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Bi-Weekly Discussion - The Economics of Happiness

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Brian B.
Bi-Weekly Discussion - The Economics of Happiness

Details

We're currently hosting our discussions at Café Walnut, not too far from our summer meeting spot in Washington Square Park. The cafe is near the corner of 7th & Walnut in Olde City. The cafe's entrance is below street level down some stairs, which can be confusing if it's your first time. Our group meets in the large room upstairs.

Since we're using the cafe's space, they ask that each person attending the meetup at least purchase a drink or snack. Please don't bring any food or drinks from outside. If you're hungry enough to eat a meal, they have more substantial fare such as salads, soups & sandwiches which are pretty good and their prices are reasonable.

The cafe is fairly easy to get to if you're using public transit. With SEPTA, take the Market-Frankford Line & get off at the 5th Street Station (corner of 5th & Market), and walk 2 blocks south on 5th and then turn right on Walnut Street and walk 2 blocks west. With PATCO, just get off at the 9th-10th & Locust stop and walk 3 blocks east & 1 block north. For those who are driving, parking in the neighborhood can be tough to find. If you can't find a spot on the street, I'd suggest parking in the Washington Square parking deck at 249 S 6th Street which is just a half block away.

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"HAPPINESS ECONOMICS & THE WORLD HAPPINESS REPORT"

INTRODUCTION:

Following up on our last meetup where we discussed the Human Freedom Index & Social Progress Index, this time we'll look at several surprising findings in the emerging field of "happiness economics" as well as the U.N. "World Happiness Report" which is an index that discuss attempts to measure the average happiness level of the populace in different countries.

The new subdiscipline of "happiness economics" has grown substantially since the late 20th century, with the development of new methods, surveys and indices to measure happiness and related concepts. Its findings have been described as a challenge to the economics profession, which traditionally dealt with human needs through abstraction of the pricing mechanism that emerges in market economies to help allocate scarce resources to satisfy theoretically unlimited human demands. There has been a somewhat analogous shift with psychology with the rise of the new field of "positive psychology" which focuses on happiness & well-being as opposed to mental illness. In both positive psychology & happiness economics, happiness is typically measured using subjective measures – e.g. self-reported surveys – and a major concern has always been the accuracy & reliability of people's responses to happiness surveys. This method is relatively well accepted in positive psychology since psychologists are accustomed to studying other mental states like anxiety & depression which can seem rather nebulous & hard to quantify, but the subjective nature of happiness has posed more problems for economics which has usually prized itself on quantitative rigor.

Within happiness economics, objective measures such as lifespan, income, and education are often used as well as or instead of subjectively reported happiness, with the assumption that they generally produce happiness, which while plausible may not necessarily be the case. Happiness macroeconomics - the study of the average happiness of large populations - is faced with the additional problems presented by trying to aggregate the happiness of many individuals and also the problems that reported happiness may be partly a socio-cultural construct which makes it difficult to compare happiness across cultures. Many happiness economists believe this comparison problem can be solved by analyzing cross-sections of large data samples across nations and time which demonstrate consistent patterns in the determinants of happiness.

One of the most significant developments for happiness economics is the creation of the U.N.'s "World Happiness Report". In July 2011, the UN General Assembly resolution 65/309 Happiness: Towards a Holistic Definition of Development inviting member countries to measure the happiness of their people and to use the data to help guide public policy. The first World Happiness Report was released on April 1, 2012 as a foundational text for the UN High Level Meeting: Well-being and Happiness: Defining a New Economic Paradigm, drawing international attention. Since its inception, the World Happiness Report has been edited by 3 economists - John F. Helliwell, Richard Layard & Jeffrey Sachs - and many other respected economists, sociologists, psychologists & statisticians from around the world have contributed to it. The report outlined the state of world happiness, causes of happiness and misery, and policy implications highlighted by case studies. In 2013, the second World Happiness Report was issued, and since then has been issued on an annual basis with the exception of 2014. The report primarily uses data from the Gallup World Poll, as well as the World Values Survey.

The World Happiness Reports feature annually shifting international rankings of countries based on their populace's estimated level of overall happiness & well-being. Data is collected from people in over 150 countries. Each variable measured reveals a populated-weighted average score in a scale running from 0 to 10 that is tracked over time and compared against other countries. These variable include: (1) real GDP per capita, (2) social support, (3) healthy life expectancy, (4) freedom to make life choices, (5) generosity, and (6) perceptions of corruption. Each country is also compared against a hypothetical nation called "Dystopia", which represents the lowest national averages for each key variable and is, along with residual error, used as a regression benchmark. To view the World Happiness Report, you can go to their website (http://worldhappiness.report/) or simply check out the Wikipedia entry for a more user-friendly version of their international rankings - https://en.wikipedia.org/wiki/World_Happiness_Report#International_rankings

