Van Hoorn, 2009

8/6/2019 Van Hoorn, 2009

1/280

NiCEWorkingPaper09-110May2009

Van Hoorn, A. (2009): Measurement and Public Policy Uses of Subjective Well-BeingNijmegen Center for Economics (NiCE) Institute for Management Research RadboudUniversity Nijmegen

P.O.Box9108,6500HK

Nijmegen,TheNetherlandshttp://www.ru.nl/nice/workingpapers

8/6/2019 Van Hoorn, 2009

2/280

Abstract

Overthecenturies

happiness,ormorebroadly,well-beinghasbeensubjectofunremittingdebate.Recently,

measuresofso-calledsubjectivewell-being(SWB;e.g.self-reportedhappiness)havegainedprominenceand

arereceivingincreasingattentionfromscientists,policymakersandthepublicalike.Aconsensusappearstobeemergingthatpeoplesself-assessmentofhowwell

lifeisgoing

8/6/2019 Van Hoorn, 2009

3/280

canconveyimportantinformation,inparticularon

underlyingemotionalstates.ThispaperintroducesmeasuresofSWB,examiningwhetherthe

measuresaremeaningfulandvalid,andexploringapossibleroleinshapingand

appraisingpublicpolicy.ThefirstpartelaborateswhatSWBmeansanddiscussessomeoftheindicatorsusedtomeasuretheconstruct.Specialattentionispaid

tothequality

8/6/2019 Van Hoorn, 2009

4/280

ofdifferentSWBmeasures,i.e.theirreliability

andvalidity.SWBappearstobelargelydefinedthroughthespecificindicators

usedtomeasureitbutthatisnottosaythatthesemeasures

arenotcapturingsomethingimportant.Inthesecondpart,severalpossibleusesofSWBinthemakingofpolicyarediscerned:(1)SWBasan

explicitpolicytarget;

8/6/2019 Van Hoorn, 2009

5/280

(2)SWBasacomplementtoexisting

measuresofwell-being;(3)SWBasameasuringrodincost-benefitanalyses;

and(4)theuseofSWBintheconstructionofpovertystatisticsand

equivalencescales.ThebroadconclusionthatemergesisthatSWBindeedcanhelpshapeandappraisepublicpolicy.ThisholdsdespitethefactthatSWB

researchstillhas

8/6/2019 Van Hoorn, 2009

6/280

importantgaps.Whatismore,futureresearch

promisestosecurefurthertheusefulnessofSWBresearchinpolicyapplications,

notleastasimprovementsinmeasurementtakehold.

AndrvanHoorn,

RadboudUniversityNijmegen,DepartmentofEconomics,Tel:+31243612344,Fax:+31243612379,E-mail:[email protected]

wasatrainee

8/6/2019 Van Hoorn, 2009

7/280

attheStatisticsDirectorateoftheOrganisation

forEconomicCo-operationandDevelopment.HelpfulcommentsbyJonHall,Anat

ItayandRamziMabsoutaregratefullyacknowledged.Ofcourse,theviewsexpressedin

thispaperaretheauthorsonly.

1

8/6/2019 Van Hoorn, 2009

8/280

1.INTRODUCTIONMeasuresofsubjectivewell-being

(commonlyabbreviatedasSWB)or,inmorepopularterms,happiness,area

contemporarycontributiontoanage-olddebate.Interestinhappinessanditspursuit,or

moregenerallywhatmakesforagoodlife,startedatleasttwomillenniaagowithAristotle(384-322BC)and,later,Epicurus(341-270BC).Others,including

ThomasAquinas,David

8/6/2019 Van Hoorn, 2009

9/280

HumeandJeremyBenthamcontinuedandadded

tothedebate.Theconsensuswasthathappinessmatters.Infact,many

wentsofarastoclaimthat,ultimately,happinessisallthatmatters.1

However,massiveconceptualdifficultiessuggestalessstrongconclusion:maximisingtheexperienceofhappiness,andrelatednotionslikeflourishing,joyorpleasure,whilstminimisingpainful

episodes,isthe

8/6/2019 Van Hoorn, 2009

10/280

quintessentialmotiveunderlying

2

humanbehaviour.

Giventhewidespreadrecognitionoftheimportanceofhappiness,

thestudyofSWBhasasurprisinglyshorthistory(cf.Kahnemanetal.,

1999;Sirgyetal.,2006).SystematicresearchofSWB,inparticularintoitscorrelatesandcauses,didnotstartuntilthesecondpartofthe

20thcentury(Fellows,

8/6/2019 Van Hoorn, 2009

11/280

1966andWilson,1967presentearlyoverviews).3

Theliteraturehasbourgeonedsincethenthough.First,psychologistsandothersocial

scientistshavetakenhugestepsintheirunderstandingofthefactorsinfluencingpeoples

SWB.4Second,themeasurementofSWBhasdrasticallyimproved,whichitisexpectedtocontinuetodowiththespreadinguseofadvancesininformation-and

communicationtechnology.In

8/6/2019 Van Hoorn, 2009

12/280

importantways,then,SWBresearchhasproven

itselfaseriouscontenderinthewiderdisciplineof

1

Short,butmoreelaborateaccountsofthehistoryofthehappinessdebatecan

befoundinMcMahon(2004).Angner(2005)providesamorethoroughoverviewofphilosophicalissuesrelatedtotheconceptofhappinessor,moregenerally,well-being.

KingandNapa

8/6/2019 Van Hoorn, 2009

13/280

(1998)presentevidencethatpeopleindeedattach

greatvaluetohappiness(seealsoDieneretal.,1998andDiener

andOishi,2004).2Forsomecommonphilosophicalconceptualizationsofhappinessandwell-being,

seeBlackburn(1996)andWalsh(2005).3SWB,ourpreferredtermforreasonsdetailedbelow,isactuallyabroadernotionthanjusthappiness(see,for

example,Diener,2006).

8/6/2019 Van Hoorn, 2009

14/280

Happiness,however,isthemorefamiliar,and

certainlycatchier,termoftenusedtorefertothewholeconstructof

SWB.4Diener(1984,1994),Dieneretal.(1999),Easterlin(2003),Freyand

Stutzer(2002),Nettle(2005)andLayard(2005)provideoverviewsofthisliterature.

2

8/6/2019 Van Hoorn, 2009

15/280

socialscience,capableofprovidingvaluable

informationonanessentialaspectofpeopleslivesandsocietiesasa

whole.Assuch,itsolicitsincreasingattentionofpoliticians,governmentofficialsandthe

publicalike.

ThispaperintroducesmeasuresofSWBandexplorestheirapplicationsinpolicymaking.Specificattentionispaidtothequestionwhether

indicatorsofSWB

8/6/2019 Van Hoorn, 2009

16/280

aremeaningfulinthesensethatthey

provideimportantandusefulinformationonhowwellpeopleorsocietiesas

awholearedoing,andhowthisinformationcansubsequentlybeusedto

shapeandappraisepublicpolicy.Theorganisationofthepaperissimple.ItstartsbyelaboratingwhatismeantbythetermSWBinSection

2.Section3

8/6/2019 Van Hoorn, 2009

17/280

subsequentlydiscussessomeactualindicatorsofSWB

andSection4looksatthereliabilityandvalidityofSWBmeasures.

somepublicpolicyusesofSWBareconsideredinSection5andto

concludeSection6givessomefinalandsummarizingthoughts.

2.WHATISSUBJECTIVEWELL-BEING?Aconsensushasgraduallyemergedmainlyfromthepsychological

literaturearounda

8/6/2019 Van Hoorn, 2009

18/280

workingdefinitionofSWB.Wecandefine

SWBaspeoplespositiveevaluationsoftheirlives,which,inturn,includes

positiveemotion,engagement,satisfaction,andmeaning(DienerandSeligman,2004:p.1).As

thissectionshows,however,theconceptissomewhatmorecomplicatedthanthat,buttheessentialfeatureofSWBis,ofcourse,thatitisnot

anobjectivemeasure:

8/6/2019 Van Hoorn, 2009

19/280

Notablyabsentfromdefinitionsof

SWBarenecessaryobjectiveconditionssuchashealth,comfort,virtue,orwealth.

AlthoughsuchconditionsareseenaspotentialinfluencesonSWB,theyarenot

seenasaninherentandnecessarypartofit.(Diener,1984:pp.543-544).

TwoadditionalhallmarksofSWB,nexttoitssubjectivity,are

that:

8/6/2019 Van Hoorn, 2009

20/280

1.apositiveratingrequiresnotonly

positiveexperiencesbutalsotheabsenceofnegativeones;and2.reported

scoresincludeaglobalassessmentofhowwellpeoplethink(feel)theirlife

isgoingandisnotlimitedtooneormoredomainsorspecificperiods(Diener,1994:p.106;seealsoDiener,1984).3

8/6/2019 Van Hoorn, 2009

21/280

Lookingatthelattertwofeatures

ofSWBinmoredetail,weseethattheysuggestthatsubjective

well-beingisactuallyanumbrellaterm,comprisingdifferentelementsofpeopleslives.The

SWBliteraturehasbrokendownpeoplesjudgementsoftheirlivesalongthelinesindicatedaboveandintotwodistinctivecomponents(cf.AndrewsandWithey,1976:

p.18;Veenhoven,

8/6/2019 Van Hoorn, 2009

22/280

1984:p.25).Thefirstcomponentis

theaffectivepartofoverallSWBandreferstoboththepresence

ofpositiveaffectandtheabsenceofnegativeaffect.Thispartisan

evaluationguidedbyemotionsandfeelings.Acognitivepartconstitutesthesecondcomponent.Itisaconscious,information-basedappraisalofoneslifeforwhichpeople

judgetheextent

8/6/2019 Van Hoorn, 2009

23/280

towhichtheirlifesofarmeasures

uptotheirexpectationsandresemblestheirenvisionedideallife.

Researchersinthefieldoftenmakeadistinctionbetweenhappinessandlifesatisfaction.

HappinessissometimesusedtodenotetheaffectivepartofSWB(whichinturnmustbedecomposedinpositiveaffectandnegativeaffect),andlife

satisfactionasthe

8/6/2019 Van Hoorn, 2009

24/280

cognitivepart.5Thislabellingisnotuniversal,

however,andpeoplecommonlyusehappinessandlifesatisfactionsynonymouslywithSWB.

Whileoftenclearfromtheparticularcontext,theambiguoususeofterminologyhappiness,life

satisfactionandSWBdoesrevealthatthefielddoesnotyetagreeonanyonedefinitionforitsover-archingsubjectmatter.Subjectivewell-being,however,isarather

moreaccuratedescription

8/6/2019 Van Hoorn, 2009

25/280

ofthebroaderfieldunderdiscussionhere

and,accordingly,thispaperusesthetermSWBthroughout,notingthatit

isanumbrellatermthatincludesbothsatisfactionandhappiness,howeverdefined(cf.

Diener,2006;seealsonote3).

UnderlyingthedefinitionofSWBasapersonalevaluationofoneslifeistheideathatit

isnotuncommon

8/6/2019 Van Hoorn, 2009

26/280

forpeopletomakesuchaffectiveand

cognitivejudgments(Diener,1994:pp.106-107).Stateddifferently,peoplecontinuouslyevaluatetheir

lifeandaspectsofit,judgingwhichelementsarevaluableanddesirableand

whicharenot.TheaffectiveandthecognitivecomponentofSWBsubsequentlyshareacommoncorebutdifferinimportantrespectsaswell.Lifesatisfaction

andhedoniclevel

8/6/2019 Van Hoorn, 2009

27/280

arelikelytocorrelatebecausebothare

influencedbyappraisalsofoneslifeevents,andactivities,andcircumstancesDiener

(1994:

p.107)notes,butatthesametime,lifesatisfaction

andhedoniclevelarelikelytodiverge5See,forinstance,thediscussioninLyubomirskyetal.(2005:pp.820-822).Thisassociationislikelyto

haveitsroot

8/6/2019 Van Hoorn, 2009

28/280

inthehedonicconceptualisationofhappinessas

pleasureandtheabsenceofpainthatcanbefoundinthe

workofJeremyBenthambutisalsocommonintheSWBliterature(e.g.

Kahneman,1999andLayard,2005).

4

8/6/2019 Van Hoorn, 2009

29/280

becauselifesatisfactionisaglobal

summaryofoneslifeasawhole,whereashedoniclevelconsistsof

ongoingreactionstoevents(andmayalsobeinfluencedbyunconsciousgoalsand

biologicalfactorswhichmayinfluencemood).

