If you would like to use any of part of this dissertation please contact Ian Crawford (+44

[0]7709 103 431) first and he will be happy to help.

HAPPY?

A study of Subjective Well-Being data, the relationship between wealth and

happiness, and possible policy implications.

16th January 2006

Ian Crawford
Product Design
0201603
Glasgow School of Art

Supervisor:
Nicholas Oddy
 SYNOPSIS

The aim of this dissertation is to study in detail the relatively new research and
theories that discuss Happiness, or Subjective Well-Being, from a scientific point of
view, including psychology, economics and neuroscience, in order to gain an
interdisciplinary perspective. The work will subsequently look for possible
implications that could affect the way in which "Western" culture works, both
domestically and in relation to the rest of world, with an emphasis on the UK and the
US. I will focus predominantly but not exclusively on the relationship between wealth
and happiness, and conclude with possible policy changes that could improve the
happiness of as many people as possible.

2
 CONTENTS

1. Introduction p.4

2. What is happiness? p.7

Subjective or Objective Approach?
Subjective Approach Selected

3. How will it be defined? p.11

4. How can it be measured? p.13

5. What psychological processes take place in relation to SWB? p.19

Social Comparisons
Aspiration Level

Homeostatic Theory

Adaptation

6. What is the relationship between wealth and happiness? p.27

Problems with GNP
Cross-Country Comparisons
Increasing GNP over time
Personal Income

7. What policy changes are suggested in relation to happiness? p.37

SWB Data and New Standards of Measurement

Proposed Changes to National Policies
Final Conclusion

8. Appendices p.43

9. Bibliography p.48

3
 Introduction

"How to gain, how to keep, how to recover happiness is in fact for

most men at all times the secret motive for all they do." 1

This quote from William Jones is a good example of an opinion held by many, but as
a concept that is arguably the end to which everything else we do are merely means, it
is perhaps surprising that happiness does not seem to be regarded as an important
subject worth debating or discussing. In terms of politics, Gross National Product is
studied to a much greater extent, and improving this particular figure, rather than the
direct well-being of a country's citizens, is quite often one of the main aims of
government. Recently though, happiness has come under renewed scrutiny from both
professions that one would expect, such as psychologists 2, and also from others that
one may not expect, such as economists. For example, in 2003 the Nobel Prize for
economics was accepted not by an economist, but by Daniel Kahneman, the professor
of psychology at Princeton University, for his work in the area of "hedonics".
Obviously the subject has been an important part of philosophical debate for
thousands of years, but in terms of research the field is relatively young.
The first significant studies concerning happiness took place in the United
States in the 1960s and were aimed at understanding mental health issues. During the
1970s, an increasing number of surveys had happiness as a central theme, and this
body of research is still growing. However, one of the inherent problems is that many
of the studies use different definitions, and may begin from a biased standpoint. In
1994 Professor Ruut Veenhoven, of Erasmus University in Rotterdam, published
Correlates of Happiness, a huge work consisting of three volumes, which reanalyses
630 major surveys from all around the world, and in 1999 the Journal of Happiness
Studies was first published. Veenhoven, an extremely important figure in the area of

1
William Jones, Varieties of Religious Experience, New York 1902, p.76. (cited in Bruno Frey and
Alois Stutzer, Happiness and Economics, p.3)
2
"From 1967 to 1994, Psychological Abstracts included 5099 articles mentioning anger, 36,851
mentioning anxiety, and 46,380 mentioning depression. But for every 17 abstracts on these topics, only
one mentioned the positive emotions of joy (405), life satisfaction (2340), or happiness (2389)." -
David Myers, The Pursuit of Happiness, p.15.

4
happiness research, estimates that by March 2003, 3300 studies had taken place in
relation to the subject 3.
With so much research being compiled, the results are beginning to reach a
critical mass and firm conclusions are being agreed upon. At this stage, the question is
not whether or not a statement is correct, but increasingly why certain trends and
relationships are taking place at all.
The aim of this dissertation is to study in detail the data and theories that
discuss happiness, or Subjective Well-Being (SWB), from the many backgrounds
where the topic has been researched in order to gain an interdisciplinary perspective.
The work will subsequently look for possible implications that could affect the way in
which "Western" culture works, predominantly but not exclusively, around the
relationship between money and happiness. In order to discuss the questions raised it
is important to construct an analytical approach to the subject, and to attempt to do so
without bias, in contrast to many others who have written on the issue.
The first part of the dissertation will centre on the concept of happiness itself,
raising and attempting to answer the ensuing questions. Each question acts as the
inspiration for that specific section of the dissertation.

What is happiness?

This section will discuss what actually constitutes happiness, in particular the
Greek concepts of "eudaemonia", which is an objective explanation, and Democrites'
εύεστώ, which is based on a subjectivist approach. It will subsequently explain the
author's chosen understanding.

How will it be defined?

Which definition shall be used in this particular work, and why this definition
has been selected over others.

How can it be measured?

There are many different problems and criticisms involved with the attempt to
measure happiness. Many scholars question the validity of results from relatively
simple surveys, and alternative methods like "experience sampling" will be discussed.
3
Ruut Veenhoven, Happiness, The Psychologist, March 2003, vol. 16, nr. 3, pp. 128-9

5
A look will be taken at both subjective measurements, and slightly more recent and
technologically advanced objectivist methods.

What psychological processes take place in relation to Subjective Well-Being?

In this section the related psychological theories of happiness and satisfaction

will be analysed, among these are the models of adaptation, whereby a person will
acclimatize to any repeated stimulus, and aspiration, which contends that happiness
can be understood within a goal-orientated structure. These must be discussed at
length as they may or may not prove to invalidate the belief that it is possible to raise
happiness from an objective point of view.

What is the relationship between wealth and happiness?

Obviously the question of whether or not wealth relates to happiness is a key

one, and could have far-reaching and provocative implications. This query will form
the main backbone to the dissertation and will henceforth be dealt with in more detail
than many of the other questions raised. Additionally, the link between psychological
processes mentioned in the previous section and money will be analysed in order to
better understand the relationship.

What policy changes are suggested in relation to happiness?

This section aims to give possible suggestions and a direction in response to

the summary of research that has been studied. This will take the form of a number of
proposed policy changes for government, which if implemented would help to raise
the happiness of the population.

In regard to the way in which this work has been approached, it is important to
mention that little or no first hand research will be used, instead the work will
predominantly reference large-scale studies that have already taken place. The first
reason for this is an issue of time and logistics. The second is the limited knowledge
and abilities of the author. Many of the studies and surveys need specific and detailed
criteria before they can be used to determine the results, for example, when discarding
the effects of variables that are not of interest to the scholar.

6
 Because of the nature of the sources, for the most part reviews of empirical
research, the tone of the dissertation follows the same style. These sources were
chosen as they are more likely to give a useful and grounded perspective than
philosophical or purely opinion-based works.

What is Happiness ?

In order to provide a definition of happiness for the purposes of this work, it is

important to explain briefly the ways in which different scholars regard the concept of
happiness. Though the concept may initially seem rather simple, it is actually an
extremely complex idea, which has a myriad of different opinions and theories
attached to it. One of the most perplexing aspects is the significant range of different
explanations for what actually constitutes happiness. I will look in detail only at the
main disagreement associated with the nature, and henceforth the definition, of
happiness.

Subjective or Objective Approach?

In ancient Greece there were two predominant opinions held as to what happiness is,
and how it can be defined. The main difference between these two schools of thought
was whether or not happiness should be regarded in subjective or objective terms.
An objective explanation of happiness concludes that it can best be understood
through fixed standards, which are not necessarily important to the person in question.
Henceforth, personal feelings of pleasure or pain are not relevant. It is quite common
for objective theories to provide a list of things and activities that are regarded as
"objective prudential goods", including "moral goodness, rational activity and the
4
development of one's abilities" Additionally, many objective theories are based on
the question of how we should live our lives, and thus have much in common with
moral philosophy.
Aristotle believed in the objective explanation of happiness, which he termed
"eudaemonia", or the "possession of supreme goods". Like many other philosophers
he held in high regard the virtue, among others, of leading a contemplative life. He
and his peers primarily believed in a way of living, rather than the experiences of

4
J Varelius, Objective Explanations of Individual Well-Being, 2003

7
satisfaction or pleasure. The problem was that the criteria were never conclusively
defined, and that a decision was not provided as to whom would make the judgment.
There are two more modern and alternative aims of scholars who are still in
accordance with an objectivist standpoint. The first is to try and find some method to
directly test people's brainwaves, as it has been suggested that a person may not
actually know how happy they are.5 This area of research has been studied over the
past few years by Richard Davidson of Wisconsin 6, who uses Magnetic Resonance
Imaging (MRI) and Positron Emission Tomography (PET) to study activity in the
brain. The other is Kahneman's study of "moment utility", but because this subject
relates more closely to measurement than to what happiness is per se, it shall be
discussed further in the section titled “How can it be measured?”, as apposed to being
expanded upon here.
In contrast to Aristotle, but at the same time in history, Democrites'
explanation of happiness was one of the first that took a subjective point of view. His
definition of εύεστώ basically translates as "satisfaction with life", which is inherently
subjective, as it relies upon the view of the individual.
All subjective theories hold it as evident that happiness only works on a
personal level, and that subsequently, the best method of attempting to measure
happiness is by asking the person in question. A good example of a more modern
subjective definition of happiness is the one developed by Fordyce:

"Happiness is a particular emotion. It is an overall evaluation

made by the individual in accounting all his pleasant and
unpleasant affective experiences in the recent past." 7

It was the subjective theories of happiness, and the fact that there are few agreements
over the definitions involved, that gave rise to the term Subjective Well-Being
(SWB), which is commonly used in more recent research. This term is used to make it
clear that what is being measured is someone's perspective of their own happiness, as
opposed to an attempt at objective measurement. The vast majority of scholars who
use the term SWB are interested in the idea of long term satisfaction, of a more lasting

5
Richard Nisbett and Lee Ross, Human Inference: Strategies and Shortcomings of Social Judgement,
New Jersey, 1980, p.223. (Cited in Bruno Frey and Alois Stutzer: Happiness and Economics, p.22.)
6
Richard Davidson et al., Making a Life Worth Living: Neural correlates of well-being, Psychological
Science, Volume 15 - Number 6
7
Ruut Veenhoven, Conditions of Happiness, p.16, Exhibit 2/1c

8
nature, rather than the fleeting mood changes that are presently measured by PET
scanning methods. Such scans could be used, but only if they were compiled over
time and an average was taken from the results.

