Three measures of well‐being Three measures of well‐being

(1)

ISQOLS 2009, Workshop on Policies for Happiness, July 19 – 23, Florence

Policies for Happiness f pp

Stefano Bartolini Stefano Bartolini

University of Siena

(2)

Question 1:

Does economic growth increase well‐being?

•Economic theory answers positively

• But the data do not: the Easterlin paradox

(3)

The Easterlin paradox:

well‐being does not increase with income growth.

h l

The US example

(4)

Three measures of well‐being Three measures of well‐being

• Happiness

• Life satisfactionLife satisfaction

• Objective data: mental illnesses, suicides,

l h li d b h h

alcoholism, drugs abuse, psychopharmaca, etc.

H i d lif ti f ti ll d

Happiness and life satisfaction are called Subjective Well‐Being (SWB)

(5)

Reliability of SWB Reliability of SWB

SWB i ll l t d t SWB is well correlated to:

• Assessment of the person’s happiness by friends and family members

• Assessment of the person’s happiness by her/his spouse

• Duration of authentic smiles (so called Duchenne smiles: this latter occur when the zygomatic major and obicularus orus latter occur when the zygomatic major and obicularus orus facial muscles fire, and humans identify this as ‘genuine smiles’).

• Heart rate and blood pressure measures responses to stress, and psychosomatic illnesses such as digestive disorders and headaches

• Skin resistance measures of responses to stress

• Electroencephalogram measures of pre‐frontal brain activity S i id

• Suicides

(6)

Health

(7)

Information

technologies

(8)

Travels

(9)

But

But ...

(10)

... !

economic growth seems to be associated to some undesirable side

…..economic growth seems to be associated to some undesirable side- effects on well-being

(11)

Moreover: US work hours increased in

the last decades

(12)

(13)

Question 2:

Why did the US hours worked increased?

•Hours worked increased in the US in the last 30

•Hours worked increased in the US in the last 30 years while they decreased in most EU countries

• Currently Americans work more than

Europeans. They work longer hours and their holidays are shorter. Until the ’60s it was the opposite.

opposite.

(14)

(15)

The Easterlin paradox becomes more paradoxical

•Why do Americans work more if more money

•Why do Americans work more if more money does not make them happier?

• Two studies try to answer using data from 1975‐2004 The data come from the General 1975 2004. The data come from the General

Social Survey, the most important survey on US socio economic phenomena

socio‐economic phenomena

(16)

Trend in US happiness Trend in US happiness Trend in US happiness Trend in US happiness

Stevenson and Wolfers 2008, GSS data

(17)

Question 1:

Wh A i i i l h ?

According to Bartolini Bilancini and Pugno (2008)

Why are Americans increasingly unhappy?

According to Bartolini, Bilancini and Pugno (2008), the trend of US happiness is explained by 4 forces that drive such a trend in opposite directions

that drive such a trend in opposite directions

 Increase in income

 S i l i

 Social comparisons

 Decline of relational goods

 Decline of trust in institutions

(18)

Social comparisons Social comparisons

A i i i h i i i ll b i b

• An increase in income has a positive impact on well‐being but an increase in the income of other people offsets about 2/3 of such an impact

• Mr. Jones compares what he owns with what is owned by p y other persons, said reference groups. Having a lot may seem little to Mr. Jones if those he compares himself to, have more

• Growth raises happiness if what matters for happiness is to pp pp have a bigger car, not if what matters is to have a bigger car than your neighbour

(19)

The decline of relational goods and of trust in institutions

Probit (# is OLS) Time Coeff. Probit (# is OLS) Time Coeff.

