Well-Being Reports: A Broader Economic Picture

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Decades of “Happiness” Research

Research suggests that increases or decreases in wealth are irrelevant when measuring levels of well-being. Image credit: Wayne Roddy

Research into the importance of measuring happiness in addition to financial factors has been going on for decades. Richard Easterlin, Professor of Economics at the University of Southern California, has been contesting the assumption that increases in income and employment were directly linked to happiness levels for 40 years.

This assumption discounts the credibility of financial statistics in presenting an accurate overview of the well-being of a nation.

According to Easterlin, “contrary to setpoint theory, life events such as marriage, divorce, and serious disability or disease do have lasting effects on happiness. Contrary to what economic theory assumes, more money does not make people happier.”

Easterlin argues that rises in, for example, salary, are unlikely to make a significant impact on the lasting happiness of an individual because “when their own income increases, so too does that of everybody else. This means the internal living level norms used to evaluate also increase.” He writes that “ mistakenly conclude that more money will make them happier. But it does not.”

Broader Spectrum of Economics

This is the theory supported in recent moves to include a broader spectrum of economics, including data on social factors, in an effort to paint a fuller picture of the reactions that economic events actually provoke. The next step, which will be hoped for by many, is the real integration of happiness indexes into central economic reporting. Currently, the ONS website homepage displays ever-updating figures in relation to GDP, unemployment rates, the retail price index, and consumer price index – in the future, will we see a well-being statistic added to the list?

Resources:

ONS. Measures of National Well-Being – Health. (2012). Accessed September 29, 2012.

ONSMeasures of National Well-Being – Where We Live. (2012). Accessed September 29, 2012.

Easterlin, R. The Economics of Happiness. (2006). Accessed September 29, 2012.

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