"SWB is the well-being as declared by a person; hence, it is a

measure of a person’s well-being that incorporates all life events,
aspirations, achievements, failures, and emotions of human
beings. ... In consequence, SWB represents an enhancement in the
understanding of well-being." 8

There is no substantial evidence to back up Rojas' view that SWB is an

"enhancement" in the understanding of well-being. In fact, there are many who have
proposed significant problems that may affect this opinion. Most notably is the work
of Daniel Kahneman, who has been attempting to revive Jeremy Bentham's concept of
utility, which suggests that our hedonic experiences control our decision making
process. Kahneman clarifies one of the main problems related to subjective
approaches through his distinction between "moment utility" and "remembered
utility".9 He believes that the most successful way to measure SWB is to ask someone
how he or she feels at that particular moment - moment utility. In order to understand
someone's SWB, one must derive it from the measurements taken at particular
moments, because if you ask someone to try and remember how they felt over an
extended period of time, as many researchers do, their judgement will be flawed.10 If
it is true that a person's judgement of the past is jaded, then by far the majority of
surveys that have taken place on the subject of SWB may be unsound, as these
surveys tend to attempt to gain an understanding of someone's overall level of SWB,
rather than their mood at the moment of the interview.

Subjective Approach Selected

Despite the problems that a subjective explanation of happiness has, the research
carried out from this point of view shall still be the main source of data used in this
work. Therefore the "type" of happiness in focus will be the more lasting, "overall-
satisfaction" based one. There are several reasons for this:

8
Mariano Rojas, The Multidimensionality of Poverty: A Subjective Well-Being Approach, Section 2.1
9
Cited in Naina Chernoff, Memory Vs. Experience - Happiness is Relative, 2004
10
ibid.

9
 As Rojas discussed above, usually an objective point of view does not take
into account all of the past life events and aspirations that an individual may have.
Henceforth, it fails to include the complexities of each specific person. Furthermore,
certain "objective list theories" depend on a complex mixture of conditions and
factors, and no agreement has been made on which conditions are important, and
which are arbitrary. Even if the circumstances are agreed upon, measuring them
causes many more problems, for example, the earlier mentioned concept of
"eudaemonia" does not specify who should be the judge of whether or not the
conditions are met. A subjective approach is easier to measure empirically because it
focuses on asking someone how he or she feels, and therefore does not have the
difficulty of taking measurements of such virtuous ideas as "truth" or "fulfilment".
An additional reason for selecting a subjectivist approach is that the bulk of
existing research centres on the terminology of Subjective Well-Being. If one were to
try and take an objective approach, then there is only very little evidence to make use
of, and it would be unlikely to present any worthwhile conclusions.
Furthermore, a person's well-being is inherently subjective because it relies
upon someone's personal assessment of his or her life, either in general terms, or in
specific moments.
Finally, if the perspective of this work were to attempt to embody both an
objective and a subjective point of view, as others have, it would be unlikely to come
to any conclusions at all. A narrower, subjective approach towards the subject matter
shall therefore be used hereforth. If it were possible, it would be ideal to use data from
the more recent objectivist approaches of "moment utility" and the results of directly
measuring brain activity, however, both of these areas are still in their infancy and
have a very limited range of results because of the length of time that the
measurements can cover.

10
How will it be defined?

It is obviously important that, before discussing any further the implications of new
research, a definition is chosen to explain what will be termed happiness, or
Subjective Well-Being, in the rest of this dissertation. There is a significant flaw in
creating a definition that suits the exact beliefs of the author because many of the
different researchers have provided their own definition when doing the research. It
would be false to suppose that by creating a new definition, it can be used
interchangeably with the definition provided by the scholar in question. Thus, in order
to be able to use the results from different surveys and experiments, a definition must
be used that relates closely enough to those of existing works.
Veenhoven, who, in comparison to the other scholars in the same area, uses
perhaps the most critical and scientific approach to the research, has reviewed the
largest collection of happiness data in the world.11 Unlike many other authors, who
consciously select the surveys that support their point of view, he refuses to use
results that were gained through surveys where the person leading the analysis had
used a noticeably different definition from the one he himself uses. Because of this
fact, this dissertation shall use the same definition as Veenhoven, which regards
happiness as:

"The degree to which a person evaluates the overall quality of his

present life-as-a-whole positively. In other words, how much the
person likes the life he/she leads." 12

In addition to the fact that this definition has been carefully examined, to make sure
that it is compatible with certain studies, it has been meticulously created so that there
is no confusion as to what is meant. There are specific words and phrases that must be
explained in a little more detail to show this:

11
World Happiness Database, http://www2.eur.nl/fsw/research/happiness/
12
Ruut Veenhoven, Advances in Understanding Happiness, p.5, Section 2.1

11
"Degree" and "Positively":

Based on the experiments conducted by Richard Davidson, it has been almost

conclusively proven that happiness and unhappiness work on a single dimension. John
Stuart Mill made a distinction between what he regarded as lower and higher forms of
pleasure, yet psychologists have not yet been able to identify a difference. By using
the term "degree", it is clear that there can be more or less "happiness" at any given
moment, yet unhappiness and happiness are simply different areas of the same scale.

"Person" / individual and "Evaluates":

In relation to the argument discussed in the last section, this definition is

taking a subjectivist stance, rather than an objective one.

"Overall":

As Rojas discussed, SWB takes into account a person’s own values and
judgements, and is based on his/her personal criteria, as opposed to that of an external
judge.

"Life-as-a-whole":

This terminology makes it clear that the interest lies in more than just the
present moment, but also how someone views their past, and possible even their
future. This is the only problem that the author sees in this definition. As mentioned
before, Kahneman has shown some of the problems inherent in the way in which
research has been carried out in the past is due to the fact that the questions are based
around extended periods of time, particularly the past. Humans are not always capable
of making correct judgements of how they felt in the past. This point of view will be
discussed more extensively in the next section, which relates to the measurement of
happiness.

12
How can it be measured ?

Bentham and the Utilitarians believed that it was possible to measure happiness to a
level where it would be a useful method for decision-making and many scholars today
are beginning to agree with this assessment, but it is still one of the most hotly
debated issues within the field. The only significant development since Bentham's
day is the use of PET (Positron Emission Tomography) and other scanners, which
directly measure activity in the brain. In comparison, the vast majority of data has
been cultivated through the use of social surveys.
As with the earlier section: "What is Happiness?" the measurement techniques
used in relation to happiness also follow the two main paths of objective and
subjective measures.
One of the most common types of objective measurement is the use of "social
indicators", which may include income, health and other factors that are used to try
and measure "standard-of-living", and sometimes "quality-of-life" (QoL). As
discussed in the previous chapter, it is clear that these types of measurement are not
useful in attempting to understand happiness as it has been defined here. However,
there are other forms of objective measurement that may be used in the future, which
were mentioned briefly in the last section.
First, there is the direction of scientific experiments and brain physiology that
directly measures the level of energy in different parts of the brain. The most
prominent pioneer in this area, Richard Davidson, believes that he has defined the two
areas of the human brain that relate to hedonic levels of pleasure and pain, or
happiness and unhappiness 13. His findings imply that positive feelings correspond to
the area of the pre-frontal cortex, whereas negative feelings are linked with activity on
the opposite side of the brain.

13
Richard Davidson, Toward a Biology of Personality and Emotion

13
 Fig. i
The brain's response to two pictures, as illustrated by a PET scan.

The result from one of the experiments is shown above. After lying people down in a
PET scanner, they are shown different images of two babies. These images then
trigger electrical activity in certain parts of the brain and the PET scanner picks up the
changes in glucose usage, and shows these as lighter, red and yellow, patches.
Henceforth, it is clear that different areas of the brain are used when the mind of the
subject is in different emotional states.
Astonishingly, it is also possible to predict the behavior of a baby whose
mother will leave them for a few minutes before the actual event takes place, by
measuring the level of activity in the brain of the child while it is at rest. If they are a
"right-sider", whose brain naturally has more activity taking place on that side, then
the child will respond by crying, whereas a "left-sider" does not necessarily seem
bothered by the absence of its mother. 14

So it becomes apparent that, in theory, it is possible to measure someone's happiness

from an objective point of view, but is there a link between how people describe their
own feelings and what the scans imply? If there were, then it would be possible to use
social surveys in order to gain the data needed for this dissertation.

