Durk Pearson & Sandy Shaw’s®
Life Extension NewsTM
Volume 15 No. 7 • November 2012


An unhappy poor person is in a better
position than an unhappy rich person
because he has hope. He thinks money
will help.
— Jean Kerr

The inherent vice of capitalism is the
unequal sharing of the blessings. The
inherent blessing of socialism is the e
qual sharing of the misery.
— Winston Churchill

Happiness Research: The Latest Squishy “Science”

Happiness researchers think that economic growth is not a good measure of the public’s sense of well-being and that perhaps government should be engaging in programs that enhance the public’s “happiness.” Considering what a failure governments have made in recent years in promoting economic growth, it isn’t surprising that (in their own interest) they would want to find an alternative measure of societal well-being.

The first problem with happiness research is that the choice of what questions to ask will determine what research will be done and that will depend upon the values of those holding the money and, hence, determining the questions to be researched. This introduces a bias in the “happiness” research funded by governments. As explained by the principles of public choice economics,* bureaucrats (like other people) tend to favor their own values and this has a major impact on what they spend the public’s money on. Here we look at a recent “happiness” research paper published in a highly respected scientific journal, the Proceedings of The National Academy of Sciences USA.


* James M. Buchanan won the Nobel Prize in Economics in 1986 for his pioneering work establishing the field of public choice economics.


Happiness research as reported by Easterlin et al1 uses as the principal measure of well-being one of the subjective well-being (SWB) measures said to be recommended in the recent Stiglitz-Sen-Fitoussi report: “All things considered, how satisfied are you with your life as a whole these days? From 0 = dissatisfied to 10 = satisfied.” In a commentary piece2 accompanying the Easterlin et al paper, the author cites something he calls the Easterlin Paradox (it must be a Big Deal since the initial letter in each word is capitalized). The Easterlin Paradox is that “economic growth has a positive effect on happiness with other things being equal; however, it also raises aspirations, and aspirations have a negative effect.” 2 The commentary author also claims that “aspirations are determined by society, particularly reference group income. The continuation of these two effects gives rise to a Hedonic Treadmill.”


† Regarding reference group income: What they may mean here is that society may “determine” how good some people feel about economic growth because what a person earns isn’t as important to some people as how much they earn in relation to what others earn. The Hedonic Treadmill may refer to a Rat Race as you try to keep up with the Joneses. You don’t have to worry about keeping up with the Joneses if there is no economic growth to cause unequal increases in income. But is this happiness or just a sort of satisfaction because everybody is as miserable as you are?


Does the Subjective Well-Being Statement Mean Anything?

All things considered, how satisfied are you with your life as a whole these days, with 0 being dissatisfied to 10 being satisfied?

People in Cuba are reported by happiness researchers to have a level of happiness as high as that of Americans. How can this be reconciled with the fact that a significant number of Cubans are willing to face death to escape from Cuba to America, while no Americans are trying to escape to Cuba? This suggests that whatever the happiness research is measuring, if anything, it is not happiness because we would not expect Cubans as happy as Americans to be desperately attempting to escape to a no more happy America. Of course, it could always be argued that most Cubans are as happy as Americans but the really unhappy ones are the ones trying to escape but that still wouldn’t explain why Cubans are trying to escape to America but not vice versa if people are just as happy (on the whole) in Cuba as in America.

Whether aspirations have a negative effect on happiness will depend on the risk preferences of an individual.3 The perceived satisfaction of having an opportunity to reach a highly desirable goal, such as a higher income, may become an aversion to loss at the time it becomes necessary to perform adequately to receive that higher income.3 Individuals who are less sensitive to the risk of loss across a range of incentives have been shown to do better in pursuing opportunities.3 Those people will not experience a negative effect on happiness as a result of aspirations resulting from opportunities for greater income.

The 0–10 ranking might change on a day to day basis due to myriad factors; for example, report of life satisfaction is influenced by the weather (scoring higher on nicer days3AA and rankings for life satisfaction would be expected to change with aging (which notably affects values, such as risk preferences3A) and probably for gender (for the same reason). What corrections are made to the models to account for these biases? As we have seen in other models (for example, the Consumer Price Index, or global climate change models), data corrections can woefully misrepresent the raw data. By not including energy and food costs in the Consumer Price Index (CPI), a fairly recent change in the way government calculates the CPI, the government makes it appear that the CPI has risen much less than it actually has.

Another interesting point about happiness data was made in the work of Nick Crafts (University of Warwick) as cited in Johns & Ormerod. Happiness, Economics and Public Policy” (The Institute of Economic Affairs, 2007) that economic growth promotes life expectancy because of improved nutrition, better hygiene, safer water, improved healthcare, etc. in more affluent societies. “So, as a result of growth extending life, the lifetime TOTAL of happiness of an individual will be far greater, even if at any given moment of time he or she may not be happier in a richer society.” (Quote from pg. 31 of book cited in this paragraph.)