RecentworkbyKahnemanandKrueger(2006:p.14)confirmsthisview.Theyfindthatnet(positive

minusnegative)affect

8/6/2019 Van Hoorn, 2009

30/280

andreportedlifesatisfactionareindeedpositively

correlated,butdifferinthefactorsinfluencingthem.Income,educationandmarital

statusarebetterpredictorsoflifesatisfactionthanofaffect,forinstance.Likewise,

dataondailyactivities,e.g.commuting,watchingTVandcooking,seemtomattermorefornetaffect(seealsoCampbelletal.,1976).

Butmeasuresof

8/6/2019 Van Hoorn, 2009

31/280

SWBneednotrefertolifeas

awhole.Rather,onecaninvestigateseparatelywhethersomeoneishappyor

satisfiedwithdifferentdomainsoflife,suchaswork,familylife,financialsituation

orhealth.Onewouldexpectthatsomeonewhoissatisfiedwithallrelevantaspectsofhisorherlife,willjudgelifeasawhole

favourableaswell.

8/6/2019 Van Hoorn, 2009

32/280

Forexample,AndrewsandWithey(1976:p.

127)findthatsatisfactionwithfamily,money,amountoffun,housing,national

governmentandso-calledself-efficacymakesuphalfofallthevarianceinreported

lifesatisfaction.Theexactrelationbetweendomainsatisfactionandglobalsatisfactionisunknown,however.Thatis,itisnotclearwhetherpeopleevaluatetheirlife

bylookingat

8/6/2019 Van Hoorn, 2009

33/280

specificaspects(thebottom-upapproach)orwhether

theglobaljudgmenttricklesdowntolower-levelappraisals(top-down)(Veenhoven,1996:p.

23and1997:pp.19-20;seealsoSirgyetal.,2006:p.426).

DienerandSeligman(2004:p.12)reviewevidenceoflower-levelsatisfactionspillingovertohigher-levelsatisfaction,butalsobetweendomains,i.e.jobsatisfactionspillsover

tomaritalsatisfaction.

8/6/2019 Van Hoorn, 2009

34/280

Toreturntothedefinition

ofSWB,itisclearthat,asmentioned,thefieldlacksa

single,comprehensivedefinition.Dieneretal.(1999:p.277)findthatsubjectivewell-being

isabroadcategoryofphenomenathatincludespeoplesemotionalresponses,domainsatisfactions,andglobaljudgementsoflifesatisfaction(cf.DienerandSeligman,2004:p.

1).Thisis

8/6/2019 Van Hoorn, 2009

35/280

notauniversaldefinitionbutrathera

descriptionofwhatSWBcomprises.Theabsenceofaclear-cutdefinitionreflects

that,asaconcept,SWBhasnoprecisetheoreticalbasis.Indeed,thefield

appearslargelydrivenbyempiricalwork,andSWBisconceptualisedthroughthespecificindicatorsused,i.e.bythespecificquestionsasked.Thenextsectionelaborates

themeasurementof

8/6/2019 Van Hoorn, 2009

36/280

SWB.

3.MEASURINGSUBJECTIVEWELL-BEING

5

8/6/2019 Van Hoorn, 2009

37/280

3.1Single-itemscalesSincethefirst

systematicanalysesofSWBsomefivedecadesago,alargenumberof

SWBmeasureshavebeendeveloped.Themostwidespreadofthesearealsothe

moststraightforward.Questionnairessimplyaskpeopletostatehowhappyorsatisfiedtheyare(withtheirlifeasawhole).Twowell-knownexamplesofsuch

single-itemquestions,used

8/6/2019 Van Hoorn, 2009

38/280

inthefamousWorldValuesSurvey(European

ValuesStudyGroupandWorldValuesSurveyAssociation,2006),are:

Takingallthingstogether,wouldyousayyouare:1Very

happy2Quitehappy3Notveryhappy4Notatallhappy

and

Allthingsconsidered,how

satisfiedareyou

8/6/2019 Van Hoorn, 2009

39/280

withyourlifeasawholethese

days?

123456789

10

DissatisfiedSatisfied

Othersingle-itemquestionsexist,butthe

basicmethodofmeasuringSWBiscapturedbythesequestions.Toaddressspecificissues,suchassatisfactionwithadomain,thestandardapproachcanbe

adaptedtoask,

8/6/2019 Van Hoorn, 2009

40/280

forinstance,Overall,howsatisfiedordissatisfied

areyouwithyourjob/homelife/financialsituation?

3.2Multi-itemscalesSinceSWBisabroadcategoryofphenomena(cf.

Dieneretal.,1999:p.277),oneshouldnotexpectsingle-itemquestionstobeabletoprovideanall-encompassingindicatorofpeoplesevaluationoftheir

lives.Indeed,it

8/6/2019 Van Hoorn, 2009

41/280

wouldbeinfeasibletohaveasingle-item

6

8/6/2019 Van Hoorn, 2009

42/280

8/6/2019 Van Hoorn, 2009

43/280

normallyconsideredmorereliablethanthoseof

single-itemmeasures(seealsoSection4onreliabilityandvalidity).Accordingly,a

broadarrayofmeasuresexists(see,forexample,Veenhoven,1996:pp.3-4).Here

wediscusstwooften-usedscales,thoughmanymoreexist,eachwiththeirownstrengthsandweaknesses.

3.2.1PositiveandNegativeAffectSchedule(PANAS)

ScalesThePositive

8/6/2019 Van Hoorn, 2009

44/280

andNegativeAffectSchedule(PANAS)scales(Watson

etal.,1988)aredesignedspecificallytomeasurepositiveandnegativeemotions.

ThePANAScaneasilybetailoredtoincludelessormorefeelingsor

bebroaderornarrowerinitscoveroftimeperiods.Itasksabouttheexperienceofcertainemotionalstates:

Thisscaleconsistsof

anumberof

8/6/2019 Van Hoorn, 2009

45/280

wordsthatdescribedifferentfeelingsandemotions.

Indicatetowhatextent[youfeltthiswayduringthepastweek].

Usethefollowingscaletorecordyouranswers:

1Very

slightlyornotatall2Alittle3Moderately4Quiteabit5Extremely

___Interested___

Distressed___Excited

8/6/2019 Van Hoorn, 2009

46/280

___Upset___Strong___Guilty

[Etcetera]

7

8/6/2019 Van Hoorn, 2009

47/280

Theoverallratingisobtainedby

aggregatingtheanswerstothedifferentstates.

3.2.2SatisfactionWith

LifeScale(SWLS)TheSatisfactionWithLifeScale(SWLS;Dieneretal.,1985;

seealsoPavotandDiener,1993a)isanexampleofamulti-itemmeasureofSWBthatlimitsattentiontoaspecificaspectofSWB,in

thiscaselife

8/6/2019 Van Hoorn, 2009

48/280

satisfaction.Thequestionnaireforthisscalereads

asfollows:

Belowarefivestatementsthatyoumayagree

ordisagreewith.Usingthe1to7scalebelowindicateyouragreement

witheachitembyplacingtheappropriatenumberonthelineprecedingthatitem.Pleasebeopenandhonestinyourresponding.

1

Stronglydisagree

8/6/2019 Van Hoorn, 2009

49/280

2Disagree3Slightlydisagree

4Neitheragreenordisagree5Slightlyagree6

Agree7Stronglyagree

___Inmostwaysmylife

isclosetomyideal___Theconditionsofmylifeareexcellent___Iamsatisfiedwithmylife___SofarIhave

gottentheimportant

8/6/2019 Van Hoorn, 2009

50/280

thingsIwantinlife___If

Icouldlivemylifeover,Iwouldchangealmostnothing

Theanswerstothesefivequestionsaresummedtoobtainanoverall

rating:

59Extremelydissatisfied1014Dissatisfied1519Slightlydissatisfied20Neutral21

25Slightly

8/6/2019 Van Hoorn, 2009

51/280

satisfied2630Satisfied8

8/6/2019 Van Hoorn, 2009

52/280

3135Extremelysatisfied

TheconstructmeasuredbytheSWLScloselyresemblestheoneunderlyingthe

single-itemlifesatisfactionquestiondiscussedabove.ThedifferenceisthattheSWLSprovides

amorereliablemeasureoflifesatisfaction(seeSection4),butisobviouslymorecostlytocollectbothintermsofadministrationcostsandrespondent

burden.

8/6/2019 Van Hoorn, 2009

53/280

8/6/2019 Van Hoorn, 2009

54/280

al.,2004a,2004b).

3.3.1Experience

SamplingMethod(ESM)orEcologicalMomentaryAssessment(EMA)ESMisamethod

toobtainself-appraisals.Individualsareaskedrepeatedly,oftenoverrandomintervalsandfor

aprolongedperiod,tomakeacertainassessment,whichcanrangefromfillinginquestionnairesliketheonesjustdiscussed,butcanalsoinvolvephysiological

tests(e.g.blood

8/6/2019 Van Hoorn, 2009

55/280

pressurelevels,heartrates).Theessentialfeatures

ofESMarethatthequestionsandevaluationsaremadefrequently,about

thetimeperiodthathasjustelapsedandinrespondentsday-to-daysurroundings.It

is,infact,thesequalitiesthatdroveESMsdevelopmentinthefirstplace.AsStoneetal.(1999:pp.27-28)pointout:(i)studyingindividuals

intheirtypical

8/6/2019 Van Hoorn, 2009

56/280

8/6/2019 Van Hoorn, 2009

57/280

adesignatedintervalandforastipulated

amountoftime(e.g.onereporteveryotherhour);6Famousis

thephenomenonknownaswhite-coathypertensioninwhichrespondentsbloodpressurelevelsare

elevatedwhenmeasuredbymedicalpersonnelbutnotwhenmeasuredathomebythemselves(Stoneetal.,1999:pp.27-28).

9

8/6/2019 Van Hoorn, 2009

58/280

2.Event-contingentsampling:subjectsfileself-reports

whenapre-specifiedeventtakesplaceorhastakenplace(e.g.a

reportaftereverysocialencounter);and3.Signal-contingentsampling:subjectsgivetheirself-reports

whenpromptedbyarandomly-timedsignalthisistheformofsamplingthatistypicallylabelledESM.ESMandEMAareoftenequated(Scollonetal.,

2003:p.7).

8/6/2019 Van Hoorn, 2009

59/280

ButStoneetal.(1999)distinguishESM

fromecologicalmomentaryassessment(EMA)onthegroundsthatEMAalsocollects

informationaboutenvironmentalcircumstanceswhiletheformerisonlyinterestedinrespondentsself-evaluation.

ESMcanbeundertakeninseveralways.Fortheself-appraisalanyscaleormeasureofSWBwilldo;simplychoosetheonethat

bestcapturesthe

8/6/2019 Van Hoorn, 2009

60/280

8/6/2019 Van Hoorn, 2009

61/280

andthesecomewithimportantadvantages.Automated

questionnairesarereadilyavailableandcompletedreportscanbeanalysedinstantly.

Unsurprisingly,thebenefitsofferedbyESMandEMAintermsofcoverage,

ecologicalvalidityandreliabilitycomeatacost.Usingthesemethodsandobtainingregular,virtuallyonlineself-assessmentsismuchmoreexpensivethantheuseof,

say,one-timequestionnaires,

8/6/2019 Van Hoorn, 2009

62/280

andthefinalchoiceofsurveyinstrument

requirescarefulconsideration.7

3.3.2DayReconstructionMethod(DRM)TheDay

ReconstructionMethod(DRM)isanotherspecificapproachtocollectreportedSWB.Itshares

manyoftheadvantagesoftheothermethods,butappearseasiertoimplement.Thetechniquerequiresrespondentstoreportabouttheprecedingdayandevaluate

itsvariousepisodes

8/6/2019 Van Hoorn, 2009

63/280

(e.g.hours).Kahnemanetal.(2004a)first

appliedhistechniqueandtheirquestionnaireisalongtheselines:

Howdidyoufeelduringthisepisode?

7AccordingtoStoneet

al.(1999:p.30)ESMorEMAisparticularlyappropriatetomeasurepainandsymptomsofpatients.

10

8/6/2019 Van Hoorn, 2009

64/280

Pleaserateeachfeelingonthe

scalegiven.Aratingof0meansthatyoudidnotexperience

thatfeelingatall.Aratingof6meansthatthisfeelingwas

averyimportantpartoftheexperience.

Happy0,Notatall6,VerymuchFrustrated/annoyed0,Notatall

6,Very

8/6/2019 Van Hoorn, 2009

65/280

muchDepressed/blue0,Notatall

6,Verymuch[Etcetera]Again,however,themethodleavesopen

theuseofdifferentmeasuresofSWB.

