The Happiness Factor

Asking a roomful of economists how the country has fared lately can be like walking into a cafeteria food fight. They'll toss out the gross domestic product. Hit you with inflation. Lob the national debt into the air, then bombard you with prices and pelt you with interest rates, unemployment rates and exchange rates. When it ends, you're smothered in data. But what do all these facts tell you?

Not enough, say social scientists in the emerging field of "happiness economics." According to them, we pay far too much attention to what doesn't really matter. "Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values," professors Ed Diener and Martin E.P. Seligman wrote in the July issue of Psychological Science in the Public Interest.

The traditional assumption is this: What's good for the economy is good for the nation. This is sometimes true. When nations are poor and their citizens have unmet needs, happiness is usually low. As these countries become wealthier and more people have adequate food and shelter, the improving economic indicators correspond closely to trends in life satisfaction. After a certain point, though, national wealth becomes an increasingly poor indicator of national happiness.

In the United States, the gross national product has grown about 300 percent in the past 50 years. Studies show we're no happier, though. "We live in a world where living standards are rising, education levels are rising, longevity is increasing, disease is declining, crime is declining, pollution is declining, discrimination is declining. Almost every objective indicator of American and European life is positive, and people are really miserable about it," said Gregg Easterbrook, visiting fellow at The Brookings Institution during a June event at the Washington think tank. Easterbrook is senior editor at The New Republic and the author of The Progress Paradox: How Life Gets Better While People Feel Worse.

If economic indicators tell us little about the quality of our lives, then their usefulness to policy-makers is limited. The Declaration of Independence says nothing about productivity or GDP, after all. But it does mention happiness, as in "life, liberty and the pursuit of happiness." The happiness economists think that a measure of "gross national happiness" would give a more complete picture, and they say it's not a far-fetched idea.

"Happiness" is a crude term, scientifically speaking. Diener recommends using multiple happiness indicators, including "satisfaction with life, work and marriage; positive feelings; feelings of trust in other people; security; meaning and purpose in life; low levels of depression, stress and so forth; engagement and interest at work." Like consumer confidence, happiness data would be collected through large-scale scientific surveys, some of which already are being used by researchers. Barriers to truly quantifying an abstract such as happiness remain, though. For example, people tend to give more positive responses to questions about feelings on sunny days.

The GNH would give government more nuanced cost-benefit analyses. Take transportation. A Princeton University study of 1,000 Texas women found that commuting to work was their least favorite activity and commuting home was only slightly better. Happiness economists could calculate the dollar value of reducing that commute time. So instead of looking at upgrading roads and public transportation in strictly economic terms, we could use equations that account for differences in quality of life as well.

"We now have dollar values for the happiness from marriage, from health, from equality or inequality, dollar values on the happiness or unhappiness from aircraft noise, fear of crime, unemployment and inflation," British economics professor Andrew Oswald said at the Brookings event. Here's how it works: Economists take statistical data gathered through surveys. They compare the effects on happiness of certain conditions or life events with the amount of happiness gained through an influx of money.

In a May study for the National Bureau of Economic Research co-authored with Dartmouth economics professor David Blanchflower, Oswald found that a strong marriage is worth about $100,000 per year, meaning someone who married well is on average as happy as a single person who earns $100,000 more. Happiness data also can add dimensions to policy choices. A controversial finding from an MIT study showed, for example, that higher cigarette taxes make American smokers happier.

Happiness may be the ultimate goal, but it's also a means to an end. Some assume that widespread happiness would hurt productivity, but research shows happiness is good for the economy. Happy people are richer and more productive than unhappy people. The traditional attitude says that pursuing national wealth will lead to greater happiness; these researchers show pursuing national happiness leads to greater wealth.

At Brookings, Diener quoted Robert Kennedy: "The gross national product does not include the beauty of our poetry, the strength of our marriage, the intelligence of our public debate, the integrity of our officials, neither our wit nor courage, wisdom nor learning, devotion to country. It measures everything, in short, except that which makes life worthwhile." The GNH couldn't capture everything, either. But it would be a start.