Trends in US Social Capital (GSS, 1975-2004)‏

Married -.030*** Other Groups -.004**

Separated .038*** #other Groups -.001**

Divorced .003

General trust 015*** Confident in banks 024***

General trust -.015*** Confident in banks -.024***

People unfair .010*** Confident in companies -.006***

People helpful -.006*** Confident in org. religion -.023***

Monthly with relativesy -.001 Confident in education -.024***

Monthly with neighbors -.015*** Confident in executive -.007***

Monthly with friends .006*** Confident in universities -.010***

Monthly at bar -.009*** Confident in press -.045***

1-2 Puntnam's Group -.010*** Confident in medicine -.020***

3+ Puntnam's Groups .002 Confident in television -.030***

#Putnam's Groups -.003** Confident in sup. court .0002

1 Ol ' G 008*** C fid t i i i 003***

1 Olson's Group -.008*** Confident in in science -.003***

2+ Olson's Groups .004 Confident in congress

#Olson's Groups -.001** Confident in military forces .016***

-.020***

(20)

(21)

The Impact of Relational Goods on Happiness

Happiness

OLS Estimation Coefficient t-stat

Female 0.01 0.57

Age -0.01 -3.13

Age square 0.00 3.13

Black 0 11 3 71

Black -0.11 -3.71

Other non-white 0.00 -0.06

% Diff, Regional price index -0.05 -1.24 Ln household income/1000 0 07 6 01 Ln household income/1000 0.07 6.01 Ln Reg-Age-Race Income/1000 -0.04 -1.77

Household size -0.02 -2.50

Y f d ti 0 00 0 31

Years of education 0.00 0.31

Retired 0.02 0.63

Unemployed -0.19 -3.90

Keeping house 0.03 1.18

Student 0.07 1.28

Other -0.11 -1.42

Parents divorced or separated -0.02 -0.51 Living with own parents at 16 0.00 -0.05

(22)

Type of SC OLS Estimation Coefficient t-stat

Married 0 1870 6 93

Married 0.1870 6.93

2nd+ Marriage 0.0274 1.05

Separated -0.0675 -1.93

Divorced -0.0298 -0.55

Widowed -0.1106 -2.67

Number of Children 0.0053 0.86 Non-Instrumental Monthly with relatives 0.0440 2.73 Relational SC Monthly with neighbors 0.0392 2.34 Monthly with friendsy 0.0421 2.53 Monthly at bar -0.0551 -2.54 Others can be trusted 0.0137 0.77

Others are helpful 0 0671 3 62 Others are helpful 0.0671 3.62 Others are unfair -0.0536 -2.65 Member of 1 or 2 P-Groups 0.0393 2.12

M b f 3+ P G 0 1011 4 29

Member of 3+ P-Groups 0.1011 4.29 Purely Instrumental Member of 1 O-Group 0.0133 0.70 Relational SC Member of 2+ O-Groups -0.0485 -1.69

(23)

The Impact of Trust in Institutions on Happiness pp

Type of SC OLS Estimation Coefficient t-stat Very confident in banks 0.0777 3.74 Very confident in companies 0.0937 4.68 Very confident in org. religion 0.0158 0.82 Very confident in org. religion 0.0158 0.82 Very confident in education 0.0758 4.01 Very confident in executive 0.0529 2.19 Ver confident in org labor 0 0439 1 49 Very confident in org. labor 0.0439 1.49 Non-Relational Very confident in press -0.0120 -0.55

SC Very confident in medicine 0.0039 0.22

Very confident in television 0.0058 0.23 Very confident in supreme court 0.0048 0.26 Very confident in scientificy -0.0055 -0.31 Very confident in congress 0.0088 0.33 Very confident in military forces 0.0116 0.62

Year Dummies YES

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Accounting for the Happiness Trend

I showed that SC is DECLINING and BENEFICIAL

Next step: to compute the impact of each variable over the Ne s ep: o co pu e e p c o e c v b e ove e period 1975-2004, i.e.

Δh = α(X₂₀₀₄- X₁₉₇₅)

α is the vector of coefficients, X₂₀₀₄ and X₁₉₇₅ are vectors

t i i l f i 2004 d

containing average values of regressors in year 2004 and 1975

(25)

Accounting for the Happiness Trend

Disaggregation of Happiness Variation in 1975-2004

Groups of Regressors Partial Sums Type of SC Demographics -0.0075 -0.0075

Ab l t I 0 0910

Impact on h Absolute Income 0.0910

Relative Income -0.0620 0.0290 Income Other Socio-economics 0.0135 0.0350 All non-SC Marital Status & Children -0.0309

Social Contacts -0.0003

T i I di id l 0 0091 N I

Trust in Individuals -0.0091 Non-Instr.

