How close is the link between feeling free and being satisfied with freedom?

In my last post I discussed the close association between the feeling of having a great deal of freedom of choice and control over the way one’s life turns out and satisfaction with life as a whole. Data from World Values Surveys (WVS) suggests that when people feel they have a great deal of freedom and control they tend to be satisfied with life. I ended up referring to an earlier post providing evidence that perceptions of freedom are correlated with more objective indicators of freedom.


In this post I propose to revisit the links between different indicators of freedom, with a focus particularly on the relationship between feeling free and being satisfied with freedom. The underlying question is whether feelings of freedom of choice and control are influenced by emotional and cultural factors that may not have such a strong influence when people are asked whether they are satisfied with their freedom to choose what they do with their lives. The latter question is asked in the Gallup World Poll (GWP).

Figure 1 compares the percentages of those who feel a great deal of freedom of choice and control and those who are satisfied with the amount of freedom in their lives in 83 countries. The Figure shows a fairly strong positive relationship between the two variables. (The relationship shown would presumably be stronger if the variables being compared had been measured at the same time. I have used the 2005 WVS where possible and supplemented that using data from the 2000 survey. The data from the GWP was the most recent available in 2009, supplemented by more recent data for some countries.)

The observations for Latin American countries in Figure 1 are shown in red. Happiness researchers have previously observed that people in Latin America tend to be more satisfied with life than people with comparable incomes, health etc. in other countries. The location of these observations suggests that this Latin American factor (the secret of happiness?) comes into play to a greater extent when people are asked how much freedom of choice and control they have over the way their lives turn out than when they are asked whether they are satisfied with the amount of freedom in their lives. Perhaps the first question prompts people to look inward at their own feelings while the second question prompts them to look outward and think about national institutions.

Figure 2 show a quartile analysis for four different kinds of freedom for the 83 countries, ranked by percentage satisfied with the amount of freedom. Two additional variables, apart from percentage who feel they have a great deal of freedom and control. The first is an index constructed from the World Bank’s ‘Voice and Accountability’ indicator which captures perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. (The index has been constructed such that an index value of 100 corresponds to an indicator value of +2 and an index value of zero corresponds to an indicator value of -2). The other index is the Heritage Foundation’s economic freedom index, which measures the extent to which individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state.

Figure 2 indicates that countries that have high scores in terms of proportion of the population who are satisfied with freedom also tend to have high scores in terms of the other measures of freedom. It is not clear, however, to what extent there is a direct causal relationship between these variables. It is possible, for example, that people could feel a great deal of control over their lives in countries where levels of economic freedom are relatively high because income levels are also relatively high in those countries. High incomes may enable people to feel greater control over their lives.

How close is the link between freedom and life satisfaction?

I think individual autonomy should be viewed not just as a factor contributing to human flourishing but as a factor that is integral to it in the same way that good relations with other people and a feeling of competence are also integral to human flourishing. It seems to me that the nature of humans is such that they cannot achieve their individual potential for psychological growth and enjoyment of life unless they have control of their own lives.


That judgement is not beyond dispute. For example, Richard Kraut has suggested that individuals may sometimes benefit from being coerced to prevent them from harming themselves. I considered that argument here.

In this post I want to consider another possible argument against autonomy, namely that some people may prefer to have their autonomy restricted because they have difficulty in coping with a great deal of freedom of choice and control over their lives. There is some experimental evidence that beyond some point an increase in the range of options may make it more difficult for consumers to make choices – they may even prefer not to make a choice if the choice set is too large. Does this mean that people have less satisfaction with their lives when they feel they have a great deal of choice and control over the way their lives turn out?

No! At least that is the answer suggested by the research of Paolo Verme, using a large data set drawn from the World and European Values Surveys (‘Happiness, Freedom and Control’, 2007). Survey respondents were asked to rate on a scale from 1 to 10 ‘how much freedom of choice and control you feel you have over the way your life turns out they had over the way your life turns out’ where 1 means ‘none at all’ and 10 means ‘a great deal’. When this ‘freedom and control’ variable was included in a statistical analysis to explain life satisfaction it was shown to be more important than other significant variables, including subjective health and income.

I have done some research of my own using data from the 2005 World Values Survey to explore the relationship between ‘freedom and control’ and happiness and life satisfaction. The charts shown below have been constructed using data from about 80,000 respondents in 57 countries. In each chart the sum of the columns in the depth axis (happiness or life satisfaction) is 100%. So, for example, looking at Figure 1, you will see that the percentage of people who are ‘quite happy’ is higher than those who are ‘very happy’, ‘not very happy’ and ‘not at all happy’ irrespective of perceptions about freedom and control. The chart suggests, however, that people are much more likely to say that they are very happy when they perceive that they have a great deal of freedom of choice and control.

A comparison of Figure 1 and Figure 2 suggests that there is a much stronger relationship between ‘freedom and control’ and life satisfaction than between ‘freedom and control’ and happiness. This makes sense to me. A well-treated slave might say that she is quite happy, even though she has little freedom, but she would be much less likely to say that she is satisfied with her life.

In case anyone is wondering, as discussed here, there is evidence that perceptions of freedom or choice and control from the World Values Survey are correlated with more objective indicators of freedom.

Can behavioural economics help markets to work better?

In his book, ‘The Upside of Irrationality’, Dan Ariely claims to have identified a market failure in the online introductions market. He refers to a survey indicating that people participating in that market spent on average 5.2 hours per week searching profiles and 6.7 hours per week emailing potential partners for a payoff of 1.8 hours actually meeting them.

