emotional prosperity invited bjir annual lecture at lse, 2009 andrew oswald i would like to...
TRANSCRIPT
Emotional Prosperity Invited BJIR Annual Lecture at LSE, 2009
Andrew Oswald
I would like to acknowledge that much of this work is joint with coauthors Andrew Clark, Nick Powdthavee, David G. Blanchflower, Rainer Winkelmann, and Steve Wu. I thank Andrew Steptoe, Francis Green, Justin Wolfers and Helen Urry for valuable discussions and for their kind permission to use certain later graphics. My research is supported by an ESRC professorship.
Social science is changing
Social science is changing
Researchers are studying mental well-being.
Social science is changing
Researchers are studying mental well-being.
We are drawing closer to psychology and medicine.
Using random samples from many nations:
Researchers try to understand what influences the psychological wellbeing of
(i) individuals
(ii) nations.
Is modern society going in a sensible direction?
The types of statistical sources
General Social Survey of the USABritish Household Panel Study (BHPS)German Socioeconomic PanelAustralian HILDA PanelEurobarometer SurveysLabour Force Survey from the UKWorld Values SurveysNCDS 1958 cohortBRFSS
Regression equations
Mental well-being = f(Age, gender, education level, income, marital status, friendship networks, region, year…)
Could we perhaps learn …
Preferably without relying on implausibly good fortune:
England 8 Brazil 0
Stiglitz-Sen-Fitoussi Report• Bina AGARWAL University of Delhi• Anthony B. ATKINSON Warden of Nuffield College• François BOURGUIGNON School of Economics,• Jean-Philippe COTIS Insee,• Angus S. DEATON Princeton University• Kemal DERVIS UNPD• Marc FLEURBAEY Université Paris 5• Nancy FOLBRE University of Massachussets• Jean GADREY Université Lille• Enrico GIOVANNINI OECD• Roger GUESNERIE Collège de France• James J. HECKMAN Chicago University• Geoffrey HEAL Columbia University• Claude HENRY Sciences-Po/Columbia University• Daniel KAHNEMAN Princeton University• Alan B. KRUEGER Princeton University• Andrew J. OSWALD University of Warwick• Robert D. PUTNAM Harvard University• Nick STERN London School of Economics• Cass SUNSTEIN University of Chicago• Philippe WEIL Sciences Po
Stiglitz Report 2009 www.stiglitz-sen-fitoussi.fr
The Stiglitz Commission Report
• advocates a shift of emphasis from a “production-oriented” measurement system … toward broader measures of social progress.
Some cheery news:
Some cheery news:
In Western nations, most people seem happy with their lives
Some cheery news:
In Western nations, most people seem happy with their lives
The distribution of life-satisfaction levels among British people
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Self-rated Life Satisfaction
Source: BHPS, 1997-2003. N = 74,481
From the U.S. General Social Survey (sample size 40,000 Americans approx.)
• “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?”
Typical GHQ mental-strain questions
Typical GHQ mental-strain questions
Have you recently:
Lost much sleep over worry?Felt constantly under strain?Felt you could not overcome your difficulties?Been feeling unhappy and depressed?Been losing confidence in yourself?Been thinking of yourself as a worthless person?Been able to enjoy your normal day-to-day activities?
The Warwick-Edinburgh Mental Well-being Scale (WEMWBS)
• I’ve been feeling optimistic about the future • I’ve been feeling interested in other people • I’ve had energy to spare • I’ve been thinking clearly• I’ve been feeling good about myself• I’ve been feeling confident• I’ve been able to make up my own mind• I’ve been feeling loved• I’ve been feeling cheerful
Happiness and mental well-being are of interest in themselves.
But, more broadly, there seem to be deep links between mind and body.
Author(s): Ebrecht M, Hextall J, Kirtley LG, Taylor A, Dyson M, Weinman J
PSYCHONEUROENDOCRINOLOGY
Volume: 29 Issue: 6 Pages: 798-809 Published: JUL 2004
“Every subject received a standard 4mm-punch biopsy, and the healing progress was monitored via high-resolution ultrasound scanning.”