Putnam's Group -0.0025 -0.0428 RSC

Olson's Group -0 0006 -0 0434 RSC

Olson s Group 0.0006 0.0434 RSC

Confidence in institutions -0.0061 -0.0495 All SC Predicted variation -0.0145

Observed Variation -0.0192

(26)

Why are Americans increasingly unhappy? The answer

h i i f

The negative impact of:

• Social comparisons

• Decline of relational goods

• Decline of trust in institutions

more than offset the positive impact of the more than offset the positive impact of the

increase in income

(27)

Relational goods matter Relational goods matter

• If relational goods had remained at their 1975

• If relational goods had remained at their 1975 level, happiness might have substantially

i d

increased About 10% !

This is the growth rate of household income

needed to compensate for the happiness loss p pp due to the decline in relational goods

(28)

Lessons for measuring well being Lessons for measuring well‐being

•The purchasing power, measured by GDP, is one component ofp g p , y , p well‐being but is not all that matters

•The quality of relational experience cannot be purchased but is important for well‐being

•A credible indicator of well‐being must also take into account the relational goods

(29)

Question 2.

Why do Americans work more?

B li i d Bil i i (2008) h h Bartolini and Bilancini (2008) show that:

• Being poor in relational goods causes longer work hours

• The reason is that individuals turn to work and money to compensate for poor relational conditions

compensate for poor relational conditions

• Those poor in time develop poor relationsThose poor in time develop poor relations

• This is a vicious circle. Relational poverty causes time poverty and the latter causes relational poverty

and the latter causes relational poverty

(30)

Why do Americans work more? An answer

Th i i h k d i th t

• The increase in hours worked in the past 30 years has been influenced by the y y

decline of relational goods. In turn, these latter has been influenced by the

latter has been influenced by the

increase in hours worked

(31)

First conclusion:

Why Americans work more if more

d t b th

money does not buy them more happiness

happiness

• The decline of relational goods played a role in the decline of the average

role in the decline of the average

American’s happiness and in the increase

of her hours worked

(32)

Social poverty vs economic prosperity ?

Social poverty vs. economic prosperity ?

• The average American is increasingly poor in relations, time, trust in institutions and well‐, , being. These data are the symptom of a social crisis

crisis

• However the growth rate of US GDP has been the highest in 1980‐2000 among the big

the highest in 1980 2000 among the big western contries (UK excluded)

(33)

Relational poverty as a cause of economic growth The Negative Endogenous Growth (NEG)g g ( )

(Bartolini and Bonatti 2003 and 2008)

We can defend ourselves from the deterioration of relational and We can defend ourselves from the deterioration of relational and environmental goods by purchasing some goods

To finance these defensive expenditures we must work and produce To finance these defensive expenditures we must work and produce more. That is to say, we must increase the GDP

Economic growth, however, may cause the deterioration of relational and environmental goods

NEG is a vicious circle: environmental and relational deterioration fuel economic growth which in turn feeds deterioration

NEG is undesirable from the viewpoint of well‐being. Private wealth is fueled by the deterioration of the common goods.

(34)

P i t Private

wealth

(35)

Common Common

poverty

p y

(36)

NEG models predict:

• The worse is the trend of relational goods

• The higher will be the growth rate of GDP

• The worse will be the trend of hours worked

• The worse will be the trend of well‐beingThe worse will be the trend of well being

(37)

Do NEG processes matter?

Some international comparisonsp

GDP th t 1980 2000

C t

Average GDP annual th %

GDP growth rates 1980‐2000

Country growth %

United States 2,015958

United Kingdom 2,030543

Italy 1,891657

France 1,843757

Germanyy 1,918091

Netherlands 1,926773

Sweden 1 768505

Sweden 1,768505

Denmark 1,633376

(38)

Trends of relational goods 1980‐2000 (Sarracino 2008)