3.4DiscussionThereview

aboveshowstherearemanyapproachestothemeasurementofSWB,eachwiththeirownbenefitsanddrawbacks.Thedifferentapproachesalsoshareanimportant

commonality:whateverquestion,

8/6/2019 Van Hoorn, 2009

66/280

noneentailshappinessorsatisfactionina

well-definedform.MeasuresofSWBsimplydepicthowpeopleevaluatetheirlives

oraspectsthereofinresponsetoquestionsaskingthem,forinstance,howhappy

orsatisfiedtheyare.TheexistenceofvariousapproachestomeasuringSWBindicatesthatthefieldhasnotsolvedtheelusivequestionofwhatis

happiness(nordoes

8/6/2019 Van Hoorn, 2009

67/280

itgenerallyclaimtohavedoneso).

Itmerelycontributestotheage-oldresearchprogrammeonthegoodlife

andhumanbettermentbyanalysingempiricalconstructsSWBresearchersfeelhaveimportantbearing

onthisissue.Accordingly,andasalludedtointheprevioussection,thefieldischaracterisedbymeasurementbeforeorwithouttheorytoparaphrasea

long-standingdiscussionin

8/6/2019 Van Hoorn, 2009

68/280

economics.8Animportantquestioniswhetherreported

happinessorlifesatisfactionscoresaremeaningful.Thepaperturnstothis

questionnext.

4.ARESWBMEASURESMEANINGFUL?ForSWBmeasuresto

bemeaningfultheyshouldbevalid(thatistheyshouldcapturethephenomenonofinterestthattheypurporttomeasure)andreliable(thatisthey

should

8/6/2019 Van Hoorn, 2009

69/280

8See,forinstance,Prescott(1986)and

especiallyKoopmans(1947).

11

8/6/2019 Van Hoorn, 2009

70/280

measureitaccurately).Agooddeal

ofworkhasbeendonebySWBresearcherstoinvestigate

9

this.

4.1ReliabilityThereliabilityofanindicatorcanbe

definedasitsoverallquality,i.e.itsconsistencyanditsabilitytogivethesameresultsinrepeatedmeasurement.Onegoodmeasureofanindicators

reliabilityisits

8/6/2019 Van Hoorn, 2009

71/280

test-retestcorrelation(LarsenandFredrickson,1999:p.

43).10Thatis,thelevelofsimilarityobtainedbymakingthesame

measurementtwice,separatedbysometimeperiod.Itiswellknownthatminor

differencesincircumstancesandtechnicalfeaturesofthespecificquestionnaireusedcanaffectthereportedlevelofSWBhoweverdefined(seeSchwarzandStrack,1999:

p.62).Correspondingly,

8/6/2019 Van Hoorn, 2009

72/280

8/6/2019 Van Hoorn, 2009

73/280

discussestheeffectofthelagbetween

timesofaskingontest-retestcorrelation:ifrespondentsareaskedtwicein

thesameinterviewcorrelationsareapproximately0.70;ifthelagspansaweek

test-retestcorrelationdropstoabout0.60.Hepointsout,however,thatpeopleseldommakelargemoves,e.g.fromsatisfiedtodissatisfied.Finally,adetailedstudy

byEhrhardtet

8/6/2019 Van Hoorn, 2009

74/280

al.(2000)examinespaneldataforGermany

fortheperiod1984-1994.Theyfindthatatthestartofthe

sampleperiodtheyear-to-yearcorrelationwas0.45butthat,forunknownreasons,it

graduallyincreasedto0.54.Atthesametime,however,thecorrelationbetweenSWBreportedin1984andthatreportedin1994wasonly0.29.This

suggeststhatthe

8/6/2019 Van Hoorn, 2009

75/280

measureisreliablebutissusceptibleto

changeaswell,forinstanceinresponsetochangesinobjectivecircumstances.

9Forsurveysofmuchofthevalidationexercises,see,amongst

others,BlanchflowerandOswald(2004),DiTellaandMacCulloch(2006),Diener(1984,1994),Dieneretal.(1999),DienerandSuh(1999),FreyandStutzer(2002),

KahnemanandKrueger

8/6/2019 Van Hoorn, 2009

76/280

(2006),Nettle(2005)andLayard(2005).10

Incaseofmulti-itemmeasures(seediscussionbelow),reliabilitycanbeassessed

furtherbylookingattheinternalconsistencyorhomogeneityofthespecificmeasures,

thatis,byanalysingtheextenttowhichthedifferentitemsofthescaleindeedmeasurethesameunderlyingconstruct(LarsenandFredrickson,1999:p.

43).

8/6/2019 Van Hoorn, 2009

77/280

8/6/2019 Van Hoorn, 2009

78/280

8/6/2019 Van Hoorn, 2009

79/280

also,andmorefundamentally,bythespecific

measurementscaleused.Studiesshowthatthemoreadvancedmeasures,suchas

multi-itemquestionnaires,producemorereliableSWBscores(seetheoverviewinKruegerand

Schkade,2008).Inaddition,test-retestcorrelationislikelytobelowerforindicatorstargetingtheaffectivepartofSWBthanforindicatorsaimingtomeasure

thecognitivepart.

8/6/2019 Van Hoorn, 2009

80/280

Thus,measuresofhappinessmaybemore

susceptibletowhimsicalcircumstancestheoutcomeofasoccermatchandtheweather,

whetheritisrainyorsunny,arefamousexamples(SchwarzandStrack,1999:

p.62)thanmeasuresoflifesatisfaction(KruegerandSchkade,2008).

4.2ValidityValiditycomesinmanysizesandshapes.Initsregularuse,

validitydenotesso-called

8/6/2019 Van Hoorn, 2009

81/280

constructvalidity(LarsenandFredrickson,1999:p.

44).Ameasurehasconstructvalidityifitisindeedableto

capturetheconstructthatitisintendedtocapture.Twoimportantaspectsthat

cancontributetoanindicatorsoverallconstructvalidityareitsconvergentvalidityanditsdiscriminantvalidity.Convergentvalidityreferstothecorrespondencebetweentheindicator

ofinterestand

8/6/2019 Van Hoorn, 2009

82/280

otherindicatorspurportingtomeasurethesame

construct.Ifthemeasureofinterestistohaveconvergentvaliditythe

resultsobtainedshouldconvergeontheresultsobtainedusingtheseothermeasures;thus,

convergentvalidityishighifdifferentmeasuresof,say,positiveaffectgivesimilarresults.Discriminantvalidityconsidershowwelltheindicatorcorrelates(or,usually,fails

tocorrelate)with

8/6/2019 Van Hoorn, 2009

83/280

measuresthatmeasuresomethingdifferent.

TheSWBliteraturepaysalotofattentiontothevalidityof

itsmeasures(seenote9).Theconclusionofthereviewsisthatmeasures

ofSWBdoquitewellonthevariousdimensionsofvaliditymentionedabove.Table1belowpresentsabriefoverviewofsomecommonlycitedevidence

onthevalidity

8/6/2019 Van Hoorn, 2009

84/280

8/6/2019 Van Hoorn, 2009

85/280

Table1:ValidityofSWBmeasures

StudyMainfindingsAndrewsandCrandall(1976)Differentsingle-itemmeasures

ofSWBgivesimilarresults,andofthetotalvarianceinsingleitems

about64%isvalidvariance.12Validitycanbeincreasedfurtherusingcompositemulti-itemindicators;afive-itemscalewouldtypicallyhaveabout80%validvariance.Costa

andMcCrae(1988)

8/6/2019 Van Hoorn, 2009

86/280

Self-reportedSWBscoresshowconvergencewithreports

filedbyspouses.Dieneretal.(1991)Self-reportedlevelsofSWBconverge

onthosereportedbyothers(e.g.byfamilyandfriends).Ekmanetal.

(1990)Subjectivereportsontheexperienceofpositiveemotionsduringanexperimentcorrelatedwiththenumberofgenuinesmiles(referredtoasDuchennesmiles)that

occurredduringthe

8/6/2019 Van Hoorn, 2009

87/280

8/6/2019 Van Hoorn, 2009

88/280

betweenpositiveoverallSWBontheone

handandneuroticismandself-reportedsymptomsontheother.Strongpositivecorrelations

arefoundbetweenoverallSWBandratingsforseverallifedomains,suchas

friendship,lovelifeandfinancialsituation.PavotandDiener(1993b)Self-reportedSWBcorrelateshighlywithpeerreports,thepersonalitytraitsofextraversionandneuroticismbut

notwithcurrent

8/6/2019 Van Hoorn, 2009

89/280

mood.Contexthasaslighteffecton

reportedscoreswhensingle-itemmeasuresareusedbutmultiple-itemscalesappearlargely

immune.

12Thevalidvarianceiscausedbythedifferencein

SWBasactuallyperceivedbythedifferentrespondents.Othervarianceresultsfrommeasurementerror,forinstance,fromrespondentsentertainingadifferentinterpretationoftheresponse

categories(beingvery

8/6/2019 Van Hoorn, 2009

90/280

8/6/2019 Van Hoorn, 2009

91/280

8/6/2019 Van Hoorn, 2009

92/280

thespecificmeasureused).SeidlitzandDiener

(1993)ForpeoplewithhigherSWBscores,memoriesofhappyeventsare

moreaccessiblethanforpeoplewithlowerSWB,whilecurrentmoodhasonly

amodesteffectontheavailabilityofmemories.WatsonandClark(1991)Thereisastrongcorrelationbetweenself-reportedscoresoneightdifferentnegativeaffect

andpositiveaffect

8/6/2019 Van Hoorn, 2009

93/280

scalesandratingsbypeers.

FurtherconfirmationofthevalidityofSWBmeasurescomesfromthelarge

literaturethathasrelatedSWBtoawiderangeofothervariables.Researchers

havefoundthatnumerousfactors,bothobjectiveandsubjective,correlatehighlysignificantlywithSWB(forrecentsurveysoftheevidenceseeArgyle,1999,DiTella

andMacCulloch,2006,

8/6/2019 Van Hoorn, 2009

94/280

DienerandSuh,1999,Dieneretal.,

1999,Easterlin,2003,FreyandStutzer,2002,Layard,2005,Lyubomirskyetal.,

2005andNettle,2005).Factorsincludeindividualcircumstancessuchashealth,personalincome,

employmentstatusandsocialrelations,buttherearelinkswithsocietalfeaturestoo.Notably,cross-countryevidencefindsthatsuchfactorsaspoliticalfreedom,grossdomestic

product(GDP)per

8/6/2019 Van Hoorn, 2009

95/280

capita,environmentalqualityetceteraallcorrelate

withaverageSWBreportedbycitizensfromdifferentcountries.Thesefindings,and

manymorelikethem,providefurtherevidencethatmeasuresofSWBappearto

capturesomethingimportant.Thatis,SWBmatters.

TheapparentpervasivenessofresearchvalidatingmeasuresofSWBnotwithstanding,someimportantcriticalremarkshavealso

beenmade.Whimsical

8/6/2019 Van Hoorn, 2009

96/280

circumstancesliketheoutcomeofasoccer

matchinfluencethelevelofSWBpeoplereport(SchwarzandStrack,1999:

p.62).SucheffectsobviouslyareanimportantweaknessofSWBmeasuresand,

infact,othersurveydata(cf.BertrandandMullainathan,2001).Theerrorsgenerallyseemtobeofarandomratherthanastructuralnature,however,

workingbothto

8/6/2019 Van Hoorn, 2009

97/280

increaseanddecreaseSWBscores.Consequently,the

measuringinstrumentisunlikelytobesystematicallybiased.Indeed,usinglargeenough

sampleswouldgoalongwayinaddressingpossibleproblems

15

8/6/2019 Van Hoorn, 2009

98/280

introducedbycontextualfactorsinfluencingthe

reportedlevelofSWB.13AndthisistheadvantageofusingESM,

EMAorDRM:usingrepeatedmeasuresofSWBforasingleindividuallessens

theinfluenceofminorlifeevents.