Fig. i
From Richard Layard, Happiness: Has Social Science a Clue?, 2003 p.10.
14
R.J.Davidson, & N.A.Fox, Frontal Brain Asymmetry Predicts Infants’ Response to Maternal
Separation, 1989, Abnormal Psychology, 98, pp.127–131. (Cited in Richard Davidson, Toward a
Biology of Personality and Emotion)

14
 One experiment that could provide the necessary input, and supports how high
the correlation is between a person's description of their emotions and the results from
scanning, was carried out by Coghill et al. They placed hot pads of the same
temperature onto the legs of different subjects, and asked them to give the level of
pain they experienced, whilst their brains were simultaneously scanned for activity in
the cortex. Even though the reports from different people varied significantly, the
relationship between what each subject reported and results from the scans were
"highly correlated".15
Though not conclusive - human psychology is fraught with many paradoxes,
including masochism - from this experiment, it is possible to deduce that the stated
level of an emotion is suitably close to what the subject "actually" feels. This may
seem apparent at first, but many including Freud and Marx have discussed the concept
of a "false consciousness".
PET scans manage to offer a relatively good method in attempting to quantify
happiness, but they are not particularly practical when one's intention is to gain data
from a large test group that is representative of many different parts of the world. A
second method of measurement is "experience sampling", which is a mixture between
an objectivist stance and subjective measurement techniques.
Some of the leading figures in the area of hedonic psychology, such as
Kahneman and Csikszentmihalyi, use experience sampling in their research. The basic
principle is the idea that humans are not able to correctly interpret their own feelings
during a given length of time and that the judgments they make are often wrong.
Instead, the best way to measure someone's level of happiness is to ask him or her at a
specific moment, and then to record the average of a number of moments over an
extended period of time. A common method of doing this is to page someone at
certain intervals during their average day, as Csikszentmihalyi did for the research of
his book Flow.
Kahneman (who uses the term "moment utility" instead of "experience
sampling") also feels that this is one of the more successful methods of measurement
and even goes as far as to say that:

15
R. Coghill, J. McHaffie, and Y-F Yen, Neural Correlates of Interindividual Differences in the
Subjective Experience of Pain, 2003, (Cited in Richard Layard, Happiness: Lessons from a New
Science, p.20 & 277)

15
 "The quality of measurement may eventually be good enough to
attain measures of well-being and of misery that could serve the
needs of policy." 16

One of the main benefits of using experience sampling is that the “Pollyanna
Principle” does not affect the results. Psychologists Margaret Matlin and David Stang
developed the concept,17 and the main hypothesis is that people have a natural
tendency to perceive things in the most optimistic light, and furthermore, to remember
them from this point of view. In many ways this psychological process has numerous
evolutionary and biological benefits, for if one did not have a slightly positive
outlook, then it would be hard to motivate oneself to accomplish even the most basic
tasks. Additionally, the same tendency to recall pleasant memories, rather than
negative ones (and occasionally to alter the memory itself), may help to explain the
notion of nostalgia. In support of this principle, dozens of studies show that people are
naturally more optimistic than pessimistic, for example, in self-evaluation studies,
85% of people interviewed thought that they had better than average jobs.18
A second benefit to the experience sampling method is that it can allow for the
study of individuals' experiences in their "natural" environment through signaled
random assessments, predominantly by using a beeper, and asking the subject to
complete a small questionnaire about that particular moment.
The main drawback of experience sampling / moment utility measurement and
brain scanning is that neither of these methods have been applied on the scale that one
would need in order to draw the necessary conclusions for this work. Though in
future, they may well yield results that can be used on a more practical level.
The most common techniques that have been used in the past - techniques for
which a large mass of information is still to be studied - predominantly come from
social surveys, and nothing more scientific than asking people how they feel, though
this correlates very highly with other more objective methods of measurement. Unlike
moment utility, the researchers are usually more interested in someone's appraisal of
their "life-as-a-whole". An example from one of these surveys is Fordyce's
“Happiness Measure” (1988), which asks the respondents the following question:
16
Cited in Naina Chernoff, Memory Vs Experience: Happiness is Relative, 2002
17
Margaret Matlin and David Stang, The Pollyanna Principle: Selectivity in language, memory and
thought, 1979, Schenkman Books, Cambridge, Mas. (Cited in David Myers, The Pursuit of Happiness,
p.27)
18
J.D.Brown, Evaluations of Self and Others: Self enhancement biases in social judgments, 1986,
Social Cognition, 4, pp.353-376 (Cited in Michael Argyle, The Psychology of Happiness, p.52)

16
 "In general how happy or unhappy do you generally feel? From
‘Extremely happy’ (feeling ecstatic, joyous, fantastic), which
scores 10, to ‘Extremely unhappy’ (utterly depressed, completely
down), which scores 0" 19

The main criticism of such a survey is the problem of response biases, for example, an
immediate mood bias. One way around this "flaw" is to ask questions that infer a
specific length of time, even an entire lifetime. Though this brings the problem full-
circle to the one mentioned earlier; people's inability to correctly remember their past
experiences. It must also be mentioned that subjects are very likely to apply
simplifying heuristics 20 to the question of how happy they are. Most people naturally
answer certain questions without a moment's hesitation, and from the research that has
been carried out so far, it is clear that the average respondent does not spend a
significant amount of time contemplating the question that they have been asked.
Many scholars have suggested that this may be because the respondent is assessing
their well-being regularly without provocation, and hence, when asked, they already
have an answer. The finding that eight out of ten Americans contemplate their
personal level of happiness once a week supports this opinion.21
A second criticism of self-report methods is that the terminology and
understanding of a concept such as happiness is not the same across nations. Some
scholars (Argyle for example) believe that it is impossible to make cross-national
comparisons through the same study, whereas others, such as Veenhoven, Layard and
Diener, conclude that there is no language problem involved. They tend to refer to
studies where comparisons were made between two bi-lingual countries, or others that
used different terminology for the questions, yet found that the results were almost
identical. 22
As I agree with the findings of these scholars, which concludes that there is no
significant linguistic bias, for the purposes of this work, language criticism shall be
regarded as small, and not particularly important, though cultural differences relating
to response bias' e.g. whether or not one should state that they are happy, could cause
measurement dilemmas, and, as yet, there is no simple way to know for certain.
19
Cited in Michael Argyle, The Psychology of Happiness, p.8
20
See Daniel Kahneman et al., Well-Being: The Foundations of Hedonic Psychology, p.21
21
Ruut Veenhoven, Advances in Understanding Happiness, p.6
22
For a more detailed analysis see Ruut Veenhoven, Happiness in Nations: Subjective appreciation of
life in 56 nations, 1946-1992, RISBO Studies in Social and Cultural Transformation nr2, 1993

17
 The other often cited criticism of surveys and interviews relates to the
environment where they took place - context can have a drastic effect on how people
answer. For example, if the survey was undertaken in summer rather than winter, this
may alter the results as weather has a clear influence on our emotions.
The reason that data from such single question self reports and social surveys
will form the backbone of conclusions and insights provided in this work is that they
are by far the most widely used, and have accrued many times more information than
the other methods combined. This means that interview specific issues, such as the
weather, are no longer an issue, as averages can be taken from a very large number of
different surveys, thereby balancing out such discrepancies. In addition, though many
criticisms of the techniques employed are relatively well founded, they do not mean
that it is impossible to use the data to gain a better understanding. For example, if
everyone suffers from the same tendency towards a positive response bias, then the
gap between ratings is still a valid one.

Conclusion

It is clear that it is possible, in both a subjective and objective manner, to measure

happiness. The objective forms of measurement are based more on the "affective"
aspect of happiness (i.e. the present mood of the subject) and the social surveys use
opinions relating to the "cognitive" feature (i.e. evaluation of the "overall-satisfaction-
with-life"), which are vital even if they are not exactly perfect representations. Indeed,
the current opinions of someone, whether correctly averaged or not, I believe, are as
important, if not more so, than the results from techniques such as experience
sampling. This is because I am interested in the concept of raising someone's
subjective happiness through objective changes, and there is no reason to alter
policies if no one believes that they are any better off. This leads to the next chapter,
where I will more closely analyse the psychological constructs that are in play when a
subject makes an evaluation of their satisfaction-with-life.

W h a t P s y c h o lo g i c al P r o c e s s e s t a k e
place in relation to SWB?

18
The field of psychology is one of the key disciplines in the study of happiness and
many interesting opinions and speculations have been formed in relation to the way in
which the human brain works. Only the more relevant of these shall be discussed in
the next section, but they are indeed very important ideas, not least because many of
them threaten the assertion that it is possible to improve someone's subjective
happiness using objective methods because they imply that it is entirely relative.
There are four main theories / hypotheses that will be discussed, which though
interlinked, can still be broken into two areas:

1. Social Comparisons, Aspiration and Goal Related Processes

2. Homeostatic (or Set Point) Theory and Adaptation (The Hedonic Treadmill)

Social Comparisons (also known as Discrepancy Theory or Judgement Theory)

"Napoleon envied Caesar, Caesar envied Alexander, and Alexander,

I daresay, envied Hercules, who never existed. You cannot,
therefore, get away from envy by means of success alone, for there
will always be in history or legend some person even more
successful than you are." 23

As this quote from Bertrand Russell demonstrates, the effects of social comparison
are far-reaching and could indeed have a very strong impact on someone's personal
evaluation of their well-being. Many experiments support the common-sense
conclusion that humans hardly ever make absolute judgments, even if it were possible
for them to do so. Henceforth, all opinions are relative and subject to the comparisons
that we naturally make every day. A simple example of this would be the fact that
many people in Britain regard themselves as "poor", yet do not take into account their
place on what could be described as a "global rich list". If one were to hypothetically
take into account all other humans on this planet, the conclusion that someone earning
£10,000 a year could be poor seems very strange indeed.
In order to make these comparisons, most people look at the position of those
around them, their "reference group", who usually have the same personal
characteristics as themselves, for example; gender, level of education and

23
Bertrand Russell, The Conquest of Happiness, 1930, Reprint, London, Unwin Paperbacks (Cited in
David Myers, The Pursuit of Happiness, p.58)

19
profession.24 If this is true, then it may well explain why the wealthiest people in
Britain, according to their own opinion, are happier on average than the poorest
sections of society, as their reference group would be more likely to include those
with less money than themselves. The reverse applies to those at the other end of the
scale, whose reference group would undoubtedly include people with a higher
income.25
This lack of overall understanding is something that occurs again and again
within human psychology. The reason we use those around us a reference group is
because we are not able to comprehend anything larger or more complex, and we only
have very limited knowledge. I personally believe that in many different ways,
humans are not as intelligent as they would like to believe, and are entirely unable to
predict the effects of many of the actions that they take.
A pertinent example of this unpredictability, and the dangerous effects of a
sudden change in social comparison, occurred in 1999 when the king of Bhutan
decided to allow television into the country for the first time. As the people of Bhutan
abruptly felt the same pressures of advertising that the West have come to expect, and
became aware of the different standards of living across the globe, crime increased at
an astounding rate.26 It would be easy to explain this effect through other factors, if
not large-scale cultural differences, but the same effect took place in America in
1955.27
As with any form of comparison, the person one chooses to compare oneself
with is extremely important, though our society, especially the media, seems to
encourage comparisons with images of beautiful models and "successful" celebrities.
If one were to make a comparison with those who are nowhere near as fortunate as

