What is gross about happiness?

I like Arthur Brooks’ book, “Gross National Happiness” (Basic Books, 2008).

However, the old saying “you can’t judge a book by its cover” seems to me to be particularly apt in the case of this book. I found the title so unappealing that I had actually decided not to read the book until I stumbled across a series of articles based on it, which the author has written in the Freakonomics section of the New York Times (here).

Before I attempt to say something constructive about the book I want to state my objections the title. It seems to me that the concept of gross national happiness is just a gimmick. It is a useful gimmick for a politician to use to make the point that some of the important things in life are not measured in gross national product. I can understand why the king of Bhutan, for example, could be attracted to making gross national happiness a national goal as a way of making this point. But I cannot understand why any serious researcher would want to use “gross national happiness” as a title for a book.

In what sense is happiness gross? In terms of national income accounting, “gross” means that depreciation of capital stock has not been deducted from national product: net national product equals gross national product minus depreciation. “Gross” has no corresponding meaning in relation to happiness research.

It seems to me that the idea of governments setting out to raise aggregate (or average) happiness is indeed gross, or crass, when it involves interference in the lives of people in order to make them happier. Fortunately, Arthur Brooks manages to distinguish the focus of his book from this concept. Brooks’ focus is based on the idea in the American Declaration of Independence that individuals have the right to pursue happiness. The question he asks is: “Are we improving as a nation in protecting and exercising our right to pursue happiness?” (p3).

However, I don’t think the purpose of the book is to address that question. What the book does – and does well - is to present the results of survey information for the United States on the relationship between happiness and a variety of factors: political views, religion, family values, security, economic achievement, inequality, unemployment and charitable giving.

Many of the findings in this book would be familiar to readers of the happiness literature. However, the findings about the relationships between happiness and politics seem novel, and in combination with the findings about religion and family values, give a great deal of food for thought:

• Americans who label themselves as conservatives are nearly twice as likely to say they are very happy as those who label themselves as liberals. This gap has persisted for 35 years and apparently cannot be explained in terms of income differences. Religion and marriage account for some but not all of this happiness gap. The author suggests (quoting columnist, George Will) that conservatives tend to view happiness as a project whereas liberals tend to view it as an entitlement.
• Religious people (those attending church at least once a week) are about 20 percentage points more likely to say they are very happy than secular people (those who seldom or never attend church). The relationship between religion and happiness is common to all religions and has little to do with money, age, education, sex, family status or race.
• Having children can be part of a happy lifestyle even though it lowers the probability of happiness by 6 or 7 percentage points. The percentage of married, religious, conservative people with kids who are very happy is 38 percentage points higher than the percentage of single, secular, liberal people without kids who are very happy. While secular liberals have stepped off the baby train, religious people are breeding profusely. You could even say they are flourishing.
  

I do not fully understand these findings and I wonder to what extent they hold in countries other than the United States. I will give further thought to this in later posts.

Meanwhile, I commend Arthur Brooks for bringing these findings to public attention.

How much happiness do we get from freedom to travel?

This post is really just an excuse to write something about what I have been doing over the last few weeks.

I have been touring in the Canadian Rockies and Alaska by bus, train and cruise ship - and loving every minute of the experience.

What is it that makes this kind of activity so pleasant? The first thing that comes to mind is the scenery. We saw some truly magnificent scenery. I suppose anyone could see the same kind of thing by watching a TV program or doing an internet search. They might even get to see more of the wildlife than we saw without leaving the comfort of home. But the virtual experience is never as good as the real experience.

I will give you an example. As we were travelling between Lake Louise and Jasper our bus driver noticed a car stopped beside the road. He thought there might be something worth seeing and stopped the bus to let us have a look. That gave us the opportunity to see a couple of grizzlies in their natural environment and to take photos of them. It was just a matter of chance that these bears happened to be there when we passed by. I think all members of our tour group felt that we were privileged to have had that experience.

The second thing that comes to mind is travelling companions. It was great to have been able to share this touring experience with my wife and other people we knew, and to have had the opportunity to travel with a good bunch of people. Some other things that made the holiday pleasant included an excellent tour guide, the opportunity to stay in very comfortable hotels, fine food and professional organisation (by APT).