AnotherchallengeSWBindicatorsfaceconcernstheirvalidityincross-nationalcomparisons.Heretheissueisthepossible

impactofculture

8/6/2019 Van Hoorn, 2009

99/280

andlanguageonSWBratings(seeDiener

andSuh,2000:pp.5-9forashortintroductiontotheseissues;

seealsoWierzbicka,2004).BytheverynatureofSWBandtheway

itismeasured,i.e.throughquestionnaires,culturalandlinguisticfactorscanaffectSWBratings.AsWierzbicka(1999:

p.31)putsit,feelingsrepresent

thesubjectiveexperience

8/6/2019 Van Hoorn, 2009

100/280

ofbiological(physiological)events,buttheycan

becategorizedinavarietyofways,andtheyarecategorizeddifferently

indifferentcultures.SWBmaythusbesusceptibletoinfluencesthatdiffersystematically

overcountries,meaningthatmeasuredlevelsofSWBcanbestructurallybiased.Evidenceonthisissueisnotoverwhelming,however.Languagegenerallydoesnotseem

toposemuch

8/6/2019 Van Hoorn, 2009

101/280

ofaproblem.Sometentativeevidencecomes

fromInglehart(1990,pp.28-29).Helooksataveragelevelsofself-reported

lifesatisfactionforGerman-speaking,French-speakingandItalian-speakingSwissrespectively,andfindsthatfor

allSwissaveragescoresarehigherthanthescoresoftheirlinguisticcounterparts,peoplefromGermany,FranceandItalyrespectively.Moreconvincingly,OuweneelandVeenhoven

(1991)compareself-reports

8/6/2019 Van Hoorn, 2009

102/280

acrosslanguagegroupsinbilingualnationsand

donotfindareliablelanguageeffect.Inaddition,theyfindthat

thepercentageofdontknowanswerstoSWBquestions(ignorance)doesnotdiffer

muchbetweencountries.

Culturalcharacteristicswouldappeartobeamoreimportantfactorandpossiblesourceofbias.Uchidaetal.(2004)review

theavailablecross-cultural

8/6/2019 Van Hoorn, 2009

103/280

evidenceonSWBandfindculturaldissimilarities,

notablyinthepredictorsofSWB.Moreconcretely,Scollonetal.(2004)

examinethreedifferenttypesofglobalself-reportsofpleasant/unpleasantemotionsforpeoplefrom

fivegroupswithdifferentculturalbackgroundsandfindthatforallmeasurescultureisasourceofresponsedifferencesbetweenthegroups.Vittersetal.

(2005)finda

8/6/2019 Van Hoorn, 2009

104/280

13Boulding(1972:p.466)

describesthiseffectofthelawoflargenumbersasfollows:Even

ifwecannotgetveryreliablemeasuresfortheindividual,bythefamous

principlewhichIhavesometimescalledKatonasLaw,thatthesummationofignoranceproducesknowledge,wemayfindanoperationorinstrumentwithself-cancellingrandom

factorswhichwill

8/6/2019 Van Hoorn, 2009

105/280

giveusamuchbettermeasurefor

ahundredorathousandindividualsthanwecangetforone.

16

8/6/2019 Van Hoorn, 2009

106/280

similarresultintheiranalysisof

lifesatisfactiondatafromNorwayandGreenland.Overall,noclearpictureemerges,

however,because,forexample,Dieneretal.(1995)discardaculturalexplanationfor

particularobserveddifferencesinSWB(evenwithincomecontrolledfor).Specifically,humilityandsocialdesirability(wherepeoplegivetheanswerstheythinkotherswillregard

favourably)donot

8/6/2019 Van Hoorn, 2009

107/280

8/6/2019 Van Hoorn, 2009

108/280

SWBisdifferentiallystructuredintermsof

itspredictorsdoesnotbyitselfmeanthatthemeasureissomehow

biased.Incontrast,theeffectofculturemaybegenuine.Alesinaetal.

(2004),forexample,reportthatSWBscoresofEuropeanssuffersmorefromincomeinequalitythantheSWBratingsofAmericans(seealsoDiTellaand

MacCulloch,2006:pp.

8/6/2019 Van Hoorn, 2009

109/280

39-43).Otherstudiesfindmarkedheterogeneityin

thepredictorsofSWBacrosscountrieswithindividualisticculturesandthosewith

morecollectivistcultures(Suhetal.,1998;Oishietal.,1999).Inthis

sense,culturalandlinguisticfactorsareclearlynotasourceofbiasincross-countrycomparisonsanuisancewemaywanttodisposeofbutrathertherole

ofthesefactors

8/6/2019 Van Hoorn, 2009

110/280

inreportedSWB,byitself,isinteresting

andworthyofattention.

Relatedresearchhaslookedmoredirectly

atemotionsthatareeithersharedby,oruniqueto,differentcultures.For

instance,Ekmanetal.(1987)findthatthereiscross-culturalagreementbothonthetypeofemotionsexpressedinfacialimages(e.g.sadnessorjoy).

Resultsfromthis

8/6/2019 Van Hoorn, 2009

111/280

8/6/2019 Van Hoorn, 2009

112/280

andculturalborders.14

14Some

culturallyrootedbiasisunavoidableinmanyindicatorseven,forexample,in

thecomparisonofnationalincomenumbers.Despiteacommondefinition,thesestatisticsare

influencedbyhabitsandcustomsregardingwhatactivitytakesplacethroughthemarket(cf.Frankel,1953).Asanillustration,takeRosens(1996:pp734-5)observation

that:[i]nSweden

8/6/2019 Van Hoorn, 2009

113/280

alargefractionofwomentakecare

ofthechildrenofwomenwhoworkinthepublicsectorto

carefortheparentsofthewomenwhoarelookingaftertheirchildren.

17

8/6/2019 Van Hoorn, 2009

114/280

4.3Moreonthemeaningof

SWBThefindingsfromtheSWBliteraturepresentedabovesupporttheconclusion

thatSWBmeasuresaremeaningful.Butthereislessevidenceaboutthemeaning

ofthesemeasures,otherthanthattheyarecapturingsomethingimportant.SWBremainslargelyanabstractconcept.Twoadditionallinesofresearchtacklethisissue.

First,

8/6/2019 Van Hoorn, 2009

115/280

8/6/2019 Van Hoorn, 2009

116/280

withobjectivevariablesthathaveasolid

biologicalfoundation.

Thesecondlineofresearchgoesbeyondsimple

correlatesofSWB,andlooksatthecausallinksbetweenlevelsofSWB

andotheroutcomes.ThecurrentlevelofreportedSWBisfoundtohavesubstantialpredictivepowerforsomeimportantaspectsofwell-being.Forinstance,Cohen

etal.(1995)

8/6/2019 Van Hoorn, 2009

117/280

reportthatthelevelofSWBof

healthypeoplemeasuredbeforeexperimentallyinducinganillnessthroughexposuretoa

respiratoryviruspredicted

15Levesqueetal.(2003),forexample,applied

functionalmagneticresonanceimaging(fMRI)toanalysetheneuroanatomicalcorrelatesofsadfeelingsinhealthychildren.Measuredbrainactivityshowedsadfeelingsareassociatedwith

significantbilateralactivations

8/6/2019 Van Hoorn, 2009

118/280

8/6/2019 Van Hoorn, 2009

119/280

longerthanforthosewithlowerlevels

ofreportedSWB.Urryetal.(2004)administeredSWBquestionnairestopeople

priortoanalysingtheirbrainactivity.AhigherlevelofreportedSWBwas

associatedwithgreaterleftthanrightsuperiorfrontalactivation.Steptoeetal.(2005)reportthatpositiveaffectisassociatedwithreducedneuroendocrine,inflammatoryandcardiovascular

activity.Positiveaffect

8/6/2019 Van Hoorn, 2009

120/280

wasalsoinverselyrelatedtocortisoloutput

duringtheday(controllingforotherfactorssuchasageandgender)

andheartrate.Duringmentalstresstestinginthelaboratorypeoplewithhigher

positiveaffecthadsmallerplasmafibrinogenstressresponses.Finally,astudybyRainvilleetal.(2006)showsthatbasicemotionsareassociatedwithdistinctivepatterns

ofcardio-respiratoryactivity.

8/6/2019 Van Hoorn, 2009

121/280

18

8/6/2019 Van Hoorn, 2009

122/280

subsequentcomplaints.Inparticular,higherscores

onnegativeaffectwereassociatedwithhigherdiseaseseverityandthenumber

ofhealthcomplaintslikearunnynose,congestionandsneezing.Koivumaa-Honkanenetal.

(2000)findthatbeingdissatisfiedwithlifepredictshighermortalityandisindicativeofgeneralhealthrisk.Inaddition,lowsatisfactionisassociatedwitha

higherriskof

8/6/2019 Van Hoorn, 2009

123/280

suicide(Koivumaa-Honkanenetal.,2001).Danneret

al.s(2001)studyofautobiographiesof180Catholicnunswrittenatage

22showsthatpositiveemotionalcontenthasastrongpositiverelationwithlongevity

sixdecadeslater.Finally,Veenhoven(2008)presentsevidencethathigherSWBpredictslongevityinhealthypopulationsbutnotinsickpopulations,suggestingthatSWBprotects

againstbecomingill.

8/6/2019 Van Hoorn, 2009

124/280

8/6/2019 Van Hoorn, 2009

125/280

higherincomeandbettersupervisoryevaluations,and

arelesslikelytosufferunemployment;aremorelikelytoget

married(happily)andmorelikelytoremarryafterdivorce;havebettermortality,

lesssuicide,lowergeneralhealthrisk,andhaveabetterchanceofsurvivingconditionssuchascoronaryheartdisease;willbemoresocialas

shownbytime

8/6/2019 Van Hoorn, 2009

126/280

spentdoingvolunteerworkthreeyearslater;

arejudgedasmorecreativebyotherslateron;and

drinklessalcoholfiveyearslater(andsmokelessnow).Lyubomirskyetal.

(2005)alsosurveyexperimentalstudiesandtheyconfirmthatpositiveaffectandpositiveemotionsthathavebeenexperimentallyinducedcancausegoodoutcomes.Theexperiments

byandlarge

8/6/2019 Van Hoorn, 2009

127/280

findthatthesefeelingspromote,amongstothers,

self-perception,sociability,conflictresolutionandaltruism,andthisagainpointstoa

roleforSWBasacausalfactorinmanypositiveoutcomes.

4.4DiscussionTheevidencepresentedinthissectionsuggeststhatmanymeasuresofSWBaremeaningfulandcaptureimportantinformation.AsDienerandSuh(1999:

p.438)conclude,

8/6/2019 Van Hoorn, 2009

128/280

SWBindicatorshaveadegreeof

validityandareoftennotascontaminatedaspopularloremightsuggest.

Theyarenotwithouttheirfrailtiesbutsomeoftheweaknessesaself-

measuredconstructlikeSWBispronetohavecanbeovercome.

19

8/6/2019 Van Hoorn, 2009

129/280

Thefieldstartedwithasimple

questionaskingpeopletoevaluatetheirlifebyputtingalabelon

it.Morecomplicatedsurveymethodologiesandmulti-itemscaleshavebeendevelopedandappear

tohaveimprovedthemeasurementofSWB.Althoughmuchremainstobediscovered,itseemslikelythatmoreprogresswillbemadeandonecan

envisionagrowing

8/6/2019 Van Hoorn, 2009

130/280

connectionbetweentheSWBconstructonthe

onehandandobjectivebiologicalphenomenasuchaspatternsofbrainactivity

ontheother.Suchadevelopmentwouldactuallyfitthegrowingtrendof

mergingsocialscienceswithcognitiveandbrainsciences;forinstance,anewfieldineconomics,calledneuroeconomics,usesinsightsandmethodsfromneurosciencetostudy

decisionmakingand

8/6/2019 Van Hoorn, 2009

131/280

henceimproveeconomictheory(Camereretal.,

2005).AlthoughourcurrentunderstandingoftheneuroanatomicalcorrelatesofSWBand

themechanismunderlyingtheobservedrelationsbetweenSWBandbrainactivityissketchy,

knowledgeinthisareaisadvancingatgreatspeed.Ultimately,wemightactuallybeabletocalibrateSWBscoreswithamixtureofphysiologicalphenomena

givingitan

8/6/2019 Van Hoorn, 2009

132/280

objective

16

anchor.

However,allthesepossibilitieshavestrengthsandweaknesses.SWBmeasuredwith

asimplesingle-itemscalemayprovetobemorethanadequateinterms

ofbothreliabilityandvalidityforsomepurposes.ForothersonemightwantmoreadvancedmeasuresofSWBandmorethanonescalemaybe

usedtoallow

8/6/2019 Van Hoorn, 2009

133/280

forcross-referencingofthefindings(cf.Larsen

andFrederickson,1999).Overall,nogoldstandardexists(LarsenandFrederickson,1999:

p.56)andeachresearchprojectshouldstartwithacareful

deliberationtoascertainthemostsuitablemeasuringinstrument.5.PUBLICPOLICYUSESOFSWBDevelopmentsinSWBresearchrapidlyincreasingunderstandingofthecorrelatesanddeterminants

ofSWBand

8/6/2019 Van Hoorn, 2009

134/280

continuousimprovementofthemeasuresusedhavesparked

a

16Asaverycrudeillustrationofwhatmight

actuallybepossibleatsomepoint,takeascalerunningfrom1,dissatisfied

to10,satisfied(seeSection3).PeoplefromcountryXreportinga9onthisscalemayhaveanaveragebrainactivitylevelof100

whiletheaverage

8/6/2019 Van Hoorn, 2009

135/280

brainactivitylevelofpeoplefromcountry

Ywiththesamescore(9)is110.Viceversa,peoplewith

abrainactivitylevelof100incountryXonaveragereporta

9onthedissatisfied-satisfiedscalewhileincountryYpeoplewiththisbrainactivitylevel(100)onaveragereportan8onthesame

scale.