24
Study by Clark and Oswald, with 10,000 British workers, the workers tended to make comparisons
with those "with the same personal characteristics" e.g. gender, education and job. (Cited in Bruno S.
Frey, Happiness and Economics, p.88)
25
The effects of this type of comparison can be very strong indeed, for example, Clark found that it
was "psychologically much easier" to be unemployed in an area of high unemployment, where those
around you are in the same position, than in an area of high employment. The fact that this applies with
something as basic and important as having a job is of particular interest.
See Andrew Clark, Unemployment as a Social Norm: Psychological Evidence from Panel Data, April
2003, Journal of Labour Economics, 21, pp.323-351 (Cited in Andrew Oswald, How Much do
External Factors Affect Well-Being? A Way to Use Happiness Economics to Decide, p.9)
26
See C. Scott-Clark, and A. Levy, Fast Forward into Trouble, 2003, The Guardian Weekend, June 14
(Cited in Richard Layard, Happiness: Lessons from a New Science, p.77)
27
See Karen Hennigan et al., Impact of the Introduction of Television on Crime in the United States:
Empirical Findings and Theoretical Implications, Journal of Personality and Social Psychology, 42,
pp. 461-77 (Cited in David Myers, The Pursuit of Happiness, p.58)

20
oneself, this would have a more beneficial effect on one's well-being. This is
illustrated by an experiment carried out by F. Strack, who found that when
accompanying a handicapped confederate who seemed to be on a kidney dialysis
machine, the well-being of the real subjects increased.28
In spite of this, I believe that there are many cases in which comparison makes
very little difference. When the issue is one of a physical or biological need, as appose
to a want (which is a construct of the mind), comparisons will have a marginal effect.
For example, if I was in a position of true starvation, it would not matter whom I
chose to compare myself with, for this would be unlikely to have an effect on my own
well-being. The theory only works after a certain level of needs have already been
met.

Aspiration level

A related hypothesis is the concept of well-being within a goal-orientated structure,

whereby one is only happy if they have achieved the goals that they had set
themselves previously.
University of Guelph researcher Alex Michalos devised the Multiple
Discrepancy Theory (1985)29, which contends that people use several different
standards in order to evaluate their satisfaction with life: (1) what it is that one wants,
(2) what those around them have, (3) their best previous experience (4) their
expectations for the next few years and their personal progress, (5) what they feel they
deserve, and (6) what they "need". In his opinion happiness can be defined as the gap
between what one has and what one would like.
If this were true, then it would seem that high aspirations and expectations are
detrimental to someone's happiness, depending on whether or not these goals are
realistic and achievable, which supports the mantra that there are two paths to
affluence: the first is to produce much, the second is to desire little. Michalos' model
could provide some extremely important points, as well-being is subjective by its very
nature. It seems to give some very clear guidelines as to what factors are taken into
account when someone is evaluating their own personal satisfaction.

28
F. Strack et al., The Salience of Comparison Standards and the Activation of Social Norms:
Consequences for Judgments of Happiness and Their Communication, 1990, British Journal of Social
Psychology, 29, pp.303-314 (Cited in Michael Argyle, The Psychology of Happiness, p.46)
29
A.C. Michalos, Multiple Discrepancies Theory, 1985, Social Indicators Research, 16, pp.347-413

21
 Additionally, the aspects of life that one values are very likely to be those that
will give one the most pleasure. If a person were to put a high value on their personal
relationships, then it is those same relationships, when successful, that will provide
him/her with the most happiness.
Also, although the process of evaluation, and the values used are personal, that
is not to say that they are entirely individual. A person's aspirations and goals are, in
my opinion, heavily influenced by the society in which he or she lives, and the
opinions of those around him or her. As Marx suggested in Wage-Labour and
Capital:

Our wants and pleasures have their origin in society; we therefore

measure them in relation to society; we do not measure them in
relation to the objects which serve for their gratification. Since they
are of a social nature, they are of a relative nature. 30

Homeostatic Theory (Also known as Set-Point Theory)

Richard Solomon has found that a negative emotion will seemingly always follow a
positive one, a fact that he puts forward under the title of an "opposing-process"
principle.31 This relates very closely to the biological and chemical evidence that can
never be omitted when discussing psychology. Just as it is not possible to destroy
matter, and everything must be completely balanced, as stated within the realms of
physics, chemistry and mathematics, it seems very likely to me that this would also
apply to some extent with the chemicals that are involved in the creation and
experience of emotions.
Homeostatic theory seems to tie in very closely with certain mental
"disorders", for example bipolar disorder, where a person moves from one extreme
(high) to the other (low) over a period of time, but it does not explain why so many
people suffer from long bouts of depression over the same extended time period,
without noticeably returning to a high, unless, perhaps, their set-point is naturally
lower in comparison to others. Another related subject is that of recreational, and to

30
Karl Marx, Wage-Labour and Capital, 1849, First Published: Neue Rheinische Zeitung, Nos. 264
-267 and 269
31
Richard Solomon, The Opponent-Process Theory of Acquired Motivation: The Cost of Pleasure and
the Benefit of Pain, 1980, American Psychologist, 35, pp.691-712. (Cited in Ruut Veenhoven, Is
Happiness Relative?, 1991, Social Indicators Research, 24, pp.1-34 )

22
some extent prescription, drugs, the vast majority of which work by releasing
dopamine or serotonin into the brain. Many drug users experience a hangover or
"downer" the day after they have taken the drugs, which may be regarded as the
balancing out of the biological / emotional equation. If there is indeed a range, or
scale, involved in ones feelings of happiness, then perhaps it is possible that if one
experienced an extreme high, one's range would become inextricably altered, and one
may subsequently fail to enjoy ordinary pleasures.
In relation to this evidence, Headey and Wearing 32, among others, believe in
the hypothesis of a set-point, or neutral position, to which our feelings will always
return, and that one emotion must balance its opposite in order to return to this level.
Additionally, some have argued that this set-point is at a different level for every
individual, and that it is heavily based on that person's genes. This would imply a
degree of inevitability toward one's personal happiness, yet there is good evidence to
support the influence of heredity, for example Lykken and Tellegen's study with 1400
pairs of twins 33. They estimated that the genetic make-up of the twins accounted for
48 percent of well-being, whereas family environment only accounted for 13 percent.

Adaptation

"It is the nature of desire to be infinite" 34

Closely related to the principle of an emotional set-point is the idea of adaptation. As

with any life form, human beings are constantly evolving, as they adapt to new
environments and stimuli. Harry Helson was the first to develop the idea of adaptation
in relation to behaviour 35, but since then Philip Brickman and Donald Campbell have
applied this to SWB, in their landmark essay Hedonic Relativism and Planning in the
36
Good Society . The vivid terminology they use is the concept of a "hedonic
treadmill", which can never truly be conquered. The conclusions then, are that any
32
B.W. Headey & A. Wearing, Understanding Happiness, 1992, (Cited in Bruno S. Frey, Happiness
and Economics, p.87)
33
D. Lykken & A. Tellegen, Happiness is a Stochastic Phenomenon, 1996, Psychological Science, 7,
pp. 186-189.
34
Aristotle, Politics, 350 BC, p.60 (Cited in Robert Lane, The Loss of Happiness in Market
Democracies, p.303)
35
Harry Helson, Adaptation-Level Theory: An Experimental and Systematic Approach to Behaviour,
1964
36
P. Brickman and D. T. Campbell, Hedonic Relativism and Planning in the Good Society, 1971

23
changes in well-being and "satisfaction-with-life" can only be fleeting, as one will
adapt to changes and create a new level of comparison. Most of the evidence for this
hypothesis is based on data from lottery winners and paraplegics, though it seems as if
the principle would also apply in less extreme situations.
One particular study at the University of Illinois found that able-bodied
students described themselves as happy 50 percent of the time, 22 percent unhappy
and 29 percent neutral. Disabled students, however, described a similar estimation of
happiness - within 1 percentage point.37 Daniel Kahneman discusses the same
principle in his interview with Chernoff:

"If you know a paraplegic personally, then you know it's very
bad one month after the accident and it's substantially less bad
one year after the accident, so there's a considerable amount of
adaptation...But people who don't know a paraplegic or a lottery
winner simply do not discriminate from one month from the one
year. They do not predict adaptation... Unless they know an
affected individual, people imagine the transition to the
condition or state, not the actual state itself. In essence, there is
confusion between being and becoming." 38

I find the confusion that Kahneman mentions very interesting because it would also
apply to someone's personal beliefs in relation to his or her wants and desires. If you
think that something you want will satisfy you, you may be right, but it is very likely
that you will only be satisfied briefly, and subsequently you will adapt to your new
state. As Kahneman suggests, this is unlikely to be a situation that you could have
previously predicted.
Though I agree with Aristotle's view that desire itself is infinite, I do not
believe that we must remain in a state of constant want. Instead, I hold the point of
view that our desires could be curtailed to some extent, and that this is possible only
through changing oneself. Though this may well be the case, it must be said that this
is not a path that many people living under a "Western" worldview choose to take,
and henceforth, for the purposes of this argument it shall be proposed that the
"hedonic treadmill" is a construct that could be applied to the majority of the Western
population. Indeed, this theory holds a lot of weight with happiness researchers and

37
K Chwalisz, E. Diener & D. Gallagher, Autonomic Arousal Feedback and Emotional Experience:
evidence from the spinal cord injured, Journal of Personality and Social Psychology, 54, pp. 820–828.
(Cited in David Myers, The Pursuit of Happiness)
38
Cited in Naina Chernoff, Memory Vs Experience: Happiness is relative, 2002