0 0 0 0 0

Trust ‐ Uk

0 0 0 0

‐0,1 0

w1 w2 w3 w4

‐0,3

‐0,2

Mean values

‐0 5

‐0,4

Mean values

Demographic controls Familiar status Education

‐0,588

‐0,626

‐0,642

‐0,66

‐0,646

‐0,596

‐0,644

‐0,6 0,5

‐0,743

‐0,8

‐0,7

(39)

Trends of relational goods 1980‐2000

Putnam's group ‐ Uk

0,224 0,185 0,2

0,4

0 0 0 0 0

w1 w2 w3 w4

‐0,4

‐0,2 Mean values

‐0,669

‐0,6

‐0,776

‐0,786

‐1

‐0,8

(40)

Happiness trends 1980-2000

Happiness ‐ Uk

0 0 0 0

‐0,05 0

w1 w2 w3 w4

‐0,1

Mean values

‐0,206

‐0,182

‐0,183

‐0,2

‐0,15

Demographic controls Familiar status

‐0 297

‐0,232

‐0,272 0 3

‐0,25

Education

0,297

‐0,32

‐0,313

‐0,35

‐0,3

(41)

Results: social capital trends in Europe Trends of relational goods 1980‐2000

Trust ‐ Germany

0,359 0,368 0,35

0,4

0,231 0,29 0,25

0,3

Mean values

0,15 0,2

Mean values

0,05 0,1

0 0 0 0 0

w1 w2 w3 w4

(42)

Putnam's group ‐ Germany

1,098 1,1

0 948 0 948 1 1,01

1,2

0,948 0,948

0,8

Mean values

0,522 0,535

0,4

0,6 Demographic controls

Familiar status Education Economic 0,366

0,369 0,292 0,2

,

0 0 0 0 0 0

w1 w2 w3 w4

(43)

Results: SC & SWB trends in Europe

Happiness trends 1980-2000

Happiness ‐ Germany

0 142 0,171 0,163

0,147 0,164

0,159 0,16

0,18

0,142

0 1 0,12 0,14

Mean values

0,06 0,08

0,1 Mean values

0,02 0,04

,

0 0 0 0 0

w1 w2 w3 w4

(44)

Trust ‐ Italy

0,399 0,397 0,411 0,414 0,4

0,45

0,28 0,306 0,299 0,317

0 25 0,3 0,35

Mean values

0,15 0,2

0,25 Mean values

0,05 0,1 ,

0 0 0 0 0

w1 w2 w3 w4

(45)

Putnam's group ‐ Italy

1,145 1,233 1,2

1,4

0,808 0,841

1,015 1,035

0,8 1

Mean values

0,619 0,623 0,6

Mean values

0,2 0,4

0 0 0 0 0

w1 w2 w3 w4

(46)

Happiness trends 1980-2000

Happiness ‐ Italy

0,356 0,38

0,346 0,327

0,33 0,35

0,4

0,258 0,29 0,307

0,25 0,3

Mean values

0,15 0,2

Mean values

0,05 0,1

0 0 0 0 0

w1 w2 w3 w4

(47)

Trust ‐ France

0 0 0 0

0 05 0

w1 w2 w3 w4

‐0,1

‐0,05

Mean values

‐0,15

Mean values

‐0,195‐0,19

‐0,2

‐0,228

‐0,25

(48)

Putnam's group ‐ France

1,197

1,297 1,2

1,4

1,045 1,031 0,99

0,966 0,93

0,862

0,949 0,998

0,8 1

Mean values

0,6

Demographic controls Familiar status Education Economic

0,2 0,4

0 0 0 0 0 0

w1 w2 w3 w4

(49)

Happiness trends 1980-2000

Happiness ‐ France

0,701 0,746 0,7

0,8

0,502 0,564 0,5

0,6

Mean values

0,302 0,309 0,3

0,4

Mean values

0,193 0,224

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(50)

Trust ‐ Sweden

0,481

0,527 0,481

0,528 0,5

0,6

0,397 0,407

0,375 0,393

0,481 0,481

0,4

Mean values

0,234 0,235 0,2

0,3

Mean values

0,1 ,

0 0 0 0 0

w1 w2 w3 w4

(51)

