Would we be more satisfied with life if we lived in the best of all possible worlds?

How would we know if we lived in the best of all possible worlds? A possible world is not a perfect world. If we lived in the best possible world we would still be fallible humans. If you asked someone living in the best possible world how satisfied they are with their life it seems to me that they would be likely to look around at the lives that other people live and use that as the basis for their response. If Australia was the best of all possible worlds my guess is that average life satisfaction of Australians would not be much higher than their average life satisfaction has been over the last decade or so.


My point is not that life in Australia is close to the best possible, but that life satisfaction may not be a reliable indicator of whether our lives are getting better. If we lived in the best of all possible worlds, many of us would have greater opportunities than we have now and would take advantage of those opportunities to achieve better lives. However, since most of us would adapt fairly quickly to our new lives, average life satisfaction would not be much higher than it is now. We would readily acknowledge that our lives had improved, but our level of contentment would not be much greater.

Why do I think that? Well, take a look at the ABS web site showing Measures of Australia’s Progress. The picture presented there is of improvement in many aspects of well-being over the last decade, including health and education as well as income. The negative outcomes are in respect of environmental outcomes that tend not to be at the front or our minds when we think of our personal well-being. (In the best possible worlds our consciences might be more troubled by negative environmental impacts of our actions, but this would have led us to reduce such impacts.) On balance, the indicators suggest that the personal well-being of most Australians has improved substantially over the last decade.

Now, take a look at the chart below showing what has happened over the last decade to average life satisfaction and the personal well-being index produced by Australian Unity and the Australian Centre on Quality of Life. The life satisfaction rating is derived by asking respondents to give a rating from 0 to 10 in response to a single question: ‘Thinking about your own life and personal circumstances, how satisfied are you with your life as a whole?’ The personal well-being index is the average of satisfaction for a range of life domains including standard of living, health, achieving in life, personal relationships, feeling part of the community and future security.

Australians were apparently more satisfied with life than usual at the time of 2004 Olympics and less satisfied than usual during the onset of the global financial crisis, but there is not much change in either index over the decade as a whole. The same survey asks respondents how satisfied they are with the economic situation in Australia. Ratings of the economic situation fluctuate far more than the life satisfaction responses, but there is still not much evidence of an upward trend reflecting the growth in real income levels over the decade.

The chart also shows that ratings of the economic situation have fluctuated more or less in line with the consumer confidence index produced by Roy Morgan research. This consumer confidence index is constructed from answers to questions about current economic conditions and economic conditions over the next five years as well as family finances and whether or not this is a good time to buy major household items.

The following chart shows how responses to the question about economic conditions over the next five years have fluctuated in the recent past. Over the last year or so, a lot of us have tended to become more pessimistic about the economic outlook.

Fortunately, our satisfaction with our own lives does not fluctuate to the same extent as our assessments of the economic situation. Both types of measure have the same deficiency, however, as indicators of progress or regress. When we are asked to rate our own lives or the state of the economy we tend not to look back and reflect upon changes that have occurred unless we are asked explicitly to do so.

The Gallup World Poll asks respondents to rate their lives five years ago and five years ahead as well as their life today, all relative to the best possible life. The results provide an indication of whether survey respondents perceive that their lives are getting better. The average rating Australians give for their current life in 2011 is 7.4 and their rating of life in five years is 8.0 . In 2008, Australians rated their life five years previously at 6.8 . I don’t know why the data is so patchy, but it does suggest, nevertheless, that Australians perceive that their lives have improved over the last decade.

Which is the more appropriate policy objective: opportunity or contentment?

Carol Graham’s new book, ‘The Pursuit of Happiness’, makes an important contribution to consideration of the relevance of happiness research to government policy because it considers explicitly which dimensions of happiness are most relevant as public policy objectives. Happiness researchers have previously argued in favour of particular definitions of happiness - for example positive feelings, emotional well-being, satisfaction with life, capability or opportunity – without much consideration of the relevance of their favoured definitions to public policy.

Early in the book, Carol suggests: ‘A plausible assumption is that most societies would be interested in maximizing the number of citizens who believed they were leading purposeful lives but less concerned about how often people had smiled yesterday. Yet even that statement reflects normative priors that might not apply to all cultures and societies, some of which might emphasize the importance of contentment in day-to-day living more’ (p.30).

Near the end, she comes to the conclusion that a policy that aims to guarantee contentment to all citizens, rather than the opportunity to pursue a fulfilling life, ‘might be unacceptable in most societies’ (p 122). Carol also acknowledges that measures of subjective well-being can contribute to better government policies by making policy process better informed, irrespective of whether any particular dimension of happiness is pursued explicitly as a national objective.

The public policy choice between pursuit of contentment and widespread opportunity is characterised in this book as a choice between Bentham and Aristotle, with Bentham in favour of maximizing the contentment (or pleasure) of the greatest number and Aristotle in favour of maximizing the number of people who have the opportunity to lead a meaningful life (i.e. to flourish). This might be a little unfair to Bentham, who held that utility includes anything that ‘tends to produce benefit, advantage, pleasure, good or happiness’, which would certainly encompass the opportunity to lead a meaningful life. Nevertheless, many Benthamites have tended to equate happiness with pleasure and even J S Mill, who sought to distinguish between the merits of higher and lower pleasures, saw both tranquillity (contentment) and excitement as the main constituents ‘of a satisfied life’.

The opportunity to lead a meaningful life implies agency, which Carol defines as ‘the capacity to make choices and act on them’ (p 41). She perceives individual agency to be limited by income, education and information constraints as well as institutional constraints, i.e. by all factors that limit individual opportunity.