24
scholars, and has proved successful in explaining many of the contradictions that
surround the area.
The findings relating to adaptation have also led some, including Lykken &
Tellegen39 to deem happiness an entirely relative phenomenon, which does not depend
on objective circumstances at all. However, this argument does not seem particularly
strong under the scrutiny of empirical analysis. Bruno S. Frey cites many different
examples of the limits of adaptation in Happiness and Economics, including aircraft
noise, the loss of a child or spouse, and people who suffer from chronic or progressive
diseases40. In addition, if one were to take adaptation theory to its extreme, then it
would follow that any repeated or habitual stimulus would lose its ability to induce
pleasure, which I do not believe is the case. It depends on how often, and after what
circumstances the stimulus occurs. A good example of this is what Reuban Bulka
calls "denial for the sake of pleasure" 41, which is found within Jewish culture, and
illustrated by a particular custom whereby husband and wife do not have sex during
and for a week following menstruation. Such an intention leads David Myers to ask
the question: "Could exercises in deprivation educate us faster about all our
blessings?" 42
An additional flaw in the extended theory of adaptation put forward by
Lykken & Tellegen is that it relies on the subject completely forgetting past
experiences and opinions, however, as Shane Frederick and George Loewenstein have
presupposed:

"A prosperous individual who grew up in poverty may remain

perpetually delighted with her luxurious lifestyle if her memory of her
early days remains salient throughout her life" 43

Conclusion

39
D. Lykken & A. Tellegen, Happiness is a Stochastic Phenomenon, 1996, Psychological Science, 7,
40
Bruno S. Frey & Alois Stutzer, Happiness and Economics, p.87
41
David G Myers, The Pursuit of Happiness, p.64
42
Ibid., p.66
43
S. Frederick & G. Loewenstein, Hedonic Adaptation, p.319 (Chapter in Daniel Kahneman et al.,
Well-Being: The Foundations of Hedonic Psychology)

25
Many of these scholars disagree as to which of these processes are more significant in
a person's overall judgements, and some even choose to try to explain happiness by
using only one process. In my opinion, none of them are exclusive; they are all
intertwined in an extremely complex process whereby the individual mind is
constantly evaluating its own satisfaction and level of happiness. To try to simplify is
dangerous, and generalisations are unlikely to remain bona fide in the long term. I
think that all of these theories are too simple to fully explain the psychological
processes taking place by themselves, but they certainly help to illustrate the methods
a subject may use in the process of evaluation, and how their opinions will change
depending on other factors.
In conclusion, all of these different theories have one key element: they imply
that happiness and subjective well-being are relative. If this were indeed the case, then
there would be no significant reason to attempt to objectively increase the well-being
of as many people as possible. Most of these theories are resistant to criticism, but
they apply to a society and culture where our basic needs are easily met, and we are
more interested in the top of Maslow's hierarchy of needs than our biological ones. If
one were to concentrate on our basic needs, most of these theories begin to unravel,
and no longer apply to any great effect. Therefore I do not believe that happiness is an
entirely relative emotion, but one that relies heavily upon a certain level of wealth,
which is the topic of the next chapter. As stated in the introduction, I intend to analyse
the relationship between these two key themes, and explain, in relation to the
psychological processes, certain tendencies within that relationship.

What is the relationship between

Wealth and Happiness?

26
 "It therefore seems obvious that income and happiness go
together...Consequently, economics textbooks do not even make an effort
to come up with a reason, but simply state that utility U is raised by
income Y: U = U(Y), with U' > 0." 44

It is to some degree understandable how this particular structure and opinion is so

widely held by a large number of both economists and the Western public at large. In
a small survey that I carried out in order to study the opinions of those within my own
social circles, roughly 65% of respondents felt that money would indeed make them
happier. I would ask the reader to keep in mind that the survey was extremely small,
roughly 25 respondents, and the majority are students, with a middle class
background.45 In addition, a study conducted in 2003 by the national lottery
commission found that “67% of households had played the lottery at some time”, and
46
“41% reported playing the Saturday draw every week.” This would imply that a
very large number of the population believe that money will make a significant
difference to their personal well-being.
In order to provide an answer to the large and complex question of the nature
of the relationship between wealth and happiness, I have broken this chapter in four
parts, with each part proposing a particular question:

1. Are there any problems with the use of GNP to determine the welfare of a country?
2. Are those living in richer countries happier on average than those in the poorer
nations?
3. Does an increase in GNP per capita over time raise the average level of happiness?
4. Within a country, are those with a larger income happier than those with a low
income?

Are there any problems with the use of GNP to determine the welfare of a
country?

44
Bruno S Frey, Happiness and Economics: How the Economy and Institutions Affect Human Well-
Being, 2002, p.73
45
The questionnaire is [appendix .01]
46
Kerry Sproston, Report on Participation, Expenditure and Attitudes, National Lottery Commission,
2003, p.3

27
Because of the belief in the association between wealth and happiness, many
countries use Gross National Product as the basis for measuring the welfare of the
nation as a whole, so much so that Diener and Seligman were led to conclude that:

"Economics now reigns unchallenged in the policy arena, as well as

in media coverage of quality-of-life indicators." 47

The potential flaws in this opinion are well known: firstly, it can only measure goods
and services that pass through the market, and therefore does not take into account a
large part of social activities, for example, any services that have been "traded" within
a social group, perhaps a family unit. Secondly, environmental externalities are not
considered, which makes it possible for certain situations that would normally be
regarded as negative to actually raise the GNP of an area. An example of this effect
took place in Alaska during the Valdez oil spill.48 Additionally, spending which is
related to the problems of society, e.g. spending on crime and accidents will actually
add to GNP as if they were positives. Finally, and most significantly, wealth
distribution is omitted from measurement. This is a key issue, as relative income (as
already discussed in the last chapter) is an integral part of Subjective Well-Being.
Despite these problems, GNP continues to be the primary figure on which a country’s
welfare is based. This is not to say that it is insignificant. Few would argue that a
lower level of GNP would have no effect on the well-being of the public, but it must
be made clear that such a simplistic relationship between GNP and SWB, as
subscribed to by many politicians and neoclassical economists, is drastically flawed.

Are those living in richer countries happier on average than those in a poorer
nation?

There have been many studies that make comparisons between countries GNP per
capita and the average level of SWB stated by its citizens, but the conclusions made
47
Ed Diener & Martin Seligman, Beyond Money, 2004, p.2
48
Tom Horton, Redefining Progress, 2002, p.1

28
from these have been extremely varied. Correlations have been anywhere between
49
+.1257 (Mariano Rojas) and +.84 (Ruut Veenhoven) 50, with Diener and Biswas-
Diener estimating that the average correlation is roughly .60.51
Shown below is a graph that can provide some insight into why the
correlations may be so varied:

Fig. ii
Happiness and Income per head

The relationship seems to clearly match the hypothesis of money’s diminishing

contribution to happiness. (See appendices [.02] and [.03] for additional material to
support this) That means, as the nineteenth century economists believed, that the
happiness provided by a higher income is greatest when one is comparatively poor,
and will decline as one becomes richer. Though this opinion, and the data to support
it, is still queried, the majority of scholars (Bateman, 2003; Cummins, 2000; Diener
49
Mariano Rojas, The Multidimensionality of Poverty: A Subjective Well-Being Approach, p.8
50
Ruut Veenhoven, Happiness in Nations, 1993, p.50 (Cited in Robert Lane, The Loss of Happiness in
Market Democracies, p.61)
51
Diener & Biswas-Diener, Income and Subjective Well-Being, 2000, (Cited in Michael Argyle, The
Psychology of Happiness, p.137)
Fig. ii
From Richard Layard, Happiness: Lessons from a New Science, p.32 (Original Source: World
Bank, World Development Report. Real GDP per person per year in 1999, measured at purchasing
power parity in U.S. dollars)

29
and Seligman, 2004; Lane, 2000; Layard, 2005; Myers, 2000; Veenhoven, 1984)
agree with this conclusion. Furthermore, the diminishing returns helps to explain the
disparities in the data mentioned above, as the result will depend on the context in
which the study, or studies, took place. If they were conducted in a poorer area, then it
would seem likely that the correlation would be stronger, with the opposite effect
within a richer country.
Despite the concurrence on the diminishing relationship between wealth and
SWB, the reasons for this are still hotly debated, though there are some that the
author believes will have a significant effect. As the relationship seems to be more
pronounced at the lower end of the economic scale, it may be that wealth would have
a larger effect on SWB if the money provided the person in question with their basic
needs. This is, in my opinion, the main reason behind these findings, which
corresponds with the information provided by analysing the psychological processes
in the last chapter. It would be very likely indeed that if the level of one’s income
could amount to the difference between starvation and hunger, then it would have an
extremely strong input on a person's SWB. One may then argue that, from a
psychological point of view, if money was transferred from a richer person to a poorer
one, the poorer person would gain more happiness than the richer person lost.
If particular attention is given to the Western nations in the top right of the
graph, it becomes clear that GNP has little or no effect, for example, in all of the
studies that I have read, Ireland is always near the very top of the satisfaction scale,
whereas the comparatively richer Germany is significantly lower in relation to the
other European nations. I personally believe that this is a cultural effect, and
unfortunately any attempt to explain the reasons for prevailing cultural differences or
the collective psyche of different nations is far beyond the limitations of this, or
arguably any, piece of work.
Just as culture could play a large part, so too could the fact that the higher the
income, the better the health services of a country tend to be, human rights are more
secure, and the level of wealth distribution is arguably, but not always better. In fact,
virtually all social indicators, with a few exceptions, are more positive in the wealthier
nations.52
In addition, Inglehart has suggested that the reason that the correlation is weaker
in the "developed" nations is because these countries are at a stage where they have
52
Daniel Kahneman et al., Well-Being: The Foundations of Hedonic Psychology, p.439

30
developed more post-materialistic values.53 I must confess that I have little time for
this particular argument, but my opinion is only based upon personal experiences. In
comparison, I believe that the curvilinear relationship may also be closely related to
the political institutions of the countries in question - the nations with a higher GNP
also tend to have enjoyed the benefits of a long running and stable democracy. In
Happiness Prospers in Democracy (1999) and Happiness and Economics (2002),
Frey and Stutzer delve much deeper into the effects of political institutions with the
conclusion that:

"...the more developed (direct) democracy is, the happier the citizens
are. Moreover, our analysis suggests that the higher level of happiness
associated with more extensive democracy is partly due to the utility
produced by the political process itself, and not only due to favourable
political outcomes." 54

Unfortunately, the impact of the political process and it’s institutions cannot be
expanded upon much further within this work, but the findings of these and other
related works may be used in the conclusion.

