Happiness in Countries: Does Greater Wealth Equal Happiness: Difference between revisions
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In another recent survey, Hagerty and Veetoven rexamined this concept in regards to many foreign countries. Breaking up the countries into high, medium, and low GDP/per capita allowed them to make an easy comparison of average happiness scores. They had argued that previous economist who were against the idea that the wealth of countries equaled happiness had not taken an accurate measure lower GDP/capita countries and dealt mainly with middle to higher income countries. This plays such a large role as as wealth of nations continually increase, there is an increasing at a decreasing effect on GDP and happiness | In another recent survey, Hagerty and Veetoven rexamined this concept in regards to many foreign countries. Breaking up the countries into high, medium, and low GDP/per capita allowed them to make an easy comparison of average happiness scores. They had argued that previous economist who were against the idea that the wealth of countries equaled happiness had not taken an accurate measure lower GDP/capita countries and dealt mainly with middle to higher income countries. This plays such a large role as as wealth of nations continually increase, there is an increasing at a decreasing effect on GDP and happiness | ||
[[Image:Wealth_and_happiness.JPG|thumb|Description]] | [[Image:Wealth_and_happiness.JPG|thumb|Description]] | ||
<p align="left">(Hagerty, Micheal R. and Ruut Veenhoven. "Wealth and Happiness Revisited-Growing National Income</p> | |||
<p align="left">Does Go with Greater Happiness" April 2, 2002.)</p> | |||
<p align="right">[[Image:Wealth_and_happiness_table.JPG|thumb|Description]]</p> | <p align="right">[[Image:Wealth_and_happiness_table.JPG|thumb|Description]]</p> | ||
<p align="right">(Hagerty, Micheal R. and Ruut Veenhoven. "Wealth and Happiness Revisited-</p> | |||
<p align="right">Growing National Income Does Go with Greater Happiness" April 2, 2002.)</p> | |||
The idea that happiness is a zero sum game has lost some of it's standing. In fact, evidence shows that happiness can be raised in countries by increasing GDP. This is more prevelant in low GDP nations than in wealthy nations. | The idea that happiness is a zero sum game has lost some of it's standing. In fact, evidence shows that happiness can be raised in countries by increasing GDP. This is more prevelant in low GDP nations than in wealthy nations. | ||
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<p align="center">[[Image:Effects_on_happiness.JPG|thumb|Description]] </p> | <p align="center">[[Image:Effects_on_happiness.JPG|thumb|Description]] </p> | ||
<p align="center"> (Richard Layard, "Happiness: Has Social Science a Clue. Lionel Robbins Memorial Lectures 2002-2003.)</p> | |||
Richard Easterlin was one of the first economists to look happiness and see how economics effected it. His finding concluded that there was no set correlation and that happiness was not increased by economic growth. The graph below is one which shows that as the USA's GPD has continually grown the happiness levels have stagnated or slightly decreased. This pattern isn't just limited to the USA, in Belgium similar data has been found which shows the same patterns. Other European Union states have found somewhat similar results. Japan is another example already mentioned: The real income of Japan has risen over six times between 1950 and 1991. This is contrasted with surveys that show no change in overall happiness. | |||
<p align="center">[[Image:Layard_article.JPG|thumb|Description]] </p> | |||
<p align="center"> (Richard Layard, "Happiness: Has Social Science a Clue. Lionel Robbins Memorial Lectures 2002-2003.)</p> | |||
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In the majority of the cases, people would rather get less, as long as everyone else is recieving half of what they are earning. This example shows relative income. People are happier to earn less as long as other people were worse off. This relationship can be used in conjuction with various countries. For a whole society, if people are thought to use relative income as a measure for their happiness, then economic growth does nothing in helping happiness. The only way happiness can change is if people would look at a reference that is lower in wealth than they did before. Happiness remains unchanged as these references maintain a relative stability. | In the majority of the cases, people would rather get less, as long as everyone else is recieving half of what they are earning. This example shows relative income. People are happier to earn less as long as other people were worse off. This relationship can be used in conjuction with various countries. For a whole society, if people are thought to use relative income as a measure for their happiness, then economic growth does nothing in helping happiness. The only way happiness can change is if people would look at a reference that is lower in wealth than they did before. Happiness remains unchanged as these references maintain a relative stability. | ||
The British Household Panel Survey data show that income does not play a significant role in unhappiness, however, joblessness and unemployment does. Clark and Oswald, two researchers of the topic, fail to find significant evidence to support a positive correalation between income and happiness. The strong impact of unemployment is depicted in these graphs from the British Household Panel Survey. | |||
<p align="center">[[Image:Graphs.JPG|thumb|Description]]</p> | |||
<p align="center">[http://www.jstor.org/cgi-bin/jstor/printpage/00130133/di983549/98p0497i/0.pdf?backcontext=page&dowhat=Acrobat&config=jstor&userID=40093d0b@dickinson.edu/01cce440300050a980b&0.pdf]</p> | |||
The data shows those who are unemployed are prone to twice the amount of mental distress than those who are employed. The drop in income is not what is troubling the unemployed either. It is the non-pecuniary distress. An estimated amount of income to appease the same person who becomes unemployed is much greater after being unemployed. | |||
<p align="right">[[Image:Graph_2.JPG|thumb|Description]]</p> | |||
<p align="right">[http://www.jstor.org/cgi-bin/jstor/printpage/00130133/di983549/98p0497i/0.pdf?backcontext=page&dowhat=Acrobat&config=jstor&userID=40093d0b@dickinson.edu/01cce440300050a980b&0.pdf]</p> | |||
[[References:Happiness]] | [[References:Happiness]] | ||
==Case Studies== | |||
[http://www.brookings.edu/es/dynamics/papers/pay/pay.pdf Study on Happiness and Russia] | |||