However, the most important thing that makes touring enjoyable has to be the novelty of the experience. As much as we enjoyed visiting the Canadian Rockies and Alaska, it is not likely that we will return. If we can afford to travel again, we will no doubt be looking for a new experience.

How does inner freedom vary with per capita income level?

In earlier posts about inner freedom - the feeling of choice or control over the way life turns out - I have discussed some implications of the observation that humans have a passion for control of their lives (here), the correlation at a country level between inner freedom and life satisfaction (here) and the extent to which inner freedom varies with economic freedom (here).

In this post I present a chart showing how the probability of feeling in control of life varies with average income levels of countries. Data sources are the same as those used in posts referred to above.

The graph presents a similar picture to that shown in the post on inner freedom and economic freedom. The probability of inner freedom tends to rise more gradually with per capita income levels than does the probability of being satisfied with life.

Is there evidence that institutionalised transparency reduces the political power of narrow interest groups?

Recent posts by Richard Posner and Gary Becker on their blog (May 4 ) discuss US farm subsidies that apparently amount, on average, to of the order of $50,000 per farmer. Posner suggests that these subsidies are outlandish and that “their firm entrenchment in American public policy illustrates the limitations of the American democratic system”. Becker points out that the subsidies are a consequence of interest group competition that tends to favour small groups of producers (who gain substantial benefits per person) at the expense of large groups of taxpayers and consumers (whose losses are relatively small in per capita terms).

I left a couple of comments on Becker’s post, the second of which was as follows:

“... it seems to me that some political outcomes are outlandish even though they can be explained in terms of democratic politics e.g. in terms of the relative power of different pressure groups associated with differential rational ignorance and free-rider problems.
The interesting question is whether better outcomes could be achieved through institutional changes e.g. through procedures to promote greater transparency and thus reduce rational ignorance problems.”

I must confess that the question of whether transparency institutions have the capacity to reduce rational ignorance problems is something that I have thought about quite frequently over the last 35 years, having worked in such a transparency organisation for a considerable part of that time.

The latest WTO Trade Policy Review of Australia makes the following observation:

The high degree of transparency in the formulation and evaluation of Australia’s economic policies in relation to their rationale, nature, and economic effects, enhances government accountability and public debate over the merits of these policies. Hence, transparency has contributed greatly to the continued process of reform, which began in the 1980s, and in which trade liberalization, much of it unilateral, has played an important part. (WTO 2007, p. vii)

The TPRM report emphasised that the transparency function had become
institutionalised in Australia, notably through the role of the Productivity
Commission (and its predecessor organisations) as an independent review and
advisory body on microeconomic policy and regulation.

The role of the Productivity Commission and its predecessor organisations has been discussed in a recent paper by Gary Banks and Bill Carmichael, available here.

In discussing the possible relevance of the Productivity Commission as a model for other countries, Banks and Carmichael suggest that Australia’s experience demonstrates that institutionalised transparency can help promote reforms. They do not suggest, however, that institutionalised transparency is a magic wand.

“Expectations need to be tempered: transparency is unlikely to transform the policy environment overnight. Building a pro-reform constituency in government and the wider community is a gradual process. It took Australia four decades to get tariffs down and more than a decade tackling sources of underperformance in economic infrastructure services. And neither reform program is yet complete.

That said, reforms once made in Australia have tended to stick, having stronger foundations of support or acceptance within the community precisely because the basis for reform was transparent. The programs of tariff liberalisation and regulatory reform initiated under one government have generally been maintained by new governments of different political complexions”.

Banks and Carmichael conclude as follows:

“We recognise that Australia’s transparency arrangements may not suit other countries. There can be no ‘one size fits all’ approach. Arrangements in other countries must necessarily reflect their cultural and political systems, and ensure domestic ownership of national trade policy. However, finding ways of achieving the broad principles of domestic transparency in other countries’ institutional settings is an objective to which Australia’s experience lends considerable support”.