Methodology
Researching Happiness
WHAT IS HAPPINESS?
According to economists, happiness is a multifaceted state of well being containing feelings of contentment, gratification, ecstasy, hope, love, satisfaction, etc. It is a tedious and controversial task of adding up all the emotional variables that go into one’s general state of happiness and then surmising a common standard of measurement. Although methods of research do exists, this common standard has yet to be agreed upon.
AN OVERVIEW OF EXPERIMENTAL BEHAVIORAL ECONOMICS
Studies linking psychology and economics are continually growing in number and attention. One of the pioneers in the study of subjective economics was Richard Easterlin in 1974. His paper, Does Economic Growth Improve the Human Lot? led to the "Easterlin Paradox", which in simple terms, states that national income and national happiness are not proportional. Since the seventies, multiple economists have conducted studies on happiness, welfare, and income both on the micro and macro levels of economics.
Robert Frank, in Luxury Fever (2000), makes claim as to why the average level of satisfaction in the United States has not risen with respect to gross domestic product. He links this phenomenon with the increased materialism within individual households. People excessively use tangible consumer products to compete with others in status. The total wealth an individual has little impact life satisfaction compared to their wealth with respect to their neighbors and co-workers. Richard Layard makes the same arguments in Happiness: Lessons from a New Science (2005). He concludes that when the income of one person increases, the happiness of others in the close approximation decreases.
Although the use of experimental behavioral economics has increased, particularly over the last decade, the fallibility of the research methods and evidence used in these studies remain controversial. Since his 1074 publication, Richard Easterlin has been brought into question, most notably by Andrew Oswald of the University of Warwick. Participants of the study were rating their own level of happiness based on a numerical scale, minimizing the credibility of the evidence. Current research methods do not rely on the subject’s personal criticisms alone. There are many different factors that can affect happiness including biological, psychological, economical, and educational factors. The push away from the rational view point of traditional economic models is full of criticisms and uncertainties since an exact form of methodology for studying behavioral economics has yet to be established.
METHODS OF RESEARCHING
Let us agree that a day filled with pleasurable activities is, by large, more enjoyable than one filled with misery. But what factors indicate whether a particular event or situation is "pleasurable," and how do economists use it as a form of measurement?
Methodology
Those economists who have decided to dabble in the field of behavioral economics have loosely defined happiness as the "integral of experienced enjoyment and misery over time."(Schwarz and Kahnemenn 2006) The two leading methods of conducting research in the area of happiness are:
- A. Relying on people's choices and actions to convey what is pleasurable to them. This method of research is usually favored among economists.
- B. Relying on self-rated reports of daily activities and emotions.
The latter can be divided according to how personal assessments are conducted. Robert Kahnemenn uses retrospective reports of participants to analyze the level of emotional well-being present in their lives [more on Kahnemenn's research methodology below]. Other researchers such as T. F. Juster and F. P. Stafford in their study Time, goods, and well-being rank happiness on a scale from "dislike very much" to "enjoy a great deal".
Required Data
Despite the methodology behind the research, there are two sources of data needed to conduct a study in the area of personal well-being:
- 1. Data pertaining to activities with respect to time. The record of the allocation of time to daily activities is essential for making reasonable assessments.
- 2. Data expressing the level of enjoyment the respondent felt while engaged in various activities and circumstances.
Once data has been collected and assessed, researchers can compare the life situations of respondents with the level of well-being they experience. Factors such as wealth, marital status, family situation, work environment, education, level of material possessions, and diet. Economists look for patterns in the past and present so to make predictions for the future. This is a difficult and controversial task, however. Any predictions made pertaining to the future of happiness are considered fallible.
DAY RECONSTRUCTION METHOD(DRM)
The Day reconstruction Method, or DRM was developed by Daniel Kahnemenn to trace and describe the daily emotional path of people. Participants reconstruct the previous day using a diary and a set of four packets [1]. The diary is for their personal use so that they may take notes throughout the day. It is imperative to the study that while writing the diary; respondents are unaware of the questions that will be presented to them in the packets. This way, preconceived biases will be averted and the diary responses complete in detail.
Conducting the surveys within 24 hours of the day under investigation provided Kahnemenn with a flow of events rather than samples of moments. The first set of questions asked of the participants was routine. They included topics such as gender, religion, family, education, and their well being. They were then asked to reconstruct the previous day, with the aid of the diary, as a sequence of episodes. On average, participants experienced 14.1 episodes in a day and were segregated by a change in location or personal interaction. By sectioning the day into intervals, Kahnemenn and his team could assess change in diurnal emotional states and how this affects work and family lives in the short run and long run.
Advantages drm_documentation_july_2004.pdf, 189.0 kb, 07-06-2004
- Joint assessment of activities and subjective experiences.
- Information about the duration of each experiment allowing for duration weighted analysis of experience.
- Lower Respondent burden than typical for experience sampling methods.
- More complete coverage of the day than typical for experience sampling methods.
- Lower Susceptibility to retrospective reporting biases than typical for global reports on daily experiences.
- High Flexibility in adapting the content of the instrument to the needs of the specific study.
- Does not disrupt normal activities.
Disadvantages
- May fail to predict future patterns of behavior and choice.
- Difficult to in developing a current measure of macro well-fare without a large data set.
A SKEPTICS CRITICISM"
There is not a defined method to the study of happiness and its affects on economics. Various methodologies that have been used or still are have come under attack for through reviews and criticisms. According to Ariel Rubinstein,
"An experiment in economics starts from a basic intuition. Anybody can do an experiment but doing a good one that exposes a psychological phenomenon in a crystal manner is an art. If there is value in doing experiments, rather than making due with casual empiricism, it is only when they are done and assessed very carefully. It is my impression that intuitive and 'sexy' results are gladly accepted by behavioral economists without sufficient criticism."
Since happiness is such a broad and subjective emotional experience, experimental researchers must take precautions at every level. Rubenstien criticizes Gneezy and Rustichini (2000) for its lack in protocol, poor disclosure of evidence and data, and credibility issues. Within the field of behavioral economics, researchers must be able to account for each step they take and how they translated the data provided to them by respondents.
WORKS CITED
Coyne. Christopher J., Peter J. Boettke. "Economics and Happiness Research:Insights from Austrian and Public Choice Economics." 1 December 2005
Kahnemenn, Daniel, et al. "The Day Reconstruction Method (DRM): Instrument Documentation." published July 2004.
Kahneman, Daniel, et al.. "Would You Be Happier If You Were Richer? A Focusing Illusion." Science 30 June 2006. Vol. 312. no. 5782, pp. 1908 - 1910
Rubinstein, Ariel. "A Skeptic's Comment on the Study of Economics." Blackwell Publishing, Malden, MA. 2006.
Rubinstein, Ariel. "Discussion of "BEHAVIORAL ECONOMICS." PUBLISHED 20 AUGUST 2005.