[http://www.blackwell-synergy.com/links/doi/10.1111/1467-9361.00131 The Effects of Unemployment on Happiness in Kyrgyzstan] | |||
[http://www.jstor.org/view/00222445/ap020140/02a00200/0?frame=noframe&userID=40093d0b@dickinson.edu/01cc99334100501d6fbc7&dpi=3&config=jstor The effects of Marriage on Happiness Levels of Citizens in 17 Nations] | |||
[http://itech.dickinson.edu/wiki/index.php/Income_and_Output:_Their_Relation_to_Happiness#Introduction Back Home] | |||
Latest revision as of 23:12, 26 April 2006
Within this argument lies two theories. On one hand some people believe that in many cases YES a wealthier country will experience higher happiness, but on the other hand there are many economists who think that there is NO relationship
Evidence for a Connection
So does a higher GDP have permanent effects on a nation’s happiness? GDP does help buy extra happiness. But other factors have been forming throughout the years that have gradually offset the benefits of extra real income. To make this correlation easier to find we used the ‘GDP in a happiness Regressions’ equation, provided in the essay, The Macroeconomics of Happiness.” The equation is as follows:
- HAPPYjit: well-being level reported by an individual ‘j’ in country ‘i’ in the year ‘t’
- GDPit: Gross Domestic Product per capita in that country
- PERSONALjit: Personal characteristics of respondents (income, marital status, education, employed/unemployed, age
Below is a Comparison of the USA's GDP and it's fluxuations compared to average happiness survey fluxuations that occured during the same time frame. As you can see, if you visually compare the data there are similar peaks and valley's in both.
In another recent survey, Hagerty and Veetoven rexamined this concept in regards to many foreign countries. Breaking up the countries into high, medium, and low GDP/per capita allowed them to make an easy comparison of average happiness scores. They had argued that previous economist who were against the idea that the wealth of countries equaled happiness had not taken an accurate measure lower GDP/capita countries and dealt mainly with middle to higher income countries. This plays such a large role as as wealth of nations continually increase, there is an increasing at a decreasing effect on GDP and happiness
(Hagerty, Micheal R. and Ruut Veenhoven. "Wealth and Happiness Revisited-Growing National Income
Does Go with Greater Happiness" April 2, 2002.)
(Hagerty, Micheal R. and Ruut Veenhoven. "Wealth and Happiness Revisited-
Growing National Income Does Go with Greater Happiness" April 2, 2002.)
The idea that happiness is a zero sum game has lost some of it's standing. In fact, evidence shows that happiness can be raised in countries by increasing GDP. This is more prevelant in low GDP nations than in wealthy nations.
Evidence Against
Many of the arguments that oppose the idea that there is a connection between happiness and a country's wealth state that there are other factors that are more important and overshadow the happiness theory. People point at Japan whose economic growth has skyrocketed (increased to over 6 times from 1951) yet no increase in happiness has been reported. They point to the idea of relative income and unemployment as being a better determinant when discussing how happy are the citizen's of a country.
When first looking at many illustrations of countries plotted in regards to GDP and happiness, there seems to be a direct correlation between increasing happiness and GDP. Some economists suggest that there are other inside forces that help drive this trend besides happiness. Pointing to the fact that wealthier countries have, on average, a more stable democracy than poor countries. Another factor of happier countries that could play a role is the notion that citizen's of poor countries don't have access to the higher health care.
(Richard Layard, "Happiness: Has Social Science a Clue. Lionel Robbins Memorial Lectures 2002-2003.)
Richard Easterlin was one of the first economists to look happiness and see how economics effected it. His finding concluded that there was no set correlation and that happiness was not increased by economic growth. The graph below is one which shows that as the USA's GPD has continually grown the happiness levels have stagnated or slightly decreased. This pattern isn't just limited to the USA, in Belgium similar data has been found which shows the same patterns. Other European Union states have found somewhat similar results. Japan is another example already mentioned: The real income of Japan has risen over six times between 1950 and 1991. This is contrasted with surveys that show no change in overall happiness.
(Richard Layard, "Happiness: Has Social Science a Clue. Lionel Robbins Memorial Lectures 2002-2003.)
Let's start with a situation. For this example, just choose what outcome you would rather have, which one would make you happier:
- You get 50K and everyone else gets only half that
- You get 100K and everyone else gets more than double that
In the majority of the cases, people would rather get less, as long as everyone else is recieving half of what they are earning. This example shows relative income. People are happier to earn less as long as other people were worse off. This relationship can be used in conjuction with various countries. For a whole society, if people are thought to use relative income as a measure for their happiness, then economic growth does nothing in helping happiness. The only way happiness can change is if people would look at a reference that is lower in wealth than they did before. Happiness remains unchanged as these references maintain a relative stability.
The British Household Panel Survey data show that income does not play a significant role in unhappiness, however, joblessness and unemployment does. Clark and Oswald, two researchers of the topic, fail to find significant evidence to support a positive correalation between income and happiness. The strong impact of unemployment is depicted in these graphs from the British Household Panel Survey.
The data shows those who are unemployed are prone to twice the amount of mental distress than those who are employed. The drop in income is not what is troubling the unemployed either. It is the non-pecuniary distress. An estimated amount of income to appease the same person who becomes unemployed is much greater after being unemployed.
Case Studies
The Effects of Unemployment on Happiness in Kyrgyzstan
The effects of Marriage on Happiness Levels of Citizens in 17 Nations