“Every subject received a standard 4mm-punch biopsy, and the healing progress was monitored via high-resolution ultrasound scanning.”
Ebrecht et al 2004
• The overall results showed a significant negative correlation between speed of wound healing and GHQ scores (r = -.59; p < .01)
In other words, happier human beings heal more quickly.
A more recent paper
A more recent paper
“Enhanced wound healing after emotional disclosure intervention”
Weinman, Ebrecht et al
BRITISH JOURNAL OF HEALTH PSYCHOLOGY Volume: 13 Pages: 95-102 Part: Part 1 Published: FEB 2008
• Participants who wrote about traumatic events had significantly smaller wounds 14 and 21 days after the biopsy compared with those who wrote about time management.
We need to understand these interconnections better.
How has the modern work on the economics of happiness proceeded?
The London School of Economics itself has played a prominent historical role in these issues.
Prof. Lionel Robbins
Prof. Lionel Robbins
He was influential in dissuading economists from studying mental well-being. He worked at LSE for 30 years.
"Interpersonal Comparisons of Utility: A Comment", 1938, Economic Journal.
Eventually the intellectual tide turned.
[One reason was a meeting near here]
1993: Lionel Robbins Building
1993: Lionel Robbins Building
The first economics-of-happiness conference was held. A central person was Andrew Clark, then a PhD student at LSE.
Our 1993 economics-of-happiness conference, 50 metres from here, was of course a great success?
Our 1993 economics-of-happiness conference, 50 metres from here, was of course a great success?
Well, no.
• The conference at 10.30am before it filled up.
• The conference at 10.30am before it filled up.
• The conference at 11.30am after it filled up.
10 people came.
Unfortunately, that included the international speakers whom we had asked to give keynote addresses.
Where the lecture is going next:
Various questions
Question #1
Question #1
In the coming century, should our society’s goal be ‘happiness’ rather than GDP?
Question #2
Question #2
In a well-off country, how might human progress -- emotional prosperity not just financial prosperity -- be assessed?
Question #3
Question #3
Could physiological measures -- biomarkers -- be used as proxies for well-being?
Question #3
Could physiological measures -- biomarkers -- be used as proxies for well-being?
Question #4
Question #4
What recommendations were made by the (Stiglitz) Commission on Human Progress set up by Nicholas Sarkozy?
Let’s return for a moment to the microeconomics of human well-being
What have we learned?
Big effects
Unemployment
Divorce
Marriage
Bereavement
Friendship networks
Health
[No effects from children]
There is also an intriguing life-cycle pattern
The pattern of a typical person’s happiness through life
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15-20 21-30 31-40 41-50 51-60 61-70Age group
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This holds in various settings
This holds in various settings
For example, we see the same age pattern in mental health among a recent sample of 800,000 UK citizens:
[Blanchflower and Oswald, Social Science & Medicine, 2008]
The probability of depression by ageMales, LFS data set 2004-2006
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1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990
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Depression by age among females: LFS data 2004-2006Q2
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Obviously life is a mixture of ups and downs
Much of the newest research follows people through time.
eg. Andrew Clark’s work
The unhappiness from bereavement
Human beings also bounce back from, say, disability.
Work with N. Powdthavee, Journal of Public Economics, 2008
Life-Satisfaction Path of Those Who Entered Disability at Time T and Remained Disabled in T+1 and T+2
BHPS data 1996-2005
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However, there is a downside to that adaptability (eg. marriage)
However, there is a downside to that adaptability (eg. marriage)
And should you invest in a baby?
Happiness and children
But people do not seem to adapt to joblessness
An important question in a modern society is the impact of divorce.
Divorce (eventually) makes people happier
Divorce (eventually) makes people happier
What about money and happiness?
A key social-science fact
A key social-science fact
The data show that richer people are happier and healthier.