Does an increase in GNP per capita over time raise the average level of
happiness?

53
Ronald Inglehart, The Silent Revolution: Changing Values and Political Styles Among Western
Publics, 1977 (Cited in Ruut Veenhoven, Conditions of Happiness, p.197)
54
Bruno Frey & Alois Stutzer, Happiness Prospers in Democracy, p.79

31
 Fig. iii
Income and Happiness Over Time (US)

In 1957 John Kenneth Galbraith published his extremely influential book The Affluent
Society. Since then the US's per capita income, in today's dollars, has risen from
$9000 to $20,000. Despite the doubling of income per person, the number of people
reporting themselves as "Very happy" (given a choice of "Not too happy", "Pretty
happy" and "Very happy") has actually dropped. The graph above applies to the US,
but the same findings have occurred elsewhere, including Japan and Britain (see
World Happiness Database [Online], the data for Britain [appendix .04] is statistically
not as strong as that for the US, which is why this graph was selected). To some this
evidence may seem surprising, but in relation to the last chapter, it fits the models of
social comparison and adaptation very well indeed. According to those theories, if
everyone's wealth were to increase by a certain percentage, over a long period of time,
then there would be very little difference made to their SWB, as the same levels of
comparison would still apply, and the people involved would adapt to their new level
of wealth, thereby making the difference almost inconsequential. Obviously, if it were
to happen over a very short period of time, for example a couple of weeks, it is
extremely likely that it would raise SWB drastically, but only temporarily. Happiness,
it would seem, has a very short half-life.

Fig. iii
Graph from David Myers, The American Paradox, 2000, p.137 (Original Source: Richard Gene
Niemi, John Mueller, and Tom W. Smith, Trends in Public Opinion: A Compendium of Survey Data,
New York, Greenwood Press, 1989)

32
 Interestingly, if there is a decrease in GNP, the effects on SWB are more
pronounced. An example of this is Belgium, where between 1978 and 1983 the
percentage of people who described themselves as "very satisfied" fell from 45% to
20%.55 This relates to a period of large-scale economic recession in the country, and
backs up the psychological point of view discussed by Kahneman et al. (1999), that
people put more weight on a loss than they do on a gain - roughly double according to
their research. This means that if we take an example of a subject who has gained, for
example £10,000, and this causes their SWB to increase by a value of +1, if the same
subject had actually lost £10,000, then the predicted decrease in happiness would
actually be higher, e.g. -2. This psychological phenomenon is referred to as loss
aversion.56

Within a country, are those with a larger income happier than those with a low
income?

"In microeconomics (the study of economics at the level of

individual areas of activity), the standard assumption is that,
other things being equal, more choices mean a higher quality
of life because people with choices can select courses of
action that maximize their well-being (Kahneman, 2003;
Schwartz, 2004; Varian, 1992). Because income correlates
with number of choices, greater income is equivalent to
higher well-being." 57

One may argue that those with more money should, in theory, have greater choice,
and thereby have the opportunity to maximise their personal well-being by making the
choices that will provide them with the most pleasure, but this relies upon two
circumstances: first, that the person's goals are to acquire things that can be bought,
and secondly, that purchasable things will yield happiness. However, as implied in the
section relating to GNP, it seems that as people obtain a higher standard of living, the
things that they crave cannot necessarily be bought.
In addition to these two circumstances, it must also be mentioned that a person
does not always act in a rational manner, despite the economist's suggestions, and will
not necessarily follow the choice that will provide them with the most happiness in

55
Michael Argyle, The Psychology of Happiness, 2001, p.181
56
Daniel Kahneman et al., Well-Being: The Foundations of Hedonic Psychology, 1999, p.17
57
Ed Diener & Martin Seligman, Beyond Money, p.2

33
the long term. A simple, yet effective, example of this would be smoking - in almost
every respect it could be regarded as an irrational behaviour and choice, and is
unlikely to add to someone's well-being over their entire lifetime, but despite knowing
this, a very large number of people start the habit.
Regardless of these points, the empirical evidence seems to support the view
that SWB will increase with a larger individual income. Although the relationship is
positive, it may also be subject to the law of diminishing returns, in much the same
way as discussed above. The graph below attempts to show the correlation between
income and well-being within the US. A curvilinear relationship could be noted, yet
the last point on the graph seems to break this pattern slightly.

Fig. iv
Income and Well-being within the US

The reasons given above may apply within a country in much the same way as they
do internationally, though the relationship seems slightly stronger and more linear.
Perhaps, as Lane discusses in The Loss of Happiness in Market Democracies (2000),
it is higher status, not higher income that increases well-being. This would seem
probable within a society such as the US, where money is indeed used as a symbol of
status. It provides a quantitative, and predominantly image-based method of
comparing oneself to others, and as discussed in the last chapter, comparisons are
Fig. iv
Graph from: Michael Argyle, The Psychology of Happiness, 2001, p.133 (Original Source: Ed
Diener, E. Sandvik, L. Seidlitz & M. Diener, The Relationship Between Income and Subjective Well-
Being: Relative or Absolute?, 1993, Social Indicators Research, 28, pp.195-223 )

34
used heavily in order to measure one's satisfaction. Furthermore, the collective culture
of the US, and to some extent the UK, would tend to accept the belief that the more
money one has, the more “successful”, and henceforth happier, one should be.
Additionally, and in support of the opinion that income related SWB is based
primarily on comparisons, Clark and Oswald found that actual income had no effect
on a person's job satisfaction; instead, it was based upon expected income.58

Conclusion

In conclusion to this chapter, and the questions concerning the relationship between
wealth and Subjective Well Being, a firm opinion has been formed - the relationship
is subject to the law of diminishing returns, and as such, each increment of additional
wealth will have less of an effect on a person's SWB than the one before. I am keen to
add that this may not apply to all cultures, but it is indeed the case within the vast
majority.
In addition to this, I would like to hypothesise that the SWB of a country's
citizens is based more on objective standards at the lower end of the economic scale
than at the top, and that as a nation becomes richer, the population's well-being will
take on a more relative status. For example, when one's needs are not met, it is
unlikely that comparisons will be a key factor, or that one will adjust to this situation,
but once they are satisfied, the more relative aspects of SWB will occur, for example,
issues of material, cultural, or even intellectual status.
If diminishing returns are indeed the norm, then there are many important and
controversial consequences, not least the undermining of one of the very bedrocks of
our own society, which pertains that greater wealth is a goal worth pursuing, both on a
micro and macro level. Particularly important are the findings that show over time our
increasing GNP is providing no improvement to the well-being of the public.
Controversially, it may be preferable not to increase the collective wealth of a nation,
as a downturn, like the one experienced in Belgium, would unquestionably have a
detrimental effect on the average SWB of the population.
In light of these findings, I would suggest that it is now time for Western
society and governments to reassess their collective goals and priorities, and to
change the emphasis from wealth accumulation, to improving the well-being of the
58
Andrew Clark & Andrew Oswald, Satisfaction and comparison income, 1996, Journal of Public
Economics, 61, pp.359-381 (Cited in Michael Argyle, The Psychology of Happiness, 2001, p.141)

35
public. As a conclusion to the dissertation, a review of possible means towards this
goal is discussed within the final chapter.

What Policy Changes are suggested in

relation to Happiness ?

This chapter will deal with the second goal proposed at the beginning of this work,
which was to use the findings of earlier chapters in order to suggest targets for the

36
future, and possible policy changes that would increase the Subjective Well Being
(SWB) of as many people as possible. Understandably that is a broad, and some might
say naïve, generalisation, but I believe that these are important issues, which are not
always given the weight or level of discussion that they deserve. The chapter is
broken into three sections: the first discusses issues of measurement and the collection
of SWB data, the second covers policies that could be implemented on a national
scale relatively easily, and the final one reviews a proposition that is unfortunately
matched in its significant capacity to improve SWB only by how unlikely it is to
occur.

SWB Data and New Standards of Measurement

In relation to the use of statistical information on SWB, there is still much more to be
achieved. First, the government should accept the fact that GNP is not a method of
measurement that can be used to judge the welfare of the population, and thus should
not be applied as if it were. Instead, data on well-being could be used to a much
greater extent, in addition to other social indicators, when discussing the "progress" of
a nation as a whole. Such a bold acceptance of a new yardstick might be regarded as
unlikely within the UK, but countries such as Canada and Brazil are beginning to
develop statistical data that follows in the footsteps of Bhutan, where Gross National
Happiness is in fact an official policy of government. 59
At the moment the UK government spends hundreds of millions of pounds on
60
measuring social and economic indicators , yet despite its obvious capability to
better inform policy-makers, well-being data is underused or omitted. A case study for
this would be unemployment. For example, one of the most prominent economic
theories regards unemployment as a choice, and thus attempts to compare the benefits
and costs of employment, (i.e. income and effort needed) against the benefits and
costs of unemployment, without taking into account the long term psychological
problems that can be caused. SWB data on the other hand, shows that one of the key
issues is actually the "lack of purpose" associated with not working. Therefore, the
effects could be alleviated through work-sharing schemes, or other policies whereby
the unemployed could earn their welfare.
59
Sander G. Tideman, Gross National Happiness: Towards Buddhist Economics, 2000
60
For example, the Office for National Statistics spent over £142 million in 2002/3 collecting social
and economic statistics - but this doesn't include costs from the Treasury or the Audit commission.
ONS, Annual Report and Accounts 2002-3, 2004, available online at www.statistics.gov.uk

37
 This is not to say that the research is flawless, as there are still many
improvements that need to be made to the measurement techniques. I would suggest a
full-scale set of measures, including experience sampling for a representative sample
of the population, and longitudinal tracking of SWB changes in a more controlled
fashion. It must be mentioned though, that existing and long-established indicators
such as GNP are also far from perfect, and additionally, all that is required for SWB
research to improve is more funding and greater political and public support.
In relation to future studies, one experiment that may be of interest to other
scholars in the field of hedonics, and that could have far-reaching results, would be to
attempt to improve the standard of living of a group of people in a controlled manner,
and to increase it step by step. For example, if one were born into a family who had an
extremely low standard of living (i.e. only enough food to survive) and slowly the
conditions improved over the years until one had a lifestyle equivalent to some the
richest people in the UK, would this "overcome" the effects of adaptation due to the
continually new stimuli? If so, then this would be a fascinating step in creating a
happier society for all. Unfortunately, the feasibility of such an experiment is
extremely unlikely, as there are many complications in such a proposal. Despite this, I
have attempted to describe what I believe would be the most realistic way to
accomplish this experiment in [appendix .05].