Note: This meetup will concentrate mostly on happiness economics and its research on what makes societies happy in aggregate, but our discussion will be immediately preceded by a discussion by the Philadelphia Skeptics in the Pub meetup that will address positive psychology & its research on what increases overall happiness for individuals. To view the outline for that discussion and RSVP, go here:

https://www.meetup.com/Philly-Skeptics/events/246018303/

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DIRECTIONS ON HOW TO PREPARE FOR OUR DISCUSSION:

The videos you see linked below are intended to give you a basic overview of the ways that economists try to analyze & measure happiness. As usual, I certainly don't expect you to read all the articles & watch all the videos prior to attending our discussion. The easiest way to prepare for our discussion is to just read the numbered videos linked under each section - this should take about 42 minutes total to get through. The articles marked with asterisks are just there to supply additional details. You can browse and look at whichever ones you want, but don't worry - we'll cover the stuff you missed in our discussion.

In terms of the discussion format, my general idea is that we'll address the 5 topics in the order presented here. I figure we'll spend about 30 minutes on the first section, and then 45 minutes discussion sections II & III together, and then another 45 minutes discussing sections IV & V together. I've listed questions under each section which we'll do our best to address.

I. "HAPPINESS ECONOMICS", STATED VS REVEALED PREFERENCES, AND HAPPINESS VS UTILITY:

  1. Adrienne Hill, "The Economics of Happiness" (video - 10:25 min.)
    https://www.youtube.com/watch?v=O-t8-Vq0HO0

http://www.themoneyillusion.com/?p=8311

  • Derek Thompson, "The 10 Things Economics Can Tell Us About Happiness" (short article)

https://www.theatlantic.com/business/archive/2012/05/the-10-things-economics-can-tell-us-about-happiness/25794

II. ECONOMIC DEVELOPMENT, THE EASTERLIN PARADOX & HAPPINESS IN CHINA:

  1. AEA w/ Shun Wang, "On whether a richer China is a happier China" (video - 2:52 min.)

https://www.aeaweb.org/conference/videos/2017/poster/shun_wang

http://www.cnn.com/2017/09/25/health/happiness-where-you-live-partner/index.html

III. SOCIAL PROGRESS, THE TWO INCOME TRAP & THE PARADOX OF DECLINING (WHITE) FEMALE HAPPINESS IN THE U.S.:

3a) Shia Lazar w/ Betsey Stevenson and Justin Wolfers, "Females and Happiness" (video - 5:01 min.)
https://www.youtube.com/watch?v=TLOX0GgxoiM

3b) Elizabeth Warren, "The Heart of the Two Income Trap" (video - 2:40 min.)
https://www.youtube.com/watch?v=WYmfpMPkmbw

https://www.theatlantic.com/business/archive/2010/07/more-weird-metrics-for-elizabeth-warren/60351/

IV. THE U.N. WORLD HAPPINESS REPORT, AMERICA'S "SOCIAL CRISIS", AND "HYGGE" & "LAGOM" AS THE SECRETS TO SCANDINAVIA'S HAPPINESS:

4a) SDSN, "2017 World Happiness Report" (video - 2:33 min.)

https://www.youtube.com/watch?v=Se2gfFKp1Iw

4b) Jeffrey Sachs, "Columbia's Jeffrey Sachs Says U.S. Is 'Surly and Nasty'" (video - 3:49 min.)

https://www.youtube.com/watch?v=igUNRx3ANFg

4c) Mary H.K. Choi w/ Meik Wiking, "The Scandinavian Hygge Lifestyle Is Taking The World By Storm" (video - 4:52 min.)

https://www.youtube.com/watch?v=Pl74ybpyNLk

  • Ryan Bort, "The Social Crisis Causing America's World Happiness Ranking to Plummet" (short article)

http://www.newsweek.com/happiness-decline-america-world-happiness-report-571343

https://niskanencenter.org/blog/double-edged-denmark/

  • Tyler Cowen, "Denmark’s nice, yes, but Danes live better in the U.S." (short article)

https://thepeninsulaqatar.com/opinion/18/08/2016/Denmark’s-nice,-yes,-but-Danes-live-better-in-US

  • Michael Booth, "The Danes Don't Have the Secret of Happiness. Something's Rotten in the State of Denmark" (article)

https://www.theatlantic.com/health/archive/2015/01/the-danish-dont-have-the-secret-to-happiness/384930/

V. WELL-BEING INEQUALITY & THE SUICIDE PARADOX:

  1. Meik Wiking, "The Dark Side of Happiness" (video - 19:21 min, start at 8:53)

https://youtu.be/PbtzY-8IFTQ?t=533

https://www.theatlantic.com/health/archive/2016/04/the-inequality-of-happiness-countries-iceland-world-happiness-report/477180/

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Cafe Walnut
703 Walnut Street · Philadelphia, PA
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