The same phenomenon holds true at the cross-sectional level for nations.
TZA
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MDA
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Australia
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2000 5000 10000 20000 35000 60000GDP per capita in US$ at PPP (log scale)
Life Satisfaction = -0.9 + 0.8 * Log GDP (t=8.3)World Values Survey
Life Satisfaction and GDP Per Capita
The road to nowhere?
• Growth in income is now not correlated with growth in happiness
• This is the “Easterlin paradox”
The Man Behind the Easterlin Paradox
Average Happiness and Real GDP per Capita for Repeated Cross-sections of Americans.
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Life-satisfaction country averages
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1974 1982 1990 1998 2006
ItalyIrelandGermanyNetherlands
Average GHQ Psychological Distress Levels Over Time in Britain: BHPS, 1991-2004
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Might this have something to do with work getting more stressful? [Yes]
Work by Francis Green, Keith Whitfield, et al.
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Green (2008) Work Effort and Worker Well-Being in the Age of Affluence
Source: Skills Survey series
What of well-being among the young?
Helen Sweeting et al
“GHQ increases among Scottish 15 year olds 1987–2006” Social Psychiatry & Psychiatric Epidemiology (2008).
Her team assesses whether life is getting more stressful for young people.
Mental strain in young Scots in 1987
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Mental strain in young Scots in 1999
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Mental strain in young Scots by 2006
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Equivalent results have been found for adults in the Netherlands, UK and Belgium.
Worsening GHQ levels through time
• Verhaak, P.F.M., Hoeymans, N. and Westert, G.P. (2005). “Mental health in the Dutch population and in general practice: 1987-2001”, British Journal of General Practice.
• Wauterickx, N. and P. Bracke (2005), “Unipolar depression in the Belgian population - Trends and sex differences in an eight-wave sample”, Social Psychiatry and Psychiatric Epidemiology.
• Sacker, A. and Wiggins, R.D. (2002). “Age-period-cohort effects on inequalities in psychological distress”. Psychological Medicine.
So there is much evidence that all this extra money we have today is not doing a lot for us.
Easterlin’s Paradox.
There has recently been a critique of Easterlin’s idea
There has recently been a critique of Easterlin’s idea
Betsey Stevenson and Justin Wolfers have argued that economic growth does buy happiness.
Brookings Papers, Spring 2008
Their work is extremely valuable
Their work is extremely valuable
But ultimately I think they probably have (approximately) the wrong answer.
• Much of their paper is concerned with cross-section patterns.
• In the long time-differences, which is the appropriate test, little is statistically significant in 1973-2007 European data.
• Another key difficulty is that we know unemployment movements – omitted from most regression equations -- affect mental well-being.
Di Tella et al AER 2001
Moreover, Stevenson and Wolfers agree that Americans have if anything become less happy over the last 30 years.
Overall
I would say that currently the balance of the evidence favours Easterlin rather than Stephenson-Wolfers.
[though it is bad science for us ever to close our minds, so we must watch for new evidence as it accumulates]
But many general economists have low life-satisfaction when they hear about this research.
They say:
Should we actually pay attention to happiness data?
The tradition of economics has been to ignore what people say about the quality of their own lives.
The tradition of economics has been to ignore what people say about the quality of their own lives.
Many are opposed to the idea of measuring ‘happiness’.
I always liked the retort:
I always liked the retort:
If molecules could talk, would physicists refuse to listen?
A. Blinder
I always liked the retort:
If molecules could talk, would physicists refuse to listen?
A. Blinder
So how could we move forward?
So how could we move forward?
• Brain-science correlates as a validation
So how could we move forward?
• Brain-science correlates as a validation
• Physiological correlates as a validation
RD Lane et al American Journal of Psychiatry July 1997.