Researchers are finding out a lot about some very complex mechanisms underlying human emotions, such as risk aversion and reward, among many other forms of behavior. There is no single number that could represent the combination of all these ongoing processes.3B For example, on the matter of gender differences in risk-reward tradeoffs. “[i]t has [] been found that testosterone and its metabolite, 3alpha-androstanediol, have rewarding and addictive properties, largely because they increase dopamine release in the shell of the nucleus accumbens, a brain region found to be stimulated in anticipation of irrational risk seeking. Testosterone may therefore underlie a financial variant of the ‘winner effect,’ in which a previous win in the markets leads to androgen priming and increased (and eventually irrational) risk taking in the next round of trading.”4 “If exposure is acute, glucocorticoids [stress hormones] can be euphorogenic, increasing motivation and promoting focused attention.” “However, if elevated glucocorticoids persist, their effects can be debilitating …” by “acting through the amygdala and hippocampus [to] promote a selective attention to mostly negative precedents... and produce a tendency to find threat and risk where none exist.”4 “Cortisol is likely, therefore, to rise in a market crash and, by increasing risk aversion, to exaggerate the market’s downward movement. Testosterone, on the other hand, is likely to rise in a bubble and, by increasing risk taking, to exaggerate the market’s upward movement.” 4

A 2006 paper reported that optimism is associated with psychological well-being. In a 2007 paper, neuroimaging showed that when the most optimistic subjects imagined future events, they felt that positive future events felt “closer” in time than did negative future events and they rated positive events in the future as more positive than positive events from the past. In addition, several brain regions showed decreased activation in these optimistic subjects when they imagined negative future events, including the amygdala and the rostral (front) portion of the anterior cingulate to which the amygdala is connected.events.4A,4B When they imagined positive future events, the activities of the ACC and the amygdala were reported to be more correlated with one another than when the subjects imagined negative futureevents.4A,4B These and other findings reported in the paper suggest, propose the authors, that the brain may often be biased toward promoting a rosy vision of the future and, as reported in a different paper, may be a reason that optimism can be associated with risky behavior. The point here, as far as “happiness research” goes, is that these are examples of very complex mechanisms underlying emotional elements that can be related to “happiness” and, hence, the choice of a number between 0 and 10 to somehow represent the overall picture derived from all this is ridiculously simplistic.


‡ Nes and Segerstrom, Dispositional optimism and coping: a meta-analytic review. Per Soc Psychol Rev 10:235-51 (2006).


How Do You Interpret the Meaning of Rankings of 0-10: A Couple of Examples

Suppose an individual has lost his job and faces a deteriorating personal economic situation; that person might report a very low measure of satisfaction, say 2. But how would you tell the difference between that and a response of 2 from someone who still has his job and who is not facing imminent personal bankruptcy but who has had much higher expectations for his current position in life and who is therefore very dissatisfied?

A day on which a golf professional is asked about life satisfaction could be a day when he has had a recent period of poor performance in his golf game. If so, he might report a lower life satisfaction score than if he had been doing well recently. On the other hand, somebody who was a poor golf player might report a higher life satisfaction than that professional if his golf playing was a major interest in his life and he had been playing well recently for a rank amateur.

“A wealth of brain stimulation reward studies have identified a network of subcortical areas involved in reward processing, notably the lateral hypothalamus, medial forebrain bundle and mesolimbic dopaminergic system. The firing of dopaminergic neurons may be critical for learning, signaling a reward prediction error representing whether the moment at hand is better or worse than expected.”5 Moreover, emerging evidence suggests that “reward and punishment may be mediated by separate anatomic systems.”5 The subjective well-being question, providing a single number, does not offer an objective measure of any aspect of this complex reward system. Accurate reward prediction would likely represent a significant aspect of an individual’s subjective well being, such that (as an example) one’s actual financial status might be less important to subjective well-being than the congruity of one’s financial status with the financial status that one has EXPECTED. If this were true, then a number between 0 and 10 might tell you only whether the individual providing the number correctly anticipated present circumstances, with 10 representing the highest level of satisfaction because things met his or her expectations.

The subjective feeling of satisfaction in life represented by a particular number between 0 and 10 is going to differ from one person to another and from one period of time to another, particularly when there are rapid changes in the conditions of life and, unsurprisingly,1 people are affected by changing societal conditions unequally, and2 are not equal in their abilities to anticipate and adapt to such changes. What is it that is the same when two people report a “5” in their ranking of satisfaction with their life? What is it that is different? How do you tell?

It is interesting to note that longitudinal data shows that, generally, factors such as stable family life, being married, financial security, good health, having religious faith, enjoying living in a cohesive community where there is a high level of trust, and peaceful government relations contribute to happiness and, curiously, these are not the sort of things that are emphasized by happiness researchers who look far more toward government planning to establish the conditions for people’s happiness. (See Johns & Ormerod. Happiness, Economics and Public Policy,” The Institute of Economic Affairs, 2007.)