8/6/2019 Van Hoorn, 2009

136/280

8/6/2019 Van Hoorn, 2009

137/280

smallliteraturediscussingandexploringpossible

usesofSWBinpolicymaking(e.g.DienerandSuh,1997;Diener

etal.,2008;DolanandWhite,2007;Layard,2005;Veenhoven,2002).Tosome

extent,suggestedpolicyusesfollowquitenaturallyfromtheconclusionthatmeasuresofSWBcontainmeaningfulinformation.IfSWBmatters,perhapsbecauseitpredictslongevity

(Danneretal.,

8/6/2019 Van Hoorn, 2009

138/280

2001),appearstofostergoodoutcomesin

severalareasoflife(Lyubomirskyetal.,2005)orbecauseitcorrelates

withlevelsofhypertensionacrosscountries(BlanchflowerandOswald,2008),itdoesnot

requireastrongleapoffaithtoviewpromotingSWBasalegitimatepolicyaim.17

SWBcanbeusefullyappliedinpublicpolicy

makingalsowithout

8/6/2019 Van Hoorn, 2009

139/280

itbeinganexplicitgoal(cf.Dolan

andWhite,2007).BecauseSWBmattershigherlevelsofSWBaregenerallypreferred

overlowerlevelsofSWBithasthepossibilitytogivepolicymakersrelevant

informationabouttheeffectsoftheirpolicies.Governmentscanassesstheirpoliciesorbasetheirdecisionsbetweenalternativecoursesofactiononthe(expected)effect

oftheiractions

8/6/2019 Van Hoorn, 2009

140/280

onthelevelofSWB.Prominentmanifestations

ofthistypeofpolicyuseofSWBareproposalsfornational

indexesofSWB(Diener,2000;DienerandSeligman,2004;Kahnemanetal.,2004a),

whichallaimtoprovidegovernmentswithrelevantinformationnotcapturedornotfullycapturedbyexisting(objective)statistics.Ontopofthis,inthe

fieldseveralless

8/6/2019 Van Hoorn, 2009

141/280

obviouspolicyapplicationsofSWBhavebeen

developed.Notably,measuringSWBcanhelpshedlightonsomehiddencosts

suchasthoseofenvironmentalexternalitiesandterrorismorhelptacklesomeof

theproblemsassociatedwiththemeasurementofpoverty(relativevs.absolute)andhouseholdequivalencescales.

BelowthesedifferentpolicyusesSWBasapolicy

goal,SWBas

8/6/2019 Van Hoorn, 2009

142/280

acomplementtoexistingmeasuresofwell-being,

SWBasameasuringrodincost-benefitanalysesandtheuseof

SWBintheconstructionofpovertystatisticsandequivalencescalesarediscussedoneby

one.ThereisnostrictlinedividingallpossibleapplicationsofSWBinthemakingofpublicpolicy,butthistaxonomybringsatleastsome

ordertothe

8/6/2019 Van Hoorn, 2009

143/280

diversepolicyusesSWBcanandmight

have.18

17Famously,Bhutanhasdeclaredgrossnationalhappinessas

itsoverarchingpolicygoal.Inthisuse,happinessappearstobemoreabout

thephilosophicalconceptandnotsomuchabouttheSWBconstruct,however.18ThisoverviewislimitedtoapplicationofmeasuresofSWBandSWB

researchinpublic

8/6/2019 Van Hoorn, 2009

144/280

policy,whichisoftenratherabstract.Many

psychologistsandpsychiatristsareapplyingSWBresearcheverydayandthesameholds

formanypeopleworkinginmedicine.

21

8/6/2019 Van Hoorn, 2009

145/280

5.1SWBasapolicygoal

5.1.1ImprovingSWB:Whyandhow?Tohavewell-beingasapolicy

goalishardlycontroversial.Shovingasidethedebateofwhatconstituteswell-being,well-being

itselfisgoodifitwerenotintrinsicallygood,itprobablywouldnotbecalledwell-being.TohavepromotingSWBasanaimforpublicpolicy

ismuchless

8/6/2019 Van Hoorn, 2009

146/280

tautological.Thebasicargumentinfavourof

SWBasapolicygoalisthatitcapturessomethingthat,again,

isintrinsicallygood.Whowouldnotliketoexperiencefrequentpositiveemotions,a

minimalamountofnegativeemotions,and/orleadameaningfullife?Ceterisparibusmostpeopleverylikelywouldindeedpreferalifefilledwithpositiveaffect

overalife

8/6/2019 Van Hoorn, 2009

147/280

filledwithnegativeaffect(cf.Kingand

Napa,1998;Dieneretal.,1998;DienerandOishi,2004).19

Inreallife,thesituationisabitmorecomplicated,however.Firstly,there

iswidespreadscepticismconcerningtheextenttowhichmeasuresofSWBindeedcapturesomethingmeaningfullikedesirablementalstates.Evenwhenweacceptthatcertain

mentalstatesare

8/6/2019 Van Hoorn, 2009

148/280

preferredoverothers,somedoubtthatmeasures

ofSWBareabletotellusanythingaboutthesestates.In

firstinstance,suchscepticismwouldappeartorequirefurtherassessmentofthevalidity

andreliabilityofmeasuresofSWB,inparticulardelvingmoredeeplyinSWBsbiophysicalandneuroanatomicalcorrelates.Increasingly,however,SWBasapolicygoalis

defendedonthe

8/6/2019 Van Hoorn, 2009

149/280

groundsthatevencurrentindicatorswiththeir

drawbacksareabletopredictgoodoutcomes.Inthisview,policiesaiming

toincreaseSWBmakesensebecausetheycanhelppromotelongevity,healthet

cetera.

Secondly,animportantcomplicatingfactoristhesimplepracticalityofhowtogoaboutincreasinglevelsofSWB.Atagenerallevel,

therearemany

8/6/2019 Van Hoorn, 2009

150/280

factorsassociatedwithSWBonwhichgovernments

canexertatleastsomeinfluence.Itgoestofartodiscuss

allfactorsthatmightcontributetoSWBoratleastfacilitatetheachievement

ofhigherlevels,butdemocracy,freedomandqualityofgovernanceareallpositivelyrelatedtoaveragelevelsofSWB(e.g.Veenhoven,2008).Theseconceptsare

ratherabstract,however,

8/6/2019 Van Hoorn, 2009

151/280

8/6/2019 Van Hoorn, 2009

152/280

detachedfromconcretecoursesofaction

governmentscanpossiblytaketofosterSWB.Theobviousexampleofa

concretepolicyistoincreaseexpenditureonmentalhealthcare,whichislogically

expectedtohavehighSWBpay-offs(though,ofcourse,itdetractsfromotherpossiblecauses;seebelow).Withintherealmofconcretegovernmentpolicies,the

mostlyhotlydebated

8/6/2019 Van Hoorn, 2009

153/280

policyinstrumentintheSWBliteratureis

thatoftaxation.Becauseitissohotlydebated,itservesas

ausefulcasestudytoseehowunderstandingofSWBanditsdeterminants

canhelpformulatepolicies,inparticularthoseaimedatfosteringSWB.

5.1.2TaxationandSWB:AcasestudyIneconomics,thewelfareconsequences

ofgovernmentpolicies,

8/6/2019 Van Hoorn, 2009

154/280

andtaxesinparticular,aretypicallyassessed

bylookingathowtheyaffectpeopleschoicestheso-calledbehaviouristapproach.Indeed,

manylargemacroeconomicmodelscontainasmallsetofcorebehaviouralequationson

whichanalysesofthecostsandbenefitsofpolicyalternativesarebased.SWBdataandresearchcanaddavaluableperspectivetothisstandardbehaviourist

approachtothe

8/6/2019 Van Hoorn, 2009

155/280

studyofthewelfareeffectsofa

policy(cf.Hollnder,2001;GruberandMullainathan,2005),notleastwhereit

concernsthewelfareeffectsoftaxation.

TheinterestofSWBresearchers

inhowtaxesmightbeusedtopromoteSWBseemslargelydrivenbyoneofthemoststrikingandrobustresultsintheliteratureon

thedeterminantsof

8/6/2019 Van Hoorn, 2009

156/280

SWB.Empiricalanalysesconsistentlyshowthatnot

onlytheabsolutelevelofincomemattersbutthatrelativeincome,i.e.

howonesincomecompareswiththatofothers,isalsoanimportantdeterminant

ofSWB(e.g.Easterlin,1974;Dieneretal.,1993;ClarkandOswald,1996;McBride,2001;seeClarketal.,2008foranoverview).Simplyput,

SWBdoesnot

8/6/2019 Van Hoorn, 2009

157/280

generallyincreaseaseverybodysincomeincreases(cf.

Easterlin1995),and,whatismore,income(orconsumption)isassociatedwith

significantnegativeexternalities.AsLuttmer(2005)finds,SWBisnegativelyaffectedbythe

levelofincomeofonesneighbours,eventotheextentthatagiven-sizedincreaseofaneighboursincomehasthesamenegativeeffectonones

SWBasa

8/6/2019 Van Hoorn, 2009

158/280

similarly-sizeddecreaseinonesownincome.

Resultsliketheseontheimportanceofrelativeincomeandnegative

(consumption)externalitiesbringimportantnewinsighttothereigningunderstandingofthewelfare

consequencesoftaxation.Inparticular,authorslikeLayard(2005),followinghisearlierworkonthisissue(Layard,1980),taketheevidenceontheeffectof

relativeincomeon

8/6/2019 Van Hoorn, 2009

159/280

SWBtoarguethat(increased)taxationof

labourincomecanincreasewelfarewhereasthecommonwisdomdictatesthatsuchtaxation

leadstodeadweightlossesandtherebylowerswelfare.

23

8/6/2019 Van Hoorn, 2009

160/280

Theoretically,theideaisthatbecause

thereisanexternalitymuchlikepollution,thistaxwillenhanceefficiencyby

makingthepollutingactivity,i.e.workingforanincome,lessattractiveinfavour

ofthenon-pollutingactivity,whichistoenjoyleisure.Ratherthanintroducedistortionsanddeadweightlosses,thistaxwillimprovewelfare,atleastwhenone

analysesitswelfare

8/6/2019 Van Hoorn, 2009

161/280

consequencesintermsofSWB.

Theargumentonhow(carefullydesigned)taxesmaybeusedtoincrease

levelsofSWBisthemostclearlyarticulatedpolicysuggestionarisingfromSWB

research.ButitisnotsomethingthatoriginatesstrictlyformSWBresearch.BeforetheuseofSWBindicatorstomeasurewelfarebecamewidespread,alarge

theoreticalliteraturealready

8/6/2019 Van Hoorn, 2009

162/280

scrutinisedthepolicyimplicationsofautility

functionwithrelativeincomeeffects;whatdoesitmeanforoptimaltaxation

andpoliciesaimingtomaximizewelfareifpeoplecarenotjustaboutabsolute

butaboutrelativeincomeorconsumptiontoo?BoskinandSheshinski(1978),forinstance,findthattheoptimallevelofincomeguaranteesandmarginaltaxrates

increasesasrelative

8/6/2019 Van Hoorn, 2009

163/280

consumptionbecomesmoreimportantinpeoplesutility

function.Similarly,Ng(1987)analysestheimplicationsofrelativeincomeeffectson

theoptimallevelofpublicgoodsprovision.Althoughthislevelneednotbe

toolowwhenrelativeincomeisincludedintheutilityfunction,thevalueofpublicexpendituresislikelyunderestimatedaspeopledonottakeinto

accountitsbenefits

8/6/2019 Van Hoorn, 2009

164/280

thatarereceivedindirectlythroughthelowering

ofprivateexpendituresandthelimitingofrelativeincomeeffects.

