) brings no overall increase in happiness , we should reduce the incentive to acquire it. It would therefore be efficient to have a Marginal tax rate of 60p in the £.

Tax rates are one of the most important institutions we have for preserving a sensible balance between work and leisure. 60% is the typical level of marginal tax in Europe if you allow direct and indirect taxes.

Government ‘planning to measure peoples happiness’

• The ONS is to devise questions for a household survey

• David Cameron when in opposition stated “It’s time we admitted that there is more to life than money, and it’s time we focused not just on GDP but on GWB (general wellbeing)”

Lord Richard Layard (Gov’t Happiness Czar)

The study of Happiness is just beginning with 4 principles:

1. Don’t apologise for taxes

2. Foster security

3. Fight glaring evils such as depression

4. Discourage social comparison

The Economics of Happiness

http://www.theeconomicsofhappiness.org/

Measuring national well being

• http://www.ons.gov.uk/ons/guide-method/user-guidance/well-being/index.html