Putnam's group ‐ Sweden

3,039 3,036 3,032 3,038 3,086 3

3,5

2 2,5

Mean values

1,218 1,219 1,192 1,193 1,208 1,5

Demographic controls Familiar status Education Economic

0,5 1

0 0 0 0 0 0

w1 w2 w3 w4

(52)

Happiness trends 1980-2000

Happiness ‐ Sweden

0,633

0,607 0,633

0,608 0,6

0,7

0,463

0 393 0,461

0 393

0,464 0,465 0,4

0,5

Mean values 0,393

0,236 0,393

0 229 0,3

Mean values

Demographic controls Familiar status Education 0,229

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(53)

Trust ‐ Denmark

0,645 0,723 0,721 0,7

0,8

0,579 ,

0,5 0,6

Mean values

0,344 0,345 0,3

0,4

Mean values

0,201 0,238

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(54)

Putnam's group ‐ Denmark

1,703 1 572

1,735 1 573

1,772 1 572

1,774 1 573 1,6

1,8 2

1,551 1,572 1,573 1,572

1,299

1,573

1,2 1,4 1,6

Mean values

0,8

1 Demographic controls

Familiar status Education Economic

0,2 0,4 0,6

0 0 0 0 0 0

w1 w2 w3 w4

(55)

Happiness trends 1980-2000

Happiness ‐ Denmark

0,685 0,687 0,7

0,8

0,518 0,545 0,511

0,5 0,51 0,6

Mean values 0,416

0,433

0,3 0,4

Mean values

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(56)

Trust ‐ Netherlands

0,74 0,678 0,682 0,7

0,8

0,619

0,5 0,6

Mean values

0,349 0,417 0,401 0,401

0,3 0,4

Mean values

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(57)

Putnam's group ‐ Netherlands

2,088 2,003 1 986 2,005 2

2,5

2,003 1,986 2,005

1,5 2

Mean values 1,308

1,259 1,239 1,24 1

Mean values

0,5

0 0 0 0 0

w1 w2 w3 w4

(58)

Happiness trends 1980-2000

Happiness ‐ Netherlands

0,60,607 0,6

0,7

0 391 0,397

0,445 0,475

0,476

0,4 0,5

Mean values

0,373 0,391

0,397

0,3

Mean values

0,1 0,2

0 0 0 0 0

w1 w2 w3 w4

(59)

Source: Stevenson and Wolfers 2008

(60)

Trend in US happiness Trend in US happiness Trend in US happiness Trend in US happiness

Source: Stevenson and Wolfers 2008, GSS data

(61)

Does the NEG process matter in US growth?

Summarizing: USA (and UK) compared to continental Summarizing: USA (and UK) compared to continental

Europe exhibit:

• More economic growth

I i d i h

• Increasing vs. decreasing hours worked

D i i i l ti l

• Decreasing vs increasing happiness

• Decreasing vs. increasing relational goods (Sarracino 2008)

Conclusion: this picture is consistent with NEG Conclusion: this picture is consistent with NEG

• Decreasing vs. increasing happiness

Prudence: only descriptive statistics, scarcity of comparable data on Prudence: only descriptive statistics, scarcity of comparable data on

relational goods relational goods

(62)

The “guard labor”

(B l d J d JDE 2006) (Bowles and Jayadev JDE 2006)

• The guard labor is a measure of the disciplinary apparatus of a society

apparatus of a society

• It counts labor resources allocated to preventing, controlling, punishing, indesirable behaviours by g, p g, y others

• Work monitors, police, private security guards,

i l d k ili l

prisoners, unemployed workers, military personnel.

• Guard labor is a typical defensive expenditure. It is mainly a response to declining trust

mainly a response to declining trust

(63)

Why GDP may grow?