GoingbeyondtaxesasanSWB-promotingpolicyinstrument,thereisanimportantgeneral

lessontobelearnedfromtheabovediscussionoftaxationanditspossibleroleinimprovingSWB.Ofcourse,SWBresearchisveryimportantin

guidingpolicymakers

8/6/2019 Van Hoorn, 2009

165/280

thataimtoimprovelevelsofSWB.

Atthesametime,thevalueofthisresearchisnotlimited

tosuggestinghowaconcretepolicymeasure(suchasatax)maybe

usedtoenhanceSWBscores.Moreindirectly,itcanalsoaddanimportantperspectivetoexistinganalysesandestablishedwisdom.Byshowingthatrelativeincome

indeedmatters,SWB

8/6/2019 Van Hoorn, 2009

166/280

researchhasshown,forexample,thattheoretical

analyseslikethoseofBoskinandSheshinski(1978)andNg(1987)can

berelevantinreal-lifepolicysituations.Inthissense,SWBresearchcanhelp

uncoverareasinwhichcertainpolicies,theoreticallythoughttobeabletoaffectwelfare,mayindeedcontributetowell-beinginwaysnotpreviouslythoughtrealistic

orfeasible.

8/6/2019 Van Hoorn, 2009

167/280

5.2Towardsamorecomprehensiveaccount

ofwell-being24

8/6/2019 Van Hoorn, 2009

168/280

SWBindicatorsareoftenputforward

asusefulcomplementstoexistingmeasuresofhowwelllifeisgoing.

Underlyingthisobservationisthegrowingrecognitionthat,thoughinsightful,therelikelyis

moretowell-beingthanobjectivemeasuresaloneorincombinationareabletocapture.

Aprominentexampleofanareainwhichobjectiveindicatorsgo

onlysofar

8/6/2019 Van Hoorn, 2009

169/280

ingivingrelevantandmeaningfulinformationis

theissueoftrust.Whetherpeoplethinktheycantrusttheirfellowman

or-woman,orwhethertheyexpecttobestabbedinthebackat

everypossibleoccasioncertainlyisanimportantfeatureofanysociety.Inaddition,itisnotclearwhetherobjectiveindicatorscangiveanaccurateand

meaningfulaccountof

8/6/2019 Van Hoorn, 2009

170/280

theleveloftrustinacountry.

Forinstance,thenumberoffraudcasesbroughtbeforeacourtper

capitaperyearmighttellussomethingabouttrust,butfewwouldargue

thatthisnumbercapturestheessenceoftheconcept.Whatismore,asubjectiveindicator,cleverlyaskingpeoplehowmuchtheytrustothers,willvery

likelyaddinsight

8/6/2019 Van Hoorn, 2009

171/280

toexistingobjectivestatisticsonthisaspect

ofasociety.

Concerningwell-being,thecentraltenetofSWB

researchisthatthestudyofwell-beingcannotgetaroundmeasuringpeoples

cognitiveandaffectivereactionstolifeaswholeorspecificdomainsthereof(DienerandSuh,1997:p.200;seealsoDieneretal.,2008and

Veenhoven,2002).Most

8/6/2019 Van Hoorn, 2009

172/280

significantly,theargumentisthatSWBis

abletocapturespeopleactualexperienceinadirectmanner,whileeconomic,

socialandenvironmentalindicatorsdosoonlyindirectly(DienerandSuh,1997:p.

205).Thismattersbecausewhatisexperienceddoesnothavetocoincidewithobjectiveconditions,andindeedalargedeviationcanoftenbeobserved.Crime

ratescanbe

8/6/2019 Van Hoorn, 2009

173/280

low(relativelyspeaking)butatthesame

timepeoplemightbeafraidtowanderthroughthestreetsaloneat

night;orpeoplemaybewell-educated,butnonethelessfeeltheyjustdonot

understandtheworldinwhichtheylive.Infact,itisoftenarguedSWBindicatorsareusefulcomplementstoobjectiveindicatorspreciselybecausethereis

adivergencebetween

8/6/2019 Van Hoorn, 2009

174/280

whatpeople(reportedly)experienceandwithwhat

iscapturedinthe(existing)objectiveindicators(see,inparticular,Dienerand

Seligman,2004:pp.2-3).Thatis,suchdivergenceisanobviousrequirementfor

SWBtocontributetoamorecomprehensivepictureofwell-beingifitcorrelatedperfectlywithobjectiveindicators,itwouldnotaddanything.

Followingthe

abovereasoning,and

8/6/2019 Van Hoorn, 2009

175/280

buildingonthemethodsformeasuringSWB

discussedinSection3,researchersinthefieldhavegiventheidea

ofnationalSWBstatisticsseriousconsideration.Togivebutoneexample,Diener(2000:

p.40)proposestoapply

25

8/6/2019 Van Hoorn, 2009

176/280

ExperienceSamplingtoanationallyrepresentative

sampleofrespondents(seealsoDienerandSeligman,2004;Kahnemanetal.,

2004a).SWBwouldberecordedforacross-sectioncomprisingdifferentagegroups,geographical

regions,occupationalcategoriesandincomelevels.Tomaximisetheusefulness,reliabilityandvalidityofSWBthusmeasured,theactualsurveyitemswouldtargetallcomponents

ofSWB,the

8/6/2019 Van Hoorn, 2009

177/280

affectivecomponent(thepresenceofpositiveaffect

andtheabsenceofnegativeaffect)andthecognitivecomponent,andcould

useforinstanceaPANASscale.Inaddition,otherconstructsdeemedtocapture

importantaspectsofthequalityoflifeandnotcapturedinobjectivemeasuredcouldbeincluded,forinstancestressandtrust.

Ata

conceptuallevel,a

8/6/2019 Van Hoorn, 2009

178/280

generallyacceptedsetofguidelinesforthe

constructionofnationalSWBstatisticsisavailable(Diener,2006).Atapractical

level,thereisalsoagreementaboutthemethodforcollectingtheself-reports,ESM

orDRM,quitepossiblyinsomecombination,seemsthemostsuitablewaytoorganisetheeffort(Diener,2006:p.402).Howsubsequentlybesttocarry

outtheactual

8/6/2019 Van Hoorn, 2009

179/280

collectionofthedataisstillan

openissue,however.Thousandsofpeoplecompletingtenrandomlytimedquestionnaireson

theirpalmtopeachdaycomplementedwithfrequentbloodpressureandotherphysiologicaltests

maybethemostrigorousapproach,butdoesnotseemfeasible.Inparticular,itwouldbeprohibitivelyexpensive,andgettingarepresentativesampletosubject

tothistesting

8/6/2019 Van Hoorn, 2009

180/280

foraconsiderableamountoftime(say

ayear)wouldprobablybenexttoimpossible.Hence,intheconstruction

ofanationalindexofSWBthereisanimportanttradeoffbetween

rigorandfeasibility,andhowbesttodealwiththisissueisanimportantchallengeforSWB-basedcomplementstoexistingmeasuresofwell-beingandaspects

thereof.

8/6/2019 Van Hoorn, 2009

181/280

5.3Subjectivewell-beingasameasuringrod

Anessentialaspectinformulatingpolicyistoassessthecostsand

benefitsofalternativecoursesofaction(includingdoingnothing).Thoughstraightforwardinprinciple,

practicalitiesoftenlimittheusefulnessandapplicabilityofformalcost-benefitanalyseswherepolicyalternativesarecomparedintermsofasinglemonetarymetric.Inmany

policyareas,public

8/6/2019 Van Hoorn, 2009

182/280

goodsandexternalitiesbeingtheonesmost

familiartoeconomists,thereisjustnowayofputtingaprice

tagontherelevantdimensionsofthedifferentoptionsavailable.In

26

8/6/2019 Van Hoorn, 2009

183/280

somecases,however,SWBcanprovide

awaytocircumventtheproblemofmissingprices.20Theeffectsof

publicgoods,externalities,policyactionsor,infact,anyothervaluationproblema

governmentwantstoaddress,areevaluatedintermsoftheircontributionnegativeorpositivetoSWB.ValuationexercisesthatuseSWBgenerallytaketwosteps:first

thevaluationproblem

8/6/2019 Van Hoorn, 2009

184/280

isreducedtoitscontributiontoSWB,

andsecondthiscontributioniscomparedwiththeroleincomeplaysin

SWB.21Specifically,thesecondstepconsistsofcalculatingbyhowmuchthelevel

ofincomewouldhavetochangetooffsetexactlytheSWB-effectofthepublicgood,theexternalityorthepolicyalternative.Thefourcasestudies

discussedbelowall

8/6/2019 Van Hoorn, 2009

185/280

takethisapproach,inwhichmoneyremains

theultimatemeasuringrod(cf.Pigou,1952)butwheretheuseof

SWBindicatorshelpsextendtherangeofvaluationproblemsthegovernmentisable

toaddressbyformalcost-benefitanalysis.

ThefirstexampleisvanPraagandBaarsmas(2005)studyofthecostsofnoisenuisancearound

AmsterdamSchipholairport.

8/6/2019 Van Hoorn, 2009

186/280

Theycombineatraditionalapproachtovaluing

thenoisenuisancefromtheairportwiththeuseofSWBdata.

Ordinarily,ahedonicregressionanalysisofhousepricesisusedtocalculatethe

shadowcostsofnoisenuisance.Thehedonicapproachtovaluingsuchanintangibleispronetoleavesomeresidualcosts,however,andthesecanbe

valuedusingSWB

8/6/2019 Van Hoorn, 2009

187/280

ratings.Themethodthusdevelopedisparticularly

usefulwhenforsomereason,notablymarketimperfections,pricedifferencesdonot

fullycapturethecostsorbenefitsofanexternality.

Welsch(2006)

usesSWBdatatocircumventtheproblemofmissingpricesinenvironmentalvaluation.Specifically,heusespaneldataontenEuropeancountriestoanalysethe

effectofair

8/6/2019 Van Hoorn, 2009

188/280

pollutiononSWB.Controllingforincome,he

findsthatdifferencesinSWB,bothbetweencountriesandwithincountriesover

timecanpartiallybeattributedtoenvironmentalquality.Theimprovementinairquality

overtheperiod1990-1997isvaluedatroughly$750percapitaperyearinthecaseofnitrogendioxideandabout$1400percapitaper

yearinthe

8/6/2019 Van Hoorn, 2009

189/280

caseoflead(averagedoverallcountries).

RelyingonSWBdata,Freyetal.(2007)areable

toexpandthedimensionsoflifetowhichvaluationtechniqueshavebeenapplied

andassessthecostsofterrorism.Thecase

20Betterknown,contingentvaluationprovidesafurtherapproachtosolvingtheproblemofmissing

prices(seethe

8/6/2019 Van Hoorn, 2009

190/280

symposiumintheFall1994editionof

theJournalofEconomicPerspectivesforathoroughintroduction).21SeeKahneman

andSugden(2005)foradiscussionofSWBasthedirectunitof

valueincomparingpolicyalternatives.

27

8/6/2019 Van Hoorn, 2009

191/280

concernstheRepublicofIreland,during

theperiod1970-1999.ThestudyusesdatafromtheEurobarometersurveyand

intheanalysisdifferencesinreportedlifesatisfactionareexplainedfromlevelsof

terrorism,householdincomeandotherpersonalcharacteristics.Theirfindingsrevealthatpeople,onaverage,wouldbewillingtogiveupsome41%oftheirincome

tohavethe

8/6/2019 Van Hoorn, 2009

192/280

levelofterrorismreducedtothelevel

prevailinginmorepeacefulpartsofthecountry.

Finally,Oswald

andPowdthavee(2007)proposeamethodofusingSWBdatatocalculatecompensatory

claimsintortcases,notablybereavement.Theideaisthattheemotionaldamagetheperpetratorinflictedonthevictimwillbeexactlyoffsetbythe

positivewell-beingeffect

8/6/2019 Van Hoorn, 2009

193/280

ofamonetarysettlement.22Atypicalamount

forsuchhedoniccompensationiscalculatedat100,000orroughly$200,000.

5.4PovertymeasuresandhouseholdequivalencescalesThoughmuchdiscussed,povertyis

actuallyquitedifficulttomeasureandmanydifferentapproachesexist(cf.CitroandMichael,1995;seealsoFoster,1998).Particularlychallengingisthatpovertyappears

tohavean

8/6/2019 Van Hoorn, 2009

194/280

importantrelativecomponent.NotablyAdamSmith(1776:

p.1103)alreadyobservedthat:Alinenshirt,forexample,

is,strictlyspeaking,notanecessaryoflife.TheGreeksandRomanslived,

Isuppose,verycomfortablythoughtheyhadnolinen.Butinthepresenttimes,throughthegreaterpartofEurope,acreditableday-labourerwouldbe

ashamedtoappear

8/6/2019 Van Hoorn, 2009

195/280

inpublicwithoutalinenshirt,the

wantofwhichwouldbesupposedtodenotethatdisgracefuldegreeof

povertywhich,itispresumed,nobodycanwellfallintowithoutextremebad

conduct.Custom,inthesamemanner,hasrenderedleathershoesanecessaryoflifeinEngland.Thepoorestcreditableperson,ofeithersex,wouldbe

ashamedtoappear

8/6/2019 Van Hoorn, 2009

196/280

inpublicwithoutthem.