“Neuroanatomical correlates of happiness, sadness, and disgust”
Brain Responses in Two Pictures(MRI Scans)
Source: Richard Davidson, University of Wisconsin
Another study
H. Davis et al Brain Imaging and Behavior, June 2008.
Another study
H. Davis et al Brain Imaging and Behavior, June 2008.
“fMRI BOLD signal changes in elite swimmers while viewing videos of personal failure”
An alternative approach is EEG:
A brain-science approach (Urry et al Psych. Sci. 2004)
But, for a sceptic, there is a major difficulty.
The Problem:
Biological data only validate well-being scores in so far as they are unambiguously measures of utility or ‘happiness’.
The next few slides are fractionally more technical.
Could we exploit neo-classical economic theory to assess the validity of well-being data?
Think not about people but about places.
Joint work with Steve Wu
• New data from the Behavioral Risk Factor Surveillance System (BRFSS)
• 1.3 million randomly sampled Americans
• 2005 to 2008
• A life-satisfaction equation
Then we go to the compensating-differentials literature dating back to Adam Smith, Sherwin Rosen, Jennifer Roback, etc.
The most recent is Gabriel et al 2003.
Gabriel painstakingly takes data on
• Precipitation• Humidity• Heating Degree Days• Cooling Degree Days• Wind Speed• Sunshine• Coast• Inland Water• Federal Land• Visitors to National Parks• Visitors to State Parks• Number of hazardous waste sites
and
• Environmental Regulation Leniency• Commuting Time• Violent Crime Rate• Air Quality-Ozone• Air Quality-Carbon Monoxide• Student-teacher ratio• State and local taxes on property, income and sales
and other• State and local expenditures on higher education,
public welfare, highways, and corrections• Cost-of-living
Then there are 2 ways to measure human well-being or ‘utility’ across space.
Subjective and objective
Gabriel’s work assigns a 1 to the state with the highest imputed quality-of-life, and 50 to the state with the lowest.
So we need to uncover a negative association – in order to find a match.
One Million Americans’ Life Satisfaction and Objective Quality-of-Life in 50 States
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Objective Quality of Life Ranking (where 1 is high and 50 is low)
To conclude across US states:
There is a close match between life-satisfaction scores and the quality of life calculated using (only) non-subjective data.
Next, consider the Stiglitz Commission’s Findings
Stiglitz Report 2009: “Measures of .. objective and subjective well-
being provide key information about people’s quality of life. Statistical offices [worldwide] should incorporate questions to capture people’s life evaluations, hedonic experiences … in their own survey.” P.16. Executive Summary of Commission Report.
“Emphasis on growth is misguided”
“Beyond GDP”
“Measuring what matters”
Happiness is the new GDP
Smile, and the economy smiles with you. Factory workers in Macedonia.
The Report’s Arguments
The Report’s Arguments
• Life is now more complexThe time has come to adapt our system of measurement … to better reflect the structural changes which have characterized the evolution of modern economies.
• Services dominateIn effect, the growing share of services and the production of increasingly complex products make the measurement of output and economic performance more difficult than in the past.
In this country
In this country
In 1900, there were 1 million coal miners (5% of the workforce).
In this country
In 1900, there were 1 million coal miners (5% of the workforce).
Today there are approximately 1,000.
• We need to measure well-being per seA… unifying theme of the report, is that the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.
• Inequality itself mattersRecommendation 7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a comprehensive way.
• Official statistics should blend objective and subjective well-being dataRecommendation 10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.
• Sustainability must be a criterion
Recommendation 11: Sustainability assessment requires a well-identified dashboard of indicators…the components of this dashboard should be … interpretable as variations of some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard
Where might research head in the future?
Biomarkers and their possible uses
An interesting border is between happiness and medicine
An interesting border is between happiness and medicine
• Is it possible that we can find physiological correlates with human well-being?
• Perhaps to broaden the standard policy goal of GDP?
Some of our latest work:
Joint with Nicholas Christakis (Harvard) and David Blanchflower (Dartmouth)
Statistical links between the heart and income and happiness.
To clinicians
High blood pressure is potentially a sign of mental strain and low well-being
But how about high blood pressure as a national measure of well-being?