The evolution of “guard labor” in the US

Guard labor

25%

30%

of the Labor Guard labor

15%

20%

Percentage o

10%

15%

Labor as a P

0%

5%

1890 1929 1948 1966 1979 1989 2002

Guard L

1890 1929 1948 1966 1979 1989 2002

Guard labor

Guard labor without unemployment Gua d abo t out u e p oy e t

Percentage of “guard labor” on the labor force 1890-2002

(64)

Notice:

• The result does not depend on the military

l i i l h 1/3 h i

personnel: now it is less than 1/3 than it was 30 years ago

• Defensive expenditures are under‐estimated:Defensive expenditures are under estimated:

monitoring technologies, protection technolo ies e en la ers

technologies, even lawyers

(65)

Guard labor: international comparisons p

30%

20%

25%

abor Fo

15%

20%

rd Labor/La

5%

aGur 10%

0%

5%

zera nda ezia rca egia tria allo alia nda nda ada lgio alia nda gna nito niti ecia

Svizz Islan Sve Danima Norve Aust Portoga Ita Olan Irlan Cana Bel Austra Nuova Zela Spag Regno Un Stati Un Gre

N

Source: Bowles and Jayadev, 2006

(66)

C l i NEG d GDP Conclusion: NEG and GDP

 To use GDP as an indicator of well‐being can

i l l b d if GDP i b

seem particularly absurd if a GDP increase can be the consequence and the cause of social and

i l d

environmental decay

(67)

GDP d i l d l GDP and social models

To question GDP is to challenge an economic and social model seen by many as the example to follow: the USA.

(68)

THE CURRENT CRISIS

Buying alone

The Making of the American Consumer as the The Making of the American Consumer as the

Prologue to the Current Crisis

(69)

The answered question The answered question

M l h i Wh did i i i ll

Many analyses try to answer the question: Why did an initially small and localized default crisis (sub‐prime mortgages in US) become a dramatic global financial crisis?g

The answers generally focus on credit supply:

• The abundance of capitals inflows in the US coming from abroad which determined a credit bubble and financed a consumption boom

consumption boom

• The lack of transparency of the default risk implicit in

structured assets derived from the securization of mortgages structured assets derived from the securization of mortgages and loans

(70)

Credit demand?

• Americans lived for a quarter of a century beyond their possibilities. Mortgages and y p g g

credit cards were the way Americans bought bigger and nicer houses and more

bigger and nicer houses, and more

consumption goods, than those that they could have afforded

could have afforded

• Credit demand was driven by consumption demand

• So there is still an unanswered question

(71)

The overlooked question 1 The overlooked question 1.

Wh h d i A i l

• What have driven Americans to accumulate an enormous debt, in order to finance their

consumption which was already the most affluent of consumption, which was already the most affluent of the world – even without deeply going into debt ?

• In other words the favourable credit supply

• In other words, the favourable credit supply

conditions were necessary but not sufficient to generate the current crisis

generate the current crisis

• Still we have to explain what boosts consumption demand in an (increasingly) affluent economy

demand in an (increasingly) affluent economy

(72)

The overlooked question 2 The overlooked question 2.

h d i i di id l i

• What drives individuals to consumption

bulimia, sacrificing collective infrastructure, environmental and social assets, human

relations, leisure, in economies that grow ever more affluent and productive?

• More than that: this consumption bulimia was financed by going deeply into debt namely

financed by going deeply into debt, namely sacrificing future living standards

(73)

Some temptative answers to the overlooked question

• Increasing Inequality

Ad i (K h )

• Adaptation (Kahneman)

• Social comparisons

• Negative Endogenous Growth (NEG) Negative Endogenous Growth (NEG)

(74)

NEG answer NEG answer

• NEG describes consumerism as fuelled by the decline in common goodsg

Th f id bl A i i

• The formidable American consumerism may have been driven by the decline in American relational goods (Buying Alone)

• In a society of lonely people consumption provides identity: “I buy, hence I am”

(75)

Which target for increasing well‐being?