Proposed Changes to National Policies

There are a number of areas that, if revised, would offer the opportunity to enhance
the SWB of those involved, the least controversial or complex of which would be for
our schools and other institutions to provide information about the psychological
processes and other issues associated with happiness. This is based on the capacity for
some of the findings to alter the way in which one interprets and understands certain
aspects of their lives. For example, a better comprehension of one's absolute standard
of living, as apposed to an evaluation based on a reference group, can illustrate how
fortunate one may truly be, thus adding to the SWB of the subject.
Additionally, improved knowledge about psychological adaptation would
allow a person to make better decisions in relation to the purchase of certain items, as
they would then be able to more accurately anticipate how they may feel towards the

38
article in question at a later date, thereby choosing the option that will bring more than
merely a fleeting moment of enjoyment.
This suggestion may be regarded as too paternalistic, with the presumption
that those doing the teaching "know best", but I still feel it is worthy of discussion.
Perhaps such information could be included within Religious and Moral Education
classes, or other lessons regarding the issues of citizenship.
A slightly more complex recommendation, which is likely to have very strong
opposition, would be to use an "Optimum Progressive Taxation" system. This
proposal is derived from three separate findings: first, progressive taxation needs to be
reappraised for its ability to help keep a balance between work-life and personal-life,
in addition to minimising the "rat race" (i.e. working harder and harder in what is,
essentially, a zero-sum game). Second, public spending has greater gains for the
population's overall SWB than individual spending, and third, a higher level of
earning for some actually decreases well-being among others, due to social
comparisons.
If such a tax system is pursued, then a careful balance must be struck because:

"...as we do this we blunt the incentives facing both rich and poor.
Thus, as we raise the tax rate, the total size of the cake falls. So we
should stop raising the tax rate well before we reach complete
equality. The optimum is where the gains from further redistribution
are just outweighed by the losses from the shrinking of the cake." 61

With the introduction of this approach, possibly by implementing the work of Nobel
Prize winner James Mirrlees 62, one would expect a raise in the average SWB of the
population due to moneys diminishing returns in relation to happiness. In support of
this prediction, the Scandinavian nations have a very good level of income equality,
and score persistently high in cross-country SWB studies.
The final proposal is based on the studies by Bruno S. Frey and Alois Stutzer,
which examine the relationship between democracy and SWB. They provide key
evidence that a direct democracy can raise happiness levels through both the
experience of participating in the political process, and secondly, because the

61
Richard Layard, Happiness: Lessons from a New Science, 2005, p.136
62
See, for example, James Mirrlees, An Exploration in the Theory of Optimum Income Taxation, 1971,
Review of Economic Studies, 38, pp.175-208

39
decisions made by government are more closely linked to the wishes of their
constituents.
The majority of the data comes from Switzerland, which has a federal
structure and 26 cantons. The use of referenda in decision-making is relatively
common, but different cantons, on average, hold more than others, which allows for a
direct comparison, without cross-country issues. Through the creation of a "direct
democracy index", with a range of 1-6, it was found that a 1 point increase in this
index would raise the share of people describing themselves as "very satisfied with
life" by 2.8%. This indicates that the effects of democracy on SWB are a great deal
more significant than those of personal income.63 In fact, income itself was higher in
the more democratic cantons and in addition to this, the findings also illustrated that
the higher a canton stood on the "direct democracy index", the lower government
expenditure and revenues were in that area.64
Therefore, I would like to suggest that a federalist structure, with an emphasis
on decentralization of power and greater decision-making rights to the lower levels of
government, would be the best political system in relation to Subjective Well-Being.
Although, if one were to take the UK as a single example, a dramatic change towards
a federal structure would be more likely to decrease SWB than to raise it, as the
changes would be extremely disruptive. Instead, it would be preferable to give voters
an improved level of participation with a greater number of referenda on both a local
and a national level, and the ability to place issues in the political arena in the first
place. New forms of technology, for example voting by mobile and e-voting, could be
used for the local issues as there is less of a security issue at that level of governance.

Final Conclusion

The recent research in the field of Subjective Well-Being offers many promising new
possibilities, and so far the work has managed to cause serious ripples within the
economics establishment, with many economists beginning to see the opportunity for

63
Nick Donovan, Life Satisfaction: The State of Knowledge and Implications for Government, 2002,
p.30
64
Bruno S Frey, Happiness and Economics: How the Economy and Institutions Affect Human Well-
Being, 2002, p.139

40
innovative theories and models that take the psychological aspects of human nature
into account.65 In addition, others, such as Daniel Kahneman, are attempting to revive
Bentham's theories on Utilitarianism, under the premise that due to better, more
objective, forms of measurement, it is indeed possible to measure utility.
On a personal level, I believe that further analysis and support in this area
could help to provide a seismic shift in perspective, and the creation of a new
paradigm in Western society, where the focus of government and policy-makers shifts
from wealth accumulation to the increasing well-being of all.
In conclusion to this dissertation, the proposed national policy changes
mentioned above are realistic and achievable, and could be implemented in the near
future, but there is another suggestion that is much broader in its reach, more
complex, and considerably more pressing than these.
My final proposal - however unlikely - would be to concentrate on increasing
the social and economic progress of the "developing" nations, for instance, by making
alterations to the existing trade policies of the IMF and the World Bank. This point of
view is based on the cross-country data that provides strong evidence that economic
growth is subject to diminishing returns in relation to SWB on an international level.
Thus, additional increments of wealth in the West are having very little, or no,
noticeable effect on the average well-being of the citizens, but would undoubtedly be
more beneficial if used elsewhere. Two suggested amendments that would make a
significant difference are the ending of agricultural export subsidies by the EU and the
US, and a halt to the extensive liberalisation of foreign markets and the trade
conditions that favour western exporters over their poorer counterparts.
Despite what I believe should be a patently obvious decision, others may
choose to suggest a possible flaw in this proposal, and that is the fact that, as
discussed in the chapter titled "What is the Relationship Between Wealth and
Happiness?" a loss is given more psychological weight than a gain. Thus, it might be
that a level of unhappiness would occur in the richer countries if these changes were
implemented. In response to this, I would conclude that the overall benefits greatly
outweigh any costs incurred, both psychologically and economically, and that with a
careful management of the transition, the modifications do not need to have any
adverse effects in the West whatsoever. Additionally, if the primary aim is the famous
maxim of Utilitarianism, "the greatest happiness of the greatest number", then there is
65
For more information, see www.neweconomics.org

41
no better way to achieve this than to begin making these amendments to inter-
governmental policies.

APPENDICES

Appendix .01

SMALL-SCALE HAPPINESS SURVEY

42
1. On a scale of 1-10, how happy would you describe yourself in general?
2. What do you believe would make you feel happier overall?
3. What would you describe as the happiest event / section of your life so far?
4. Do you believe that our society has the right goals / aims?
5. Do you believe in the idea that by becoming rich, you are making other people
poorer?
6. Would you describe yourself as rich?
7. What is your rough yearly income? (optional)
8. What income per year would you describe as being rich?
9. If this was a global "rich" list, for every person in the whole world, which section
do you think that you fit into?
1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 20
0 1 2 3 4 5 6 7 8 9
Poor Rich
10. Do you believe that more money would make you feel happier? Why?
11. Do you play the lottery?
12. If you had an endless amount of money, what would you choose to do and why?
13. If you had a choice of 1. Being lonely and very wealthy, or 2. "Poor" with lots of
friends, which would you choose and why?
14. Do you believe that it is possible to be content?
15. Would you describe yourself as someone who generally feels content?
16. Did you vote in the last election? If not, why not?
17. Do you believe that we live in a truly democratic country?
18. If you had the chance to vote on specific legislation, would you?
19. Would you be happy to pay more in tax for a better education system, transport,
NHS?

(A copy of the results to this survey can be attained by contacting the author:
E-mail - ianlewiscrawford@yahoo.co.uk, Tel - 07709103431)

43
Appendix .02

Average Happiness and GNP / capita in the different parts of the world in 1975

From: Ruut Veenhoven, Conditions of Happiness, 1984, p.149

Source: GNP Data from the World Bank Atlas, 1977
Correlations: r = +.74, p<.001 when compared for the separate nations and South of
the Sahara Africa (N = 17); r = +.84, p<.01 when the parts of the world and Japan
were considered (N = 7)

44
Appendix .03

Life Satisfaction and Income levels across the world in the 1990s

From: Bruno S. Frey & Alois Stutzer, Happiness and Economics, 2002, p.10
Source: World Values Survey 1990-1993 / 1995-1997 (ICPSR 2790) and World
Development Report 1997.
Additional Information: The number of observations is 80,556.