The

relativeelementsofpovertycanbetakenintoaccountwithSWBdata

inanapproachpioneeredover30yearsagobyBernardvanPraagand

subsequentcollaborators(seevanPraagandFrijters,1999foranoverview).Forhisapproach,vanPraagusedthesubjective,survey-basedapproachtomeasurewhatis

referredtoas

8/6/2019 Van Hoorn, 2009

197/280

theutilityofincome(vanPraag

22Thecorrespondinglegalprincipleiscalledrestitutioinintegrum,which

literallymeansrestorationtooriginalcondition(OswaldandPowdthavee,2007:p.1).

28

8/6/2019 Van Hoorn, 2009

198/280

andFrijters,1999:p.417).Many

variationsarepossible,butatthebasiclevelheasked(p.418):

Whilekeepingpricesconstant,whatafter-taxtotalmonthlyincomewouldyou

considerforyourfamilytobe:

Verybad$________Bad$________Insufficient$________Sufficient$________Good$________Verygood$________

This

istheso-called

8/6/2019 Van Hoorn, 2009

199/280

IncomeEvaluationQuestionorIEQ.Useand

analysisoftheIEQhasproducedtwomainfindings.First,theutility

functionofincomeisfoundtodifferoverpeople.Second,subsequenttestingshowed

thattheobserveddifferencesarerelatedtoobjectivelyobservablecharacteristicsofrespondents.Inparticular,incomeactuallyearnedisaverysignificantfactorintheutility

functionofincome.

8/6/2019 Van Hoorn, 2009

200/280

Simplyput,apersonearning$40,000typically

thinks$100,000isaverygoodincome,whileapersonactuallyearning

$100,000thinks$200,000wouldqualifyasaverygoodincome;andtheopposite

holdsaswell,someonewitha$40,000incomeusuallythinksa$20,000incomeisworsethandoesapersonactuallyearning$20,000(vanPraagand

Frijters,1999:p.

8/6/2019 Van Hoorn, 2009

201/280

423).

Agovernment,orin

fact,anybodywhomightbeinterestedindefiningpovertyina(partially)

relativewaycanfollowtheapproachcapturedintheIEQ.Thepovertyline

couldbedrawnattheaverageincomedeemedverybadbythemedianhousehold,forinstance,butcountlessdefinitionsareimaginable.Theinterestingandvery

usefulfeatureof

8/6/2019 Van Hoorn, 2009

202/280

suchadefinitionisthatno(frequent)

redefinitionisneededandthattherelativeaspectsofpovertyareautomatically

accountedfor.Whatisconsideredaverybadincomeevolveswiththedevelopment

ofaverageearningsof,say,themedianhousehold.Changesthereinincreasesintimesofeconomicgrowthanddecreasesduringeconomicdownturnsaredirectlyreflectedinthepoverty

line,andultimately

8/6/2019 Van Hoorn, 2009

203/280

thepovertystatistics.

Usesof

theIEQinpublicpolicydonotstopatmeasuresof(relative)

poverty,butstraightforwardlyextendtotheconstructionofhouseholdcostfunctionsand/orequivalence

29

8/6/2019 Van Hoorn, 2009

204/280

scales(seevanPraagandvan

derSar,1988).Howtheneedsofhouseholdschangewiththeirsize,

i.e.thenumberofhouseholdmembers,isalong-standingquestionineconomicsand

animportantpolicyissue.Theideaisthatthetotalcostsofneedsincreasewitheachadditionalmember,butnotinaproportionalway;there

areeconomiesof

8/6/2019 Van Hoorn, 2009

205/280

scalesothattheneedforhousing

space,electricity,etceterawillnotbetwiceashighfora

two-personhouseholdasitisforasingle-personhousehold.Intermsofthe

IEQ,besidesincome,householdsizeisasecondimportantfactorinobservedutilityfunctionsofincome.Keepingotherpersonalcircumstancesconstant,largerhouseholdsareless

satisfiedwithany

8/6/2019 Van Hoorn, 2009

206/280

givenlevelofincome.Knowingthesize

ofthedissatisfactionforhouseholdsofdifferentsizessubsequentlygivesanidea

oftheextenttowhichhouseholdsneedsincreasewiththeirsize,aidingthe

constructionofsuitableequivalencescales.

6.SUMMARIZINGREMARKSHappiness,pleasure,joy,thegoodlifeandrelatednotionshavebeenandcontinuetobe

thesubjectof

8/6/2019 Van Hoorn, 2009

207/280

muchdebate.Startinginthesecondhalf

ofthe20thcentury,thislong-standingdebatehasreceivedanimportantimpetus.

Atthatpoint,psychologists,traditionallyconcernedwithnegativeemotionsandfeelings,slowlybecame

interestedinpositiveaspectsoflife,forinstanceinpeoplefeelinghappyratherthanmiserableorbeingsatisfiedwiththeirliferatherthandissatisfied.This

researchprogrammewas

8/6/2019 Van Hoorn, 2009

208/280

highlyempiricalanddevelopednewindicatorsto

measurehowwellindividualsthemselvesfeeltheirlifeisgoing.Thegeneral

constructthatcameoutoftheireffortsisbestreferredtoassubjective

well-being(SWB).SWB,inturn,referstoabroadsetofphenomenathatincludespositiveemotion,engagement,satisfactionandmeaning.Thekeyfeatureofmeasures

ofSWBis

8/6/2019 Van Hoorn, 2009

209/280

thattheyrelyentirelyoninherentlysubjective

self-appraisalsandmakenoreferraltoobjectivecircumstances.

SWBis

asurvey-basedmeasureobtainedbysimplyaskingpeopletoanswercertainquestions,and

thereforeissusceptibletotheproblemssurveydatacantypicallyhave.Indeed,acommonfindingisthatcontextualfactors,rangingfromtheorderofquestions

toweatherconditions,

8/6/2019 Van Hoorn, 2009

210/280

affectreportedSWBlevels.Ontheseand

othergrounds,thevalidityandreliabilityofindicatorsofSWB,ormore

generaltheirabilitytoconveyinformationthatismeaningful,ismuchchallenged.For

SWBthisappearstoholdevenmorethanformostothervariablesmeasuredthroughtheuseofquestionnaires.Afterall,itisnotevidentwhat

oneis

8/6/2019 Van Hoorn, 2009

211/280

30

8/6/2019 Van Hoorn, 2009

212/280

measuringwhenaskingsomebodytakingall

thingstogether,wouldyousayyouareandthengivingfourresponse

categoriestochoosefrom(veryhappy,quitehappy,notveryhappyornot

atallhappy).Atthecore,thisquestionsimplyaskspeopletoputalabelontheirlife.Thereisnorationaleforaskingthis

questionwiththese

8/6/2019 Van Hoorn, 2009

213/280

specificresponsecategoriesotherthantheexpectation

thattheresultingmeasurewillbemeaningful.Thisisanoutstandingfeature

oftheconceptofSWB:itappearslargelyconceptualisedthroughthespecificindicators

usedtomeasureit,i.e.bythespecificquestionsasked.

Consideringallthis,itmightbesurprisingtofindthatmeasuresofSWB

areactuallyquite

8/6/2019 Van Hoorn, 2009

214/280

abletocapturesomethingimportantanduseful.

Asthereviewinthispapershows,amidstalltheirweaknesses,indicators

ofSWBdoprovideimportantandusefulinformationonhowwellpeopleor

asocietyasawholearedoing.EvenifthemeasuredlevelofSWBindeedisjustasimplelabelpeopleputontheirlife

whenaskedupon,

8/6/2019 Van Hoorn, 2009

215/280

itappearstomatterforabroad

classofphenomena.Itcorrelateswithmanyfactorsgenerallyconsideredimportantfor

well-being,e.g.health,incomeandgoodrelationships,andpredictsgoodoutcomesinmany

oftheseareas.Inaddition,ithasbiologicalcorrelates,notablySWBisassociatedwithpatternsofbrainactivityandbloodpressurelevels.

Interestingly,

measurementinthe

8/6/2019 Van Hoorn, 2009

216/280

fieldofSWBisadvancingrapidly.Single-item

scalesdoreasonablywellintermsofreliabilityandvaliditybutmulti-item

scalesalreadyleadtomuchimprovement.Recentlydevelopedmeasurementtechniquessuchasthe

ExperienceSamplingMethod(ESM)ortheDayReconstructionMethod(DRM)holdgreatpromiseforleadingtoevermoremeaningfulmeasures.Thoughseveraloftheproblems

withSWBmeasuresor

8/6/2019 Van Hoorn, 2009

217/280

subjectiveindicatorsingeneralseeminsoluble,itis

cleartheindicatorscanbeimprovedupon.Alreadyaninterestingandmeaningful

indicator,reportedlevelsofSWBwillincreasinglybeabletogiveimportantinsight

onhowwellpeopleandsocietiesasawholearedoing.

Withreliabilityandvalidityestablished,applicationofSWBdataandSWBresearch

inpolicymaking

8/6/2019 Van Hoorn, 2009

218/280

followsquitenaturally.Manydifferentapplicationsseem

possiblebutmostprominentlySWB,i.e.increasingitslevel,canitselfbe

apolicygoal,notleastbecausehighlevelsofSWBappeartopredict

goodoutcomessuchaslongevity.BeyondthegoalofimprovingSWB,indicatorsofSWBcanbeusedmoregenerallyinformulatingandevaluatingpolicy.In

particular,SWBdata

8/6/2019 Van Hoorn, 2009

219/280

cangivepublicpolicymakersrelevantinformation

aboutthecostsandbenefitsoftheirpoliciesandbeusedto

assesstheeffectsofalternativecoursesofaction.Aninterestingapplicationisthe

useofSWBindicatorsinthevaluationof

31

8/6/2019 Van Hoorn, 2009

220/280

environmentalexternalitiessuchasnoisenuisance

andairpollution.AlthoughSWBisnotwidelyappliedinshapingand

appraisingpolicy,itisclearthatpolicymakersmayfindmeasuringSWBuseful.

Whatismore,asSWBresearchadvances,notleastintermsofthemethodsbywhichtheSWBconstructisgivenempiricalcontent,itsusefulness

forpublicpolicy

8/6/2019 Van Hoorn, 2009

221/280

makingissettoimprovefurther.

Aswithallsocietalindicators,importantcaveatsapplytoSWBindicators

andtheiruseinformulatingpublicpolicyaswell,andoneofthese

deservesexplicitmentioning.SWBresearchormeasuresofSWBdonotprovideapolicyrecipe.Althoughweareunawareofanyindicatorforwhichchanges,

up,downor

8/6/2019 Van Hoorn, 2009

222/280

lackthereof,docomewithstraight-cutpolicy

advice,thispointiswellemphasised.ThustheSWBliteraturemayultimately

haveaneffectonwhatgovernmentsdoordonotdo,andhow

theydoit,butthefielditselfonlyhandsthetoolsandinsights,notaroadmap.

REFERENCES

Alesina,Alberto,RafaelDi

TellaandRobert

8/6/2019 Van Hoorn, 2009

223/280

MacCulloch(2004).Inequalityandhappiness:AreEuropeans

andAmericansdifferent?JournalofPublicEconomics,88(9-10),2009-2042.

Andrews,FrankM.(1984).ConstructValidityandErrorComponentsofSurveyMeasures:A

StructuralModelingApproach.PublicOpinionQuarterly,48(2),409-442.Andrews,FrankM.andRickCrandall(1976).Thevalidityofmeasuresofself-reported

well-being.

SocialIndicatorsResearch,

8/6/2019 Van Hoorn, 2009

224/280

3(1),1-19.Andrews,FrankM.and

StephenB.Withey(1976).Socialindicatorsofwell-being.NewYork/London:

PlenumPress.Angner,Erik(2005).Subjectivemeasuresofwell-being:Aphilosophicalexamination.PhD

dissertation,UniversityofPittsburgh.

Argyle,Michael(1999).CausesandCorrelatesofHappiness.In:DanielKahneman,EdDienerandNorbertSchwarz(eds.)Well-Being:The

FoundationsofHedonic

8/6/2019 Van Hoorn, 2009

225/280

Psychology.NewYork:RussellSageFoundation,353-373.