So, doesn’t greater agency or opportunity lead to greater contentment? Not necessarily. Carol points out that people with limited wealth often report being very happy while people who are in the process of obtaining higher levels of wealth (frustrated achievers) often report feeling miserable. She suggests that the way people answer happiness questions in surveys is to a large extent determined by their agency. The process of acquiring agency may produce short term unhappiness because of uncertainty associated with the adjustment process (e.g. in relocation away from family and friends) and if expectations of a more fulfilling life do not materialize this could result in lasting unhappiness.

Doesn’t this make contentment a more appropriate objective than agency? If the peasants are happy with their lives as they are, why seek to improve the opportunities available to them? I think Carol provides a good answer to these questions. She points out that while adaptation to circumstances is usually positive from an individual psychological perspective, it can lead to collective tolerance for a bad equilibrium. For example, crime and corruption have less effect on subjective well-being in countries where crime and corruption have become an entrenched feature of society. This should not make it any less desirable to reduce crime and corruption in such places.

The numerous examples that Carol draws from her research experience to illustrate the points she is making help make this book a pleasure to read. Readers are told about happy peasants and frustrated achievers in Latin America; about survey respondents in Afghanistan who are apparently happier than the world average despite objective conditions that are markedly worse; about migrants who are markedly less happy than the average for the countries they have migrated to; and about obese people who are less happy than the non-obese, but much less unhappy when there are more obese people around them.

My only reservation about the book is that I am not persuaded that the unhappy growth paradox – lower average happiness in countries with relatively high rates of economic growth after controlling for per capita income levels – is largely attributable to unhappiness associated with the process of acquiring agency. As I have suggested before, I think the unhappy growth phenomenon might disappear if researchers could control for wealth rather than income levels. The appearance of unhappy growth might largely reflect the influence on well-being of wealth (reflected in quality of housing, financial assets, human capital, public infrastructure, social capital etc.) which may take several decades to accumulate.

However, that is a minor reservation. I have no hesitation in recommending this book to anyone who is interested in the role of government in the pursuit of happiness.

Postscript:
A recent conference presentation by Carol Graham on 'Happiness around the World: The Paradox of Happy Peasants and Miserable Millionaires' is available here.

Is the social fabric stronger when a high proportion of the population identify with helping the people nearby?

In my last post I presented some evidence that people who do not identify strongly with ‘always behaving properly’ nevertheless tend to identify strongly with helping the people nearby if they feel a great deal of freedom and control of their own lives (i.e. if they have strong feelings of individual agency).


Does an identification with helping the people nearby have a positive effect on the social fabric or, to use an Australian expression, is it just about ‘looking after your mates’? In some contexts, helping the people nearby could even be corrupt behaviour. Fortunately, it is possible to test the relationship between identifying with helping the people nearby and attitudes toward corruption using data from the World Values Survey. This survey asks respondents to rate their view on whether it is ‘justifiable for a person to accept a bribe’ on a scale from 1 to 10, where a rating of 1 means that it is never justifiable and a rating of 10 means that it is always justifiable. (As before, I am basing my analysis on cross-tabulations for about 80,000 respondents in 57 countries from the 2005 Survey.)

The relationship between identifying with helping the people nearby and attitudes toward corruption is shown in the chart below. (The percentages shown in the chart add to 100 per cent along the horizontal axis.)

It is clear from the chart that people who identify with helping the people nearby have less tolerant attitudes toward corruption. Similar analyses show that these people are also less tolerant of social security and tax fraud, and fare evasion on public transport. It seems clear that the social fabic is stronger when a high proportion of the population identify with the importance of helping the people nearby.

Do you have to be a goody-goody to identify strongly with helping others?

No! People who feel a great deal of freedom and control of their own lives identify strongly with helping others even if they don’t see themselves as goody-goodies. People with strong feelings of individual agency identify strongly with the proposition ‘it is important to help the people nearby’ even if they don’t identify at all with the proposition ‘it is important to always behave properly’.


Before I present a chart showing this, I should provide some background information. I ended my last post wondering whether people who feel little freedom in their own lives might tend to be more likely to engage in anti-social activities if they give high priority to having a good time and feel little control over their own lives. However, when I looked at World Values Survey data on people who identify strongly with the proposition ‘it is important to this person to have a good time’ I found that they tend to identify much more strongly than average with helping others, even when they feel little control over their own lives. (I am basing these observations on cross-tabulations for about 80,000 respondents in 57 countries from the 2005 Survey.)

So, I decided to see if this is also true of people who identify strongly with the proposition ‘it is important for this person to be rich’. It is. It is also true of people who identify strongly with ‘being very successful’, ‘thinking up new ideas and being creative’, ‘being adventurous and taking risks’, ‘looking after the environment’, ‘living in secure surroundings’, ‘tradition’ and ‘always behaving properly’. It seems that people who identify strongly with just about any proposition about the importance of a particular value in their own lives tend to identify strongly with helping others, even when they feel little control over their own lives.

It is hardly surprising that people who identify strongly with the proposition ‘it is important to this person to always behave properly’ would identify with helping others. What about those who see themselves as being a bit naughty – the people who say that proposition ‘is not like me, or not at all like me’? I gave the answer in the first paragraph. It is also shown in the chart below.

I’m not sure of the implications of the finding that people who do not see themselves as giving importance to behaving properly tend nevertheless to identify strongly with helping others if they have strong feelings of personal agency. Perhaps feelings of personal freedom and control of their lives help individuals to behave responsibly even when they prefer to see themselves as being fallible rather than virtuous. This deserves further study.