He comments:

‘Talk about market failures. A ratio of 6:1 speaks for itself. Imagine driving six hours in order to spend one hour at the beach with a friend (or even worse, with someone you don’t know and are not sure you will like)’.

When I read that my first thought was that it would not be particularly uncommon in Australia for young people to drive three hours to spend an hour with a friend and then drive for another three hours back to where they came from.

I think the term market failure is thrown around too loosely. The situation described clearly involves high transactions costs, but that doesn’t mean the market has failed. The existence of high transactions costs in a market should not be viewed as a symptom of market failure unless we can point to some reason why the market cannot function efficiently.

In this instance the market seems to be working well because evidence relating to the existence of high transactions costs has induced some enterprising people to consider what innovations might be introduced to reduce those transactions costs. The fact that the innovators were a university professor and his associates suggests to me that university staff may be becoming more entrepreneurial.

I think Dan Ariely has done a good job of demonstrating the potential for behavioural economics to help entrepreneurs to design innovations that may reduce transactions costs. He considers survey and experimental evidence which suggests that the high transactions costs associated with online introductions stem from the attempt to reduce humans to a set of searchable attributes. The problem is that the searchable attributes convey little information about what it might be like to spend some time with particular individuals.

Ariely and his associates developed a virtual online dating site that enabled participants to engage anonymously in instant message conversation about various images e.g. movie clips and abstract art. They found that participants were about twice as likely to be interested in a real date after meeting in person following the virtual date than following a conventional online introduction. It seems that when we experience something with another person we gain much more information about compatibility than when we just look at searchable attributes. He has discussed his research here.

It is too soon to know whether Dan Ariely and his associates have prompted a market innovation that will help large numbers of people to live happier lives. However, I think Ariely has demonstrated that behavioural economics may be able to help markets work better. As he points out, there is potential for firms to do a better job of satisfying consumer demand by conveying to consumers what it might actually be like to have the experience of using their products. I think that means, among other things, that if retail stores didn’t exist already they would probably need to be invented to give consumers the opportunity to experience goods before they buy them.

Coming back to market failure, does the fact that some consumers buy goods cheaply online after inspecting them in a retail outlet constitute a market failure? I don’t think so, even though such behaviour is evidence of positive spillovers associated with retailing. Manufacturers will work out before long that retailers provide them with a useful service by enabling consumers to experience their products in real life - and think up some way to encourage ongoing provision of that service.

Why do some people become grumpy senior citizens?

When I was in my 20s I could not imagine what it might be like to be old. I would not have believed it possible that one day the government would issue me with a ‘Seniors Card’ declaring that I am ‘a valued member of our community’ and asking for ‘every courtesy’ to be extended to me.

Actually, I still find it hard to believe that I have been given this card. Wasn’t I a valued member of the community when I was younger? Aren’t young people and old people equally entitled to courtesy?

Perhaps the purpose of the card is to warn young people that old people can be grumpy. A few days ago an elderly person - a person considerably older than me who has to cope with considerable pain and limited mobility - told me that a young man in a health services profession recently made a remark to her along the lines: ‘So, we are feeling a bit grumpy today, are we?’ She apparently tore strips off him (metaphorically) to teach him a lesson in courtesy. He now knows how she behaves when she is feeling particularly grumpy!

A few days ago another person mentioned to me that she had observed that the minor irritating behaviours that some of her friends had displayed when they were young have tended to worsen as they grow older. I think I have observed something similar, but I wonder whether the behaviour actually worsens or whether my threshold for irritation might have fallen as I have aged. There may be tendencies for both of these things to occur in some people. Some other people seem to improve with age.

In his book, ‘The Upside of Irrationality’, Dan Ariely provides a discussion of the long-term effects of short-term emotions, which may be helpful to an understanding of how some people develop habits of grumpiness. He provides experimental evidence that the way we respond to particular events when we are angry (even for unrelated reasons) can have an ongoing influence on our future decisions in similar circumstances and even become part of our identity.

The experiment involved influencing the mood of participants by showing them different videos chosen to make them feel either angry or happy, observing how they then respond to unfair treatment (unfair offers in the ultimatum game) and then observing how fairly they treat other people when roles are reversed. As might be expected, the angry participants were more likely to reject unfair offers. However, the offers that those participants subsequently made to other people tended to be fairer than the offers made by the happy participants who had accepted the unfair offers.

Ariely’s interpretation of the results seems to me to make sense. He suggests that the angry people tended to attribute their decision to reject the offer to its unfairness rather than to their emotional state and then to act as though they think other people are just like themselves. Similarly, the happy people who accepted the unfair offer would have tended to think that other people would be similarly willing to accept unfair offers. In both cases the decision made has an ongoing influence over future decisions, after the initial emotional state has passed.

The results are consistent with the idea that individuals have a tendency to interpret their own past decisions to indicate the kind of person they are and how the world works. A grumpy person who reacts negatively when some other person is perceived to be disregarding his or her commands is not necessarily acting out of character when showing generosity towards that person at other times. A decision made at the heat of the moment at some time in the distant past could have initiated a pattern of behaviour and sense of identity that prompts the person to act in this way. (The grumpiness shown at a particular time could, of course, be aggravated by pain or frustration.)

It is sometimes argued that society benefits from the actions of people who are prepared to sacrifice their own well-being in order to punish people who act unfairly. However, people who engage in such vindictive behaviour do not necessarily spend much time feeling grumpy. Chronic grumpiness is obviously undesirable for the individuals directly affected as well as for the victims of their grumpiness.

Dan Ariely’s research findings suggest an additional remedy for those of us who are concerned that we might become grumpier as we grow older. We should avoid making decisions while we feel grumpy!