Financial Daily from THE HINDU group of publications
Monday, Jun 27, 2005
Industry & Economy - Economy
Columns - Errors & Omissions Expected
Equations of happiness for a coherent public policy
HUMAN development is not merely about national incomes. It encompasses the environment in which people can develop their full potential and lead productive, creative lives in accordance with their needs and interests, states http://hdr.undp.org of the United Nations Development Programme. "People are the real wealth of nations. Development is thus about expanding the choices people have to lead lives that they value. And it is thus about much more than economic growth, which is only a means - if a very important one - of enlarging people's choices."
How sweet to hear! But the disappointing fact is that on the Human Development Index (HDI) released in July 2004, India's ranking was 127. The last rank 177 went to Sierra Leone. "The most basic capabilities for human development are to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community. Without these, many choices are simply not available, and many opportunities in life remain inaccessible... " and so forth you'd know from the HD Report 2004 though they may sound like platitudes.
Well, these are not like our polls; so we can't ask for recount. Yet, a recent research paper from the National Bureau of Economic Research (www.nber.org) may be of interest. Titled `Happiness and the Human Development Index: The Paradox of Australia', it is written by David G. Blanchflower of Dartmouth College and Andrew J. Oswald of the University of Warwick. The paper questions the ranking of Australia as No. 3 on HDI at a level higher than all other English-speaking nations.
The HDI departs from the traditional GDP measure, and gives a score that amalgamates three indicators: lifespan, educational attainment and adjusted real income. That's fine, note the authors, but argue that the index is a mechanical criterion; for, "it does not capture the contentment or psychological state of individuals".
To do that, some measure of subjective well-being or `happiness' is required, they reason and summarise `recent findings from statistical happiness research'. Such as that `a doubling of salary makes a lot less difference than life events like marriage', that whole countries do not seem to get happier as they get richer, that `two of the biggest negatives in life are unemployment and divorce', that `good and bad life events wear off as people get used to them', and that `people care about how they are treated compared to those who are like them'.
The authors draw from the International Social Survey Programme (ISSP) covering `approximately 50,000 randomly sampled individuals from 35 nations', data relating to the following well-being questions: If you were to consider your life in general, how happy or unhappy would you say you are, on the whole? (on a 7-point scale) All things considered, how satisfied are you with your family life? (on a 7-point scale) All things considered, how satisfied are you with your main job? (on a 7-point scale) To what extent do you agree or disagree? My job is rarely stressful (on a 5-point scale) How often has the following happened to you during the past three months? I have come home from work too tired to do the chores that need to be done (on a 4-point scale).
What are their findings? That "Australia is near the bottom of the international league on job satisfaction levels."
A caution, however, is that "it is probably hazardous to compare one country's happiness answers to another's" because of differences in cultures and biases. Happiness data, if carefully constructed, are intrinsically more appropriate as an indicator of a nation's mental well-being than any mechanical indicator such as an HDI-style index, reasons the paper.
Happiness equations offer a variety of opportunities, state the authors. Such equations "can tell politicians and others how citizens value the different effects upon well-being of diverse influences such as unemployment, the divorce rate, real income, friendship, traffic jams, crime, health, and much else".
If only they learn to exploit "the power of statistical happiness equations" we may have a more coherent public policy, postulates the research. And our netas may also find out how unhappy we are!
I'm sure our economists may find a way to improve our ranking by rearranging statistics, but in the meanwhile, we may as well be happy with the assigned rank, 127, that adds to a perfect 10.
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