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What Money Can't Buy

New breakthroughs in the field of "happiness research" point to the need for a gross national happiness indicator.

By Alan Durning 4 Aug 2004 | TheTyee.ca

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It was only a matter of time before someone quantified the benefits of regular sex.

As reported by the New York Times in July 2004, two economists recently published a paper  titled "Money, Sex, and Happiness: An Empirical Study." Using data from surveys of 16,000 Americans, they found that, not surprisingly, people who had more sex were happier. In economic terms, "increasing the frequency of intercourse from once a month to at least once a week provided as much happiness as putting $50,000 in the bank."

Not just any sex, though. The economists--David G. Blanchflower of Dartmouth College and Andrew J. Oswald of the University of Warwick in England--found that the monogamous, lasting-relationship kind was found to have significantly more value than, say, sex with a prostitute. Married people, they observed, have more sex than singletons and are happier--calculated to be worth about $100,000 in annual income.

Revolutionary finding

Interestingly, though, the media downplayed the most revolutionary finding of this study: that money--the most obvious candidate for purchasing power of any sort--apparently only has limited ability to "buy" happiness. In general, wealthier people are a little happier than the less well off, but it takes an awful lot of income to "buy" the happiness that companionship and community provide for free. Studies in the growing field of "happiness research" also suggest that as nations become wealthier the correlations between income and happiness become weaker.

In other words, financial indicators such as GDP, the Dow Jones, and consumer confidence--the standard methods by which societies such as the US and Canada gauge their well-being--are a poor measure of how happy we are. We've been scratching in the wrong place. We've been trying to maximize GDP instead of gross national happiness.


What is happiness research? It's a field populated by economists, psychologists, and other social scientists who are trying to figure out empirically sound ways to measure people's sense of satisfaction with their lives and communities. Happiness heavyweights include John Helliwell of the University of British Columbia, a professor of economics who has studied social capital and subjective well-being.

GDP doesn't rate happiness

Several years ago, our organization, Northwest Environment Watch, investigated including a "happiness indicator" in a regional index of progress for the Northwest that we developed (the Cascadia Scorecard, which we released in March). But the cost of gathering such data, and the technical challenges of reliable measurement, proved prohibitive. Now, though, the field of happiness--or subjective well-being, as it's often called in academic circles--is exploding, and becoming a respected area of specialization. There's even a Journal of Happiness Studies, published in the Netherlands.

All this means that the day is drawing near when we'll be able to track "happiness quotients" in B.C., Idaho, Washington, and Oregon.

Recent advances in the field were highlighted in June, when a stunningly complete review  was discussed at a Brookings Institution panel. Authored by Ed Diener, of the University of Illinois and the Gallup Organization, and Martin Seligman, of the University of Pennsylvania, the review spotlighted the disparities between economic indicators, on the one hand, and trends in how happy and satisfied in life people are, on the other.

Studies show, for example, that over the past 50 years, while income in the U.S. has soared and per capita GDP has tripled, life satisfaction has remained virtually flat, even as Americans' mental health has plummeted.

"Across nations," Diener and Seligman reported, "there are diminishing returns for increasing wealth above U.S. $10,000 per capita income; above that level, there are virtually no increases or only small increases in well-being. Moreover, health, quality of government, and human rights all correlate with national wealth, and when these variables are statistically controlled, the effect of income on national well-being becomes nonsignificant."

It's true that within a society, richer people report being happier than poorer people. But they're no happier than the much-poorer elites of poor countries, nor than the much-poorer rich of bygone years. Cross-cultural comparisons underline the findings: In a ranking of life satisfaction among 10 groups, the Pennsylvania Amish were found to be as happy as members of the wealthiest sector of the United States.

Plummeting mental health

Meanwhile, for reasons that no one really understands (social isolation? pollution? competitive individualism? media saturation? secularism? modern conveniences?), as societies around the world have grown richer at a galloping pace, their mental health has plummeted. Depression rates in the United States have climbed perhaps tenfold in the span of 50 years, and the incidence of anxiety disorders has also skyrocketed. Mental illness strikes at earlier ages as well. The average age of depression's first onset is now in the already-vulnerable adolescent years. (And this isn't a fluke of better reporting; researchers have designed their methods to prevent such biases.)

The researchers make a strong case that measuring well-being--and maximizing it through policy shifts--would benefit society as a whole, not just individuals. Compared with less-happy people, happy people go on to earn more money, have stronger immune resistance to cold and flu viruses, suffer fewer fatal accidents, and live longer (nine years longer, in one study). Research also suggests that happy workers are more productive.


They even offer a partial formula for joie de vivre: "Live in a democratic and stable society that provides material resources to meet needs….Have supportive friends and family….Have rewarding and engaging work and an adequate income…Be reasonably healthy and have treatment available in case of mental problems….Have important goals related to one's values….Have a philosophy or religion that provides guidance, purpose, and meaning to one's life."

At last, the wisdom of the ages has been confirmed empirically, at the 95 percent confidence interval!

Getting serious about happiness

Seriously, the implications of this research are profound and far-reaching. We still have a long way to go: Diener and Seligman devote a section in their paper to the need for a more systematic approach to happiness research, which includes a wide variety of measurements and methods.

But at bare minimum, it reinforces our hope that an indicator of well-being will some day be feasible for the Cascadia Scorecard. (Are British Columbians happier than residents of Northwest states? Stay tuned!)

A measure of human quality of life could put into proper perspective such flawed indicators as the Dow and the consumer confidence index, and--even more important--help us better assess the world that we are creating for our children.

Alan Thein Durning is executive director, and Elisa Murray is communications director, of Northwest Environment Watch, a Seattle-based research center that publishes the Cascadia Scorecard, an index of seven key trends shaping the future of the Northwest. See http://www.cascadiascorecard.org/ for more information.  [Tyee]

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