45
Appendix .04

UK life satisfaction and GDP per capita 1973-1997

From: Nick Donovan, Life Satisfaction: The State of Knowledge and Implications for
Government, 2002, (Consultant Authors: David Halpern and Richard Sargeant)
Source: Eurobarometer Surveys

46
Appendix .05 - Description of methods suggested for "Standard of Living" study

If this experiment were to be attempted, the most plausible means I can suggest is to
work in collaboration with a exceptionally large corporate sponsor, preferably, but not
necessarily, one that already owns a small community area for some of it's employees
in a relatively poor part of the world.
The company, together with the scholars, would be responsible for hiring a
new group of staff whose present standard of living was as minimal as possible, and
as part of the interview procedure, extensive research (including SWB measurements)
would be conducted in order to analyse the suitability of the subjects. There are a few
reasons why a large employer would have to be used in an experiment like this:
First, and most important, a large employer has the ability to change the level
of affluence of their staff through their wages, without such alterations appearing to
be "hand-outs". Second, frequent health checks would allow for the collection of
SWB data whilst the subjects are kept unaware that they are part of an experiment.
Third, a very large employer may be able to provide specific accommodation for the
new group of staff, which would make social comparisons less of an issue, although
this particular aspect is not a definite requirement, as those conducting the experiment
should be able to control for this variable. Finally, a great deal of funding would be
required for an experiment of this magnitude, despite the fact that it would probably
have to take place in a "developing" country in order to keep costs down.
During the trial, the subjects would be given incremental wage rises and
bonuses, and possibly even be moved to a different area of housing at different stages.
Whilst these changes are taking place, regular SWB tests would provide the necessary
data to better understand the effects of an increasing standard of living, and would
hopefully offer evidence as to whether or not the subjects were experiencing a more
constant level of happiness, without the effects of adaptation.
Unfortunately, it would be impossible to conduct an experiment such as this if
the subjects were aware of their part in the study, which raises some serious moral
questions. I personally have made no conclusion as to whether or not the perceived
benefits outweigh the ethical problem of keeping the subjects "in the dark", but I do
feel that because their standard of living is being raised, and the overall goal is an
honourable one, perhaps the moral dilemma is not insurmountable. The important
point that I would like to make is that such issues must be contemplated beforehand.

47
 BIBLIOGRAPHY

Books

Argyle, Michael: The Psychology of Happiness - 2nd Edition, First

Published by Methuen & Co. Ltd. in 1987, 2nd Edition
published by Routledge, Sussex, 2001

Bstan-'dzin-rgya-mtsho: The Art of Happiness, Hodder and Stoughton Ltd,

(Dalai Lama XIV) London, 1998 (Consultant Author: Howard C. Cutler)

Csikszentmihalyi, Mihaly: Flow, First Published by Harper & Row, USA, 1992 2nd
Edition published by Rider, London, 2002

Frey, Bruno S.: Happiness and Economics: How the Economy and
Institutions Affect Human Well-Being, Princeton
University Press, Princeton and Oxford, 2002
(Consultant Author: Alois Stutzer)

Kahneman, Daniel (ed): Well-Being: The Foundations of Hedonic Psychology,

Russell Sage, New York, 1999 (Consultant Editors: Ed
Diener & Norbert Schwarz)

Lane, Robert: The Loss of Happiness in Market Democracies, Yale

University Press, New Haven and London, 2000

Layard, Richard: Happiness: Lessons from a New Science, Allen Lane

(an imprint of Penguin Books), London, 2005

Marar, Ziyad: The Happiness Paradox, Reaktion Books Ltd, London,

2003

Myers, David: The American Paradox: Spiritual Hunger in an Age of

Plenty, Yale University Press, New Haven and London,
2000

The Pursuit of Happiness - Who is Happy and Why,

The Aquarian Press, New York and London, 1993

Sahlins, Marshall: 'The Original Affluent Society', in Culture in Practice:

Selected Essays, Zone Books, New York, 2000, pp. 95
-139

Veenhoven, Ruut: Conditions of Happiness, D. Reidel Publishing

Company, Dordrecht, Holland, 1984

48
Essays

Simmel, Georg: 'On the Psychology of Money', 1889, in David Frisby

and Mike Featherstone (ed.), Simmel on Culture, Sage
Publications, London and New Delhi, 1997, pp. 233 -
243

Online Papers

Bateman, Tom: Happiness, Wealth and Corporate Social Responsibility,

May 2003

Davidson, Richard J.: Toward a Biology of Personality and Emotion, N.D.

Diener, Ed: Culture and Subjective Well-Being, June 2004,

(Consultant Author: William Tov)

Di Tella, Rafael: The Macroeconomics of Happiness, July 2002

Donovan, Nick: Life Satisfaction: The State of Knowledge and

Implications for Government, December 2002,
(Consultant Authors: David Halpern and Richard
Sargeant)

Dorling, Danny: Social Science, Public Policy and the Search for
Happiness (Consultant Author: Neil Ward) N.D.

Frey, Bruno S.: Happiness Research: State and Prospects, University of

Zurich, May 2004 (Consultant Author: Alois Stutzer)

Horton, Tom: Redefining Progress, July 2002

Hyman, Carol: Can Money Buy Happiness? UC Berkeley Researchers

Find Surprising Answers, June 2003

Leloup, Sandrine: When the Wealth Comes From the Happiness: or the
Good Chrematistic According to Adam Smith, N.D.

Oswald, Andrew: Well-Being Over Time in Britain and the USA, June
2002

Rojas, Mariano: The Multidimensionality of Poverty: A Subjective

Well-Being Approach, N.D.

49
Shah, Hetan: A Well-Being Manifesto for a Flourishing Society, New
Economics Foundation, September 2004 (Consultant
Author: Nic Marks)

Sproston, Kerry: Report on Participation, Expenditure and Attitudes,

National Lottery Commission, 2003,

Street, Paul: The Economy is Doing Fine, It's Just the People Who
Aren't (From "Doors of Perception" website), N.D.

Tideman, Sander G.: Gross National Happiness: Towards Buddhist

Economics, January 2001

Veenhoven, Ruut: Apparent Quality of Life in Nations: How Long and

Happy People Live, November 2003

Is Life Getting Better? Quality of Life in Modern

Society, July 2004

The Greatest Happiness Principle: Happiness as an Aim

in Public Policy, John Wiley and Sons, Inc. N.J, USA,
2004

Newspaper Articles

Gilchrist, Jim: Happiness is No Laughing Matter, The Scotsman (S2),

16th February 2005

Stuart, Julia: Dr Feelgood, The Independent Review, 3rd January

2005

Gunnell, Barbara: The Happiness Industry, The New Statesman, 6th

September 2004

Journal Articles

APS Observer (online)

Chernoff, Naina: Memory Vs. Experience: Happiness is Relative,

Volume 15, Number 5, May 2002

50
Economic Journal

Frey, Bruno S.: Happiness, Economy and Institutions, 110 (466

October), pp. 918-938, 2000

Eloquent

Szepesi, Stefan: Happiness and the Bonus of Freedom, Volume 7,

Number 3, April 2001

International Test Commission (ICT) Newsletter

Hubley, Anita M.: Assessing Quality of Life: An Interview with Four

Scholars, Volume 8, Number 1, pp. 1-10, June 1998

Journal of Happiness Studies (online)

Cummins, Robert A.: Personal Income and Subjective Well-Being: A Review,

Volume 1, pp. 133-158, March 2000

Easterlin, Richard A.: Is Reported Happiness Five Years Ago Comparable to

Present Happiness? A Cautionary Note, Volume 3, pp.
193-198, March 2002

Eckersley, Richard: The Mixed Blessings of Material Progress, Volume 1,

pp. 267-292, September 2000

Frey, Bruno S.: Happiness Prospers in Democracy, Volume 1, pp. 79-

102, October 1999 (Consultant Author: Alois Stutzer)

Hellevik, Ottar: Economy, Values and Happiness in Norway, Volume 4,

pp. 243-283, March 2003

Lane, Robert E.: Diminishing Returns to Income, Companionship and

Happiness, Volume 1, pp. 103-119, October 1999

Schyns, Peggy: Income and Satisfaction in Russia, Volume 2, pp.173-

204, January 2001

Varelius, J.: Objective Explanations of Individual Well-Being,

Volume 5, pp. 73-91, November 2003

Veenhoven, Ruut: The Four Qualities of Life, Volume 1, pp. 1-39,

December 1999

51
Psychological Science in the Public Interest

Davidson, Richard: Making a Life Worth Living: Neural Correlates of

Well-Being, N.D.

Diener, Ed: Beyond Money: Toward an Economy of Well-Being

[Uncorrected Proof], Volume 5, Number 1, 2004
(Consultant Author: Martin E. P. Seligman)

Lykken, David: Happiness is a Stochastic Phenomenon, Volume 7,

Number 3, May 1996 (Consultant Author: Auke
Tellegen)

Revue Québécoise de Psychologie

Veenhoven, Ruut: Advances in the Understanding of Happiness, Volume

18, pp. 29-74, 1997

Social Indicators Research

Hagerty, Michael R.: Wealth and Happiness Revisited, Volume 64, pp. 1-27,
2003 (Consultant Author: Ruut Veenhoven)

Veenhoven, Ruut: Is Happiness Relative? Volume 24, pp. 1-34, 1991

Is Happiness a Trait? Volume 32, pp. 101-160, 1994

Wealth and Happiness Revisited, Volume 64, pp. 1- 27,

2003

The Psychologist

Oswald, Andrew J.: How Much do External Factors Affect Well-Being? A

way to use happiness economics to decide, 2002

Veenhoven, Ruut: Happiness, Volume 16, Number 3, pp. 128-129, March

2003

52
Lectures

Lionel Robbins Memorial Lectures

Layard, Richard: Happiness: Has Social Science a Clue? March 2003

Websites

Journal of Happiness Studies Online: http://springerlink.metapress.com

World Database of Happiness: http://www2.eur.nl/fsw/research/

happiness/index.htm

GPI (Genuine Progress Index) Atlantic: http://www.gpiatlantic.org

Problems with, and alternatives to GDP: http://www.redefiningprogress.org

New Economics Foundation: http://www.neweconomics.org

Personal Website of Andrew Oswald: http://www.andrewoswald.com

Personal Web page of Richard Layard: http://cep.lse.ac.uk/layard/

Personal Web page of Ed Diener: http://www.psych.uiuc.edu/~ediener/

National Lottery Statistics:

http://www.natlotcomm.gov.uk/uploadedfiles/social_research_2003_pdf(3).pdf

53