Across nations, hypertension and happiness are inversely correlated
(Blanchflower and Oswald, 2008 Journal of Health Economics)
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Figure 2.The Inverse Correlation Between Hypertension and Life
Satisfaction: 16 European Nations Aggregated into Quartiles
Countries in the Countries in the lowest quartile highest quartile of blood-pressure of blood-pressure
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SpainFranceLuxUK Austria
ItalyBelgiumGreece
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Important work by Andrew Steptoe of UCL:
Whitehall II data
Salivary cortisol (Steptoe data)
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Happiness quintiles
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P = .009
Heart rate
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Happiness quintiles
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Adjusted for age, occupational grade, concurrent physical activity, smoking, bmi, and GHQ score
P = .017 in men
Steptoe et al, 2005PNAS
It is known that heart rate rises under stress.
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
Stress comes in different forms
• Nicolas Troubat et al (2009) European Journal of Applied Physiology
20 chess players – international and national-level players. They all played against a computer.
The computer standard was deliberately set one level higher.
The computer standard was deliberately set one level higher.
So all the players lost against the computer.
What happened?
• Average heart-rate rose 11 beats a minute
• On average, players used up 140 calories playing the game
• Overall, the physiological changes were “similar…those … in moderate physical exercise”.
In our own work, we study physiological data -- measuring heart rate, blood pressure, fibrinogen, and C-reactive protein -- on a random sample of 100,000 English citizens.
Pulse: Average heart rate is about 72 beats per minute.
Heart-Rate Equations
Pulse and Money
We find that for every extra £40,000 pounds a year, heart rate is 1 beat a minute slower.
Interesting patterns emerge
• First, there are well-determined income gradients in (and only in) heart-rate and C-reactive protein equations.
• Second, heart rate seems to have potential as a proxy measure for mental strain, so might eventually be usable as a measure of negative ‘utility’ in an economist’s framework.
• Third, education has little effect within biomarker equations.
• Fourth, it is more important to control for diet than has been traditionally recognized in the health-economics literature.
• Fifth, biomarker variables work powerfully in well-being equations.
Thus:
There are deep connections between happiness, money and health.
Some ideas to end:
Conclusions
#1 In the next century, new measures of human well-being may be required.
Conclusions
#2 As social scientists, we probably need to understand better the connections between mental and physical health.
Conclusions
#3 Heart-rate and blood pressure data have particular potential in policy design.
Conclusions
#4 Social scientists will, I believe, collaborate more with doctors and epidemiologists.
My hunch
My hunch
The methods of the economics of happiness and mental well-being will slowly enter public life.
Other important applications
Other important applications
The valuation of environmental amenities
Other important applications
The valuation of environmental amenities
The valuation of health states
Other important applications
The valuation of environmental amenities
The valuation of health states
The valuation of emotional damages for the courts.
Let me close by returning to Lionel Robbins, a distinguished thinker and economist.
Conventionally:
• Economics is a social science concerned with the efficient allocation of scarce resources
We owe this definition to Lionel Robbins of the London School of Economics.
For a long time, it served us well.
But perhaps the time has come to think differently – and to define economics differently.
An alternative definition for 2009:
An alternative definition for 2009:
• Economics is a social science concerned with the best way to allocate plentiful resources to maximize a society’s well-being and mental health.
There is considerable evidence:
• (i) In the rich countries, happiness is running flat or declining
• (ii) Levels of GHQ mental-strain are rising.
These (uncomfortable) facts raise fundamental intellectual and policy questions for our generation and beyond.
Looking ahead
Policy in the coming century may need to concentrate on non-materialistic goals.
Looking ahead
Policy in the coming century may need to concentrate on non-materialistic goals.
GNH not GDP.
Thank you.
Emotional Prosperity
Andrew Oswald
Research site: www.andrewoswald.com
I would like to acknowledge that much of this work is joint with coauthors Andrew Clark, Nick Powdthavee,
David G. Blanchflower, and Steve Wu.