• Our efforts are currently concentrated on economic growth g

• The passage from GDP to more meaningful indicators of well being is one of the steps indicators of well‐being is one of the steps

towards a reallocation of our efforts towards a f l

more meaningful target

• Relational goods seem to be a good candidateRelational goods seem to be a good candidate for being such a target

S ld id id thi

• Some world‐wide evidence on this

(76)

Conclusive evidence on the Easterlin paradox

• The strongest evidence on the Easterlin g paradox (Easterlin and Angelescu

2009):

• SWB and income are related but unrelated in the long run in:

long run in:

– developed countries developing countries – developing countries – all countries together

(77)

Easterlin and Angelescu’s analysis

Happiness & GDP for all countries (15 years)

Mex

.04ss

N = 19 R2 = 0.15

2.03of happines

Y = 0.015 ‐

0.00001X (1.71) (‐1.23)

01.02age growth

t‐stat in parentheses

Bel

Ire Swe USA

Can Den Chile

Esp

FinKorRep uk

Ger Arg

ItFr

Net Jap

0.0avera

China

0 200 400 600 800

trend of GDP pro capite (PPP 2005 international dollars) Ehapr Linear prediction

(78)

Happiness and relational goods in the long‐run

• What happens in this kind of regressions when income is substituted by relational y goods as independent variable? (Bartolini, Bilancini and Sarracino (2009)

Bilancini and Sarracino (2009)

• The measure of relational goods: individual membership in at least one group or

membership in at least one group or association

(79)

Happiness & relational goods All countries

Mex

04

All countries

N = 19

.03.0ppiness R2 = 0.53

Y = 0.0001 + 0 740X

.02rowth of hap 0.740X (0.09) (2.30) t‐stat in parentheses

Bel Ire

USA Swe Can Den Chile Esp

KorRep Fin

uk Ger

Arg Fr It

Net

Jap

0.01average gr t stat in parentheses

China

-.01

02 01 0 01 02 03

-.02 -.01 0 .01 .02 .03

average growth of group membership Ehapr Linear prediction

d d t i bl th t f h i

dependent variable = average growth rate of happiness

independent variable = average growth rate of membership in associations unit of observation = country

time span= at least 4 waves

(80)

Easterlin and Angelescu’s analysis g y

Happiness & GDP in Developed countries (15 years)

Den Can

Fin

F It Jap

.008ss

N = 14 R2 = 0.24

Y = 0 009 0 000009X

Fr

.006of happines Y = 0.009 ‐ 0.000009X

(3.82) (‐2.13) t‐stat in parentheses

Bel

USA Swe

Esp

k Net

.004age growth t‐stat in parentheses

uk Net

.002avera

Ire

0 Ger

200 400 600 800 1000

(81)

Happiness & relational goods

D l d t i (15 )

Can

Jap

08

Developed countries (15 years)

N = 14

Fin Den

Fr

It

006.00

ppiness R2 = 0.60

Y = 0.0012 + 0 381X

Swe Bel

.004.

owth of happ 0.381X

(2.40) (7.40) t stat in parentheses

Esp USA

Net uk

.002

average gro t‐stat in parentheses

Ire

0 Ger

005 0 005 01 015 02

-.005 0 .005 .01 .015 .02

(82)

Easterlin and Angelescu’s analysis

Happiness & GDP in Developing countries (15 years)

Mex

.04ss

N = 5 R2 = 0.06

2.03of happines

Y = 0.017 ‐

0.00001X (1.10) (‐0.74)

01.02age growth

t‐stat in parentheses

Chile

KorRep Arg

0.0avera

China

0 200 400 600 800

(83)

Happiness & relational goods

Developing countries (15 years)

Mex

4

Developing countries (15 years)

N = 5

.03.04

piness

R2 = 0.68

Y = 0.0047 + 0.890X

.02

owth of happ

(1.29) (2.44) t‐stat in parentheses

Chile

KorRep Arg

0.01

average gro

China

-.01

02 01 0 01 02 03

-.02 -.01 0 .01 .02 .03

(84)

Which target for increasing well‐being? Conclusion 1

• An increase in income is hardly a realistic An increase in income is hardly a realistic perspective for substantial growth in well‐

being being

• However, income matters for the well‐being

f l i i di id l

of low‐income individuals

(85)

Income matters for the well‐being of

low‐income individuals

(86)

Which target for increasing well‐being? Conclusion 2

d ? i f d

• How to reduce poverty? In a society freed from mass poverty redistribution is more reasonable than growth

• Such a society should largely target something y g y g g different from growth, in order to increase

well‐beingg

• Relational goods are a reasonable candidate to be the “something different”

to be the something different

• But what can be done? What policies can

h l ti l d ?

enhance relational goods?