In fact, the book cited in the paragraph above, explains that in the happiness timeline data, there does appear to be no correlation with income per head. “But equally, using the same approach, there is no temporal correlation between overall happiness and increased leisure time, crime, declining infant mortality, increased longevity, unemployment, declining inequalities between the sexes, and public spending.” “We also note, for completeness, that the use of multiple regression analysis instead of simple two-variable correlations does not alter the conclusion.” The authors quip that “[t]rying to base policy on this measure would be like the Monetary Policy Committee of the Bank of England, rather than using GDP [Gross Domestic Product] as an indicator of the state of the economy, relying instead on a measure that classified people on whether they felt rich, moderately rich, or poor.”(!)

Overall, we don’t think the life satisfaction question, providing a number from 0 to 10 as an indicator of overall life satisfaction, is useful for public policy. To use this, as the happiness researchers do, to attempt to correlate average life satisfaction numbers across a large population with particular sociopolitical changes that are taking place in that population, such as more or less government central planning, is (in our judgment) an unscientific guessing game. If Cubans are as happy as Americans, it must mean that economic growth isn’t too important and maybe even unnecessary for happiness and possibly the “security” of a government that makes most of your life’s decisions is an important source of happiness! Hey, that’s it! Why don’t we start doing that in America and make everybody happy?? We could call it Obamalife.

References

1. Easterlin et al. China’s life satisfaction, 1990-2010,” PNAS 109(25):9775-9780 (2012).
2. Knight. Economic growth and the human lot. PNAS 109(25):9670-1 (2012).
3. Chib et al. Neural mechanisms underlying paradoxical performance for monetary incentives are driven by loss aversion. NEURON 74:582-94 (2012).
3AA. Kahneman and Krueger. Developments in the measure of subjective wellbeing. J Econ Perspect 20:3-24 (2006) as cited in Johns & Ormerod. Happiness, Economics and Public Policy” (The Institute of Economic Affairs, 2007), pg. 27).
3A. Strough et al. Understanding decisions about sunk costs from older and younger adults’ perspectives. J Gerontol B Psychol Sci Soc Sci 66(6):681-6 (2011).
3B. Consider a scalar (a single number such as the temperature) and a tensor (that can be represented by a single number, but that also has a direction). You can’t represent a tensor with a single number alone.
,4. Coates and Herbert. Endogenous steroids and financial risk taking on a London trading floor. Proc Natl Acad Sci USA 105(16):6167-72 (2008).
4A. Schacter & Addis. The optimistic brain. Nat Neurosci 10(11):1345-7 (2007).
4B. Sharot et al. Neural mechanisms mediating optimism bias. Nature 450:102-5 (2007).
5. Paton & Louie. Reward and punishment illuminated,” Nat Neurosci 15(6):807-9 (2012).

An Additional Note on Happiness Research

There was a brief review (in the “Editors’ Choice” section) in the 27 July 2012 Science of a 2012 happiness research paper that we read after completing the discussion above. It brings up in a stark way some of the questions concerning just what is being measured in this research that we described above. The study (as described in the review by Stella Hurtley and Maria Cruz) supposedly compared the relationship between wealth — in the form of income and education — and subjective measures of the meaningfulness of life and happiness of residents of British Columbia. The report was said to find “an inverse relation” between socioeconomic status and the meaningfulness of life for parents when taking care of their children, but there was no such correlation during the part of their day when they were not taking care of their children. An inverse relation between socioeconomic status and the meaningfulness of life (when taking care of one’s children) would mean that the higher one’s socioeconomic status, the lower the meaningfulness of life. This is extremely odd, as the more wealth you have the better the chances are objectively for survival of your offspring. One would expect that there would be a warm and positive feeling that your wealth would provide security for the children you (presumably) love, not the reverse.

Hurtley and Cruz also describe a follow-up field experiment in which “the concept of wealth was casually introduced while asking attendees at a children’s festival about their happiness and sense of meaning.” Again, they describe the study finding no link between wealth and happiness, but there was “a negative relation between thoughts of wealth and a sense of meaningfulness.” There certainly has to be an explanation for what seems to us to be a bizarre way of viewing wealth, but there wasn’t any suggestion for what it might be in the Hurtley and Cruz writeup, though they suggested that “paradoxically, affluence may compromise one of the subjective benefits of parenting — a sense of meaning in life.”

We did not read the original paper. If you would like to do so, we provide the reference at the end of this paragraph. It seems to us that these are the sorts of responses that you would get from people who have biases against the wealthy and who are afraid of a negative response from others to admit to any positive feeling for the possession of wealth. At a children’s festival put on by (say) successful entrepreneurs and their spouses and children, we would expect considerably different results.

Reference

6. J Expsoc Psychol 48, 10.1016/j.jesp.2012.06.001 (2012).

If you reduce your expectations to zero, life becomes a series of happy surprises.
— — Tuck Andres (D&S: But would that be a 0 or a 10?)

The welfare and happiness of millions cannot be measured on a single scale of less and more.
— — F. A. Hayek. The Road to Serfdom” (Chapter V); Hayek was co-winner of the Nobel Prize for Economics in 1974

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