Happiness is hard to measure, but arguable something worth studying, as it is empirically more related to wellbeing than GDP and economic growth. The goal of the research we review in this post is not to substitute a poor proxy for wellbeing such as GDP for another technocratic kpi, even it is better, such as subjective wellbeing. Instead, what we aimed here is to show that due to the clear decoupling and poor impact on income on wellbeing, policies should be focus on improving wellbeing within planetary boundaries and with justice, instead of maximizing GDP growth.
Happiness, pleasure and adaptation to income
As we can see from this short video , happiness has been intentionally confused with pleasure to enable selling addictive goods and services that are doing the contrary effect. Addiction and bad health habits are good for a consumist system that needs to commoditize and sell everything. True happiness is achieved, after the basic goods are in reach, by the quality of our relantionships and our role in society.
Even if we show that reported wellbeing could go on average with greater income, one must be aware that we adapt increases in income, and also to reductions in income (not severe), meaning that its effectiveness after the basic goods are covered is moderate to nil as we get used to it. The reversal shows the potential for similar wellbeing with more sustinable affluence and consumption. Research indicates that life satisfaction tends to remain relatively constant throughout life (Eckersley 2000).
Income is not the only the determinant, there is also evidence of the role of fairness in the acceptance of income reduction. For example, an study in Barcelona during the economic crisis shows that a 5% average reduction in income did not change significantly life satisfaction. The root cause is not clear, but probably the increase free time, the hope in new political changes and the stronger community tights more than compensate the harshness of the crisis.
Happiness driven policy could make some public investments in line with degrowth principles, but also could be coopted by narratives of status, consumption and materialistic goals. Despite this, less materialistic societies will easily reach higher happiness in a degrowth setting.
- Logarithmic versus absolute level of presenting GDP growth: if one plots GDP per capita in absolute dollar values (rather than logform), then one observes diminishing marginal utility of income.
- Beyond some point equal increments of GDP result in progressively smaller increments of life satisfaction.
But, even if there were a long term relantionship, the impact on that in overall happiness remains negligible, the following study implies that there is a need of 800% growth in GDP to reach 1 point of increase reported happiness from 1 to 10. Hardly a good policy on a economic system that is breaking the safe operating space on Earth.
series evidence that a higher economic growth rate increases the rate of improvement in life satisfaction. Hence the cross sectional relationship between income and happiness is no guide to actual historical experience.
Othe literature reveals very similar findings:
- Lack of strong causal connection between income and happiness (Myers and Diener, 1995, 1996; Diener et al., 1999).
- Overall there is growing statistical evidence on the strong decoupling between well-being (objective and subjective parameters) and GDP (Eckersley, 1998)
- Kahneman and Dieton (2010) on the other hand find that high income buys life satisfaction (in cross-sectional data) but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.
The differences in happiness between poor and rich nations, are likely due to other factors, (than wealth only), such as literacy, democracy, equity, and cultural perceptions of happiness. For example, in rich nations, health is influenced more by income distribution than average income levels (Willkinson (1999). As of now, there is no simple answer to what causes happiness (Diener et al. 1999)
- Can this be societal happiness? Is societal happiness a sum of individual “happiness-es”. One of the reasons why country-level aggregates of happiness appear to be correlated with individualism is the fact that common measures of happiness focus on the individual person (Krys et al. 2019)
- Happiness is not a single-faceted phenomenon and it is conceptualized differently across cultures.
- Diener also signaled that people in individualistic cultures tend to grant happiness greater importance than do respondents in collectivistic cultures.
- In collectivistic cultures interdependent happiness may be pursued relatively more than individualistic happiness
- Cross-cultural studies of well-being have introduced the concept of “interdependent happiness” (Hitokoto and Uchida 2015) as a relationship-oriented view of happiness, emphasizing the quality of the connected with others, and (inter/intra)group well-being in general.
- Whereas life satisfaction tends to be more achievement-oriented
- Krus et al. (2021) also found that the country-level aggregates of the collectivist measures of happiness are not significantly correlated with individualism, countering the myth that individualism and happiness are (cor)related (worldwide).
- Research by Ogihara & Uchida (2014) furthermore show that individualistic has orientation dampened close interpersonal relationships and subjective well-being in Japan, suggesting that individualism has a negative effect in East Asian cultural contexts. At the same time sociability (= the quality and quantity of social relationships) is an important predictor of individual well- being.
- In trying to explain why happiness in the US has not been increasing together with growth in the U.S. the last thirty years of the 20th centrury, Bartolini et al. 2004 find that the decline in social capital indicators (and mostly its relational and intrinsically motivated component) for the period 1975-2004, are the major cause of the failed growth of happiness.
Happiness and Economic Growth: The Evidence
happiness and income are positively associated. Evidence for this is found in time series data
for developed countries, transition countries, and less developed countries, whether analyzed
separately or pooled. Skeptics, who claim that the long term time series trend relationship is
positive, are mistaking the short term association for the long term one, or are misguided by a
statistical artifact. Some analysts assert that in less developed countries happiness and
economic growth are positively related “up to some point,” beyond which the association
tends to become nil, but time series data do not support this view. The most striking
contradiction is China where, despite a fourfold multiplication in two decades in real GDP per
capita from a low initial level, life satisfaction has not improved.
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