Bertrand,MarianneandSendhilMullainathan(2001).DoPeopleMeanWhat

TheySay?ImplicationsforSubjectiveSurveyData.AmericanEconomicReview,PapersandProceedings,

91(2),67-72.

32

8/6/2019 Van Hoorn, 2009

226/280

Blackburn,Simon(1996).happiness.In:The

OxfordDictionaryofPhilosophy.OxfordUniversityPress:OxfordReferenceOnline.

Blanchflower,DavidG.andAndrewJ.Oswald(2004).Well-beingovertimeinBritain

andtheUSA.JournalofPublicEconomics,88(7-8),1359-1386.

Blanchflower,DavidG.andAndrewJ.Oswald(2008).Hypertensionandhappinessacrossnations.

JournalofHealth

8/6/2019 Van Hoorn, 2009

227/280

Economics,27(2),218-233.

Boskin,

MichaelJ.andEytanSheshinski(1978).Optimalredistributivetaxationwhenindividualwelfare

dependsuponrelativeincome.QuarterlyJournalofEconomics,92(November),589-600.

Boulding,KennethE.(1972).HumanBettermentandtheQualityofLife.In:BurkhardStrumpel,JamesN.MorganandErnestZahn(eds.)HumanBehaviorinEconomic

Affairs:Essaysin

8/6/2019 Van Hoorn, 2009

228/280

honorofGeorgeKatona.Amsterdam:Elsevier,455-470.

Camerer,Colin,GeorgeLoewensteinandDrazenPrelec(2005).Neuroeconomics:How

NeuroscienceCanInformEconomics.JournalofEconomicLiterature,XLIII(March),9-64.

Campbell,Angus,PhilipE.ConverseandWillardL.Rodgers(1976).TheQualityofAmericanLife.NewYork:RussellSageFoundation.

Citro,ConstanceF.,

andRobertT.

8/6/2019 Van Hoorn, 2009

229/280

Michael,eds.(1995).MeasuringPoverty:ANew

Approach.PanelonPovertyandFamilyAssistance:Concepts,InformationNeeds,andMeasurement

Methods,NationalResearchCouncil,Washington,DC:NationalAcademyPress.

Clark,Andrew

E.andAndrewJ.Oswald(1996).Satisfactionandcomparisonincome.JournalofPublicEconomics,61(3),359-381.

Clark,AndrewE.,PaulFrijtersand

MichaelA.Shields

8/6/2019 Van Hoorn, 2009

230/280

(2008).RelativeIncome,HappinessandUtility:An

ExplanationfortheEasterlinParadoxandOtherPuzzles.JournalofEconomicLiterature,

XLVI(March),95-144.

Cohen,Sheldon,WilliamJ.Doyle,DavidP.Skomer,

PhilipFireman,JackM.Gwaltney,Jr.andJasonT.Newson(1995).Stateandtraitnegativeaffectaspredictorsofsubjectiveandobjectivesymptomsofrespiratory

viralinfections.Journal

8/6/2019 Van Hoorn, 2009

231/280

ofpersonalityandSocialPsychology,68(1),

159-169.

Costa,PaulT.,Jr.andRobertR.McCrae(1988).PersonalityinAdulthood:ASix-YearLongitudinalStudyofSelf-ReportsandSpouseRatingson

theNEOPersonalityInventory.JournalofPersonalityandSocialPsychology,54(5),853-863.

33

8/6/2019 Van Hoorn, 2009

232/280

Crossley,ThomasF.andStevenKennedy

(2002).Thereliabilityofself-assessedhealthstatus.JournalofHealthEconomics,21,

(4),643-658.

Danner,DeborahD.,DavidA.SnowdonandWallaceV.

Friesen(2001).PositiveEmotioninearlyLifeandLongevity:FindingsfromtheNunStudy.JournalofPersonalityandSocialPsychology,80(5),804-813.

DiTella,Rafael

8/6/2019 Van Hoorn, 2009

233/280

andRobertMacCulloch(2006).SomeUsesof

HappinessData.JournalofEconomicPerspectives,20(1),25-46.

Diener,

Ed(1984).SubjectiveWell-Being.PsychologicalBulletin,95(3),542-575.

Diener,Ed

(1994).AssessingSubjectiveWell-Being:ProgressandOpportunities.SocialIndicatorsResearch,31(2),103-157.

Diener,Ed(2000).SubjectiveWell-Being.TheScienceofHappinessand

aProposalfor

8/6/2019 Van Hoorn, 2009

234/280

aNationalIndex.AmericanPsychologist,55(1),

34-43.

Diener,Ed(2006).Guidelinesfornationalindicatorsofsubjective

well-beingandill-being.JournalofHappinessStudies,7(4),397-404.

Diener,

Ed,RobertA.Emmons,RandyJ.LarsenandSharonGriffin(1985).Thesatisfactionwithlifescale.JournalofPersonalityAssessment,49(1),71-75.

Diener,Ed,Pelin

8/6/2019 Van Hoorn, 2009

235/280

KesebirandRichardLucas(2008).Benefitsof

AccountsofWell-BeingForSocietiesandforPsychologicalScience.AppliedPsychology:An

InternationalReview,57(1),37-53.

Diener,EdandShigehiroOishi(2004).

AreScandinavianshappierthanAsians?Issuesincomparingnationsonsubjectivewell-being.In:FrankColumbus(ed.)AsianEconomicandPoliticalIssues,Volume10.Hauppauge,New

York:NovaScience,

8/6/2019 Van Hoorn, 2009

236/280

1-

25.Diener,Ed,EdSandvik,

WilliamPavotandDennisGallagher(1991).Responseartifactsinthemeasurementof

subjectivewell-being.SocialIndicatorsResearch,24(1),35-56.Diener,Ed,EdSandvik,Larry

SeidlitzandMarissaDiener(1993).Therelationshipbetweenincomeandsubjectivewell-being:Relativeorabsolute?SocialIndicatorsResearch,28(3),195-223.

Diener,Ed,

JeffreyJ.Sapyta

8/6/2019 Van Hoorn, 2009

237/280

andEunkookM.Suh(1998).SubjectiveWell-Being

IsEssentialtoWell-Being.PsychologicalInquiry,9(1),33-37.Diener,Edand

MartinE.P.Seligman(2004).BeyondMoney.TowardanEconomyofWell-Being.Psychological

ScienceinthePublicInterest,5(1),1-31.

34

8/6/2019 Van Hoorn, 2009

238/280

Diener,EdandEunkookM.Suh

(1997).Measuringqualityoflife:Economic,socialandsubjectiveindicators.SocialIndicators

Research,40(1-2),189-216.

Diener,EdandEunkookM.Suh(1999).

NationalDifferencesinSubjectiveWell-Being.In:DanielKahneman,EdDienerandNorbertSchwarz(eds.)Well-Being:TheFoundationsofHedonicPsychology.NewYork:RussellSageFoundation,

434-450.

8/6/2019 Van Hoorn, 2009

239/280

Diener,EdandEunkookM.Suh(2000).

MeasuringSubjectiveWell-BeingtoComparetheQualityofLifeofCulturesIn:

EdDienerandEunkookM.Suh(eds.)CultureandSubjectiveWell-Being.Cambridge,MA

/London:TheMITPress,3-12.

Diener,Ed,EunkookM.Suh,HeidiSmithandLiangShao(1995).Nationaldifferencesinreportedsubjectivewell-being:

Whydothey

8/6/2019 Van Hoorn, 2009

240/280

occur?SocialIndicatorsResearch,34(1),7-32.

Diener,Ed,EunkookM.Suh,RobertE.LucasandHeidi

L.Smith(1999).SubjectiveWell-Being:ThreeDecadesofProgress.PsychologicalBulletin,125

(2),276-302.

Dolan,PaulandMathewP.White(2007).HowCanMeasuresofSubjectiveWell-BeingBeUsedtoInformPublicPolicy.Perspectiveson

PsychologicalScience,2

8/6/2019 Van Hoorn, 2009

241/280

(1),71-85.

Easterlin,RichardA.

(1974).DoesEconomicGrowthImprovetheHumanLot?SomeEmpiricalEvidence.In:

PaulA.DavidandMelvinW.Reder(eds.)NationsandHouseholdsinEconomic

Growth:EssaysinHonorofMosesAbramovitz.NewYork/London:AcademicPress,89-125.

Easterlin,RichardA.(1995).Willraisingtheincomesof

allincreasethe

8/6/2019 Van Hoorn, 2009

242/280

happinessofall?JournalofEconomicBehavior

&Organization,27(1),35-47.

Easterlin,RichardA.(2003).Explaining

happiness.Proceedings

oftheNationalAcademyofSciences,100(19),11177-11183.

Ehrhardt,JoopJ.,WillemE.SarisandRuutVeenhoven(2000).Stabilityoflife-satisfactionovertime:Analysisofchangeinranksinanationalpopulation.Journal

ofHappinessStudies,

8/6/2019 Van Hoorn, 2009

243/280

1(2),177-205.

Ekman,Paul,

RichardJ.DavidsonandWallaceV.Friesen(1990).TheDuchenneSmile:Emotional

ExpressionandBrainPhysiologyII.JournalofPersonalityandSocialPsychology,58(2),

342-353.

Ekman,Paul,WallaceV.Friesen,MaureenOSullivan,AnthonyChan,IreneDiacoyanni-Tarlatzis,KarlHeider,RainerKrause,WilliamAyhanLeCompte,TomPitcairn,Pio

E.

8/6/2019 Van Hoorn, 2009

244/280

Ricci-Bitti,KlausScherer,MasatoshiTomitaandAthanase

Tzavaras(1987).35

8/6/2019 Van Hoorn, 2009

245/280

UniversalsandCulturalDifferencesinthe

JudgmentsofFacialExpressionsofEmotion.JournalofPersonalityandSocialPsychology,

53(4),712-717.

EuropeanValuesStudyGroupandWorldValuesSurvey

Association(2006).EuropeanandWorldValuesSurveysfour-waveintegrateddatafile,1981-2004.Availableelectronicallyfromhttp://www.jdsurvey.net.

Fellows,ErwinW.(1966).Happiness:Asurvey

ofresearch.Journal

8/6/2019 Van Hoorn, 2009

246/280

ofHumanisticPsychology,6(1),17-30.

Foster,JamesE.(1998).AbsoluteversusRelativePoverty.AmericanEconomicReview,

PapersandProceedings,88(2),335-341.

Frankel,S.Herbert(1953).The

economicimpactonunder-developedsocieties.EssaysonInternationalInvestmentandSocialChange.ReprintedApril1955.Oxford:BasilBlackwell.

Frey,BrunoS.andAlois

Stutzer(2002).What

8/6/2019 Van Hoorn, 2009

247/280

CanEconomistsLearnfromHappinessResearch?Journal

ofEconomicLiterature,XL(June),402-435.

Frey,BrunoS.,Simon

LuechingerandAloisStutzer(2007).Calculatingtragedy:Assessingthecostsofterrorism.Journal

ofEconomicSurveys,21(1),1-24.

Gruber,JonathanH.andSendhilMullainathan(2005).DoCigaretteTaxesMakeSmokersHappier.AdvancesinEconomicAnalysis

&Policy,5

8/6/2019 Van Hoorn, 2009

248/280

(1),Article4.Availableathttp://www.bepress.com/bejeap/advances/vol5/iss1/art4.

Hollnder,Heinz(2001).Onthevalidityofutilitystatements:standardtheory

versusDuesenberrys.JournalofEconomicBehavior&Organization,45(3),227-249.

Inglehart,Ronald(1990).CultureShiftinAdvancedIndustrialSociety.PrincetonUniversityPress.

Kahneman,Daniel(1999).ObjectiveHappiness.In:DanielKahneman,EdDienerand

NorbertSchwarz(eds.)

8/6/2019 Van Hoorn, 2009

249/280

Well-Being:TheFoundationsofHedonicPsychology.New

York:RussellSageFoundation,3-25.

Kahneman,DanielandAlanB.

Krueger(2006).DevelopmentsintheMeasurementofSubjectiveWell-Being.JournalofEconomicPerspectives,

20(1),3-24.

Kahneman,Daniel,AlanB.Krueger,DavidSchkade,NorbertSchwarzandArthurStone(2004a).TowardNationalWell-BeingAccounts.AmericanEconomicReview,

PapersandProceedings,

8/6/2019 Van Hoorn, 2009

250/280

94(2),429-434.

36

Documents

Van Hoorn, 2009