The Economist’s Guide to Happiness

9th September, 2009

First published in the Sunday Times, 9 August 2009

Spend less time with your children. Don’t underestimate the benefits of a divorce. Never serve dog food at a dinner party. These are some of the unexpected revelations to have emerged from an unlikely combination: happiness, and economists.
You might think that the “dismal science” has done enough damage for now. Economists have hardly emerged from the banking crisis with their reputations enhanced. But forecasting financial meltdown was never going to be easy, so perhaps it is best of economists stick to simpler questions, such as “how can we be happy?”
A growing number of economists have been attempting to answer this question. Not only are the statistical tools of economics surprisingly well-suited to unlock the secrets of happiness, but the research topic is good box office, too… and these are economists we’re talking about.
Some of the results sound as though they come from hippies rather than economists. For instance, economic growth does not seem to make the citizens of a rich country such as the UK any happier. A good job too, considering the current prospects of any economic growth seem slim.
Other discoveries are less intuitive. For instance the economists Andrew Oswald and Nattavudh Powdthavee has discovered that teenagers and the elderly are actually rather happy. “Your late 30s are the most unhappy period of your life,” Oswald cheerfully tells me. Thanks, Professor, from a grateful 35-year-old.
Both these results have been discovered through the simple method of asking people how satisfied they are with their lives, and then cross-referencing what they say with a battery of other data such as health, income, and age. It’s a straightforward approach, but not everyone is convinced that it produces sensible results.
Norbert Schwarz, a psychologist, once conducted an experiment in which he arranged for people to find ten cents – about six pence – by a photocopier just before they filled in his happiness questionnaire. The ones who found themselves pennies richer then claimed to be substantially happier with their lives as a whole. A sunny day had much the same effect.
Partly for this reason, another group of economists comes at the happiness problem in a different way. (No field of economics would be complete without a schism, would it?)
This alternative clan uses the “day reconstruction method”. People would be asked to think about the previous day. What did they do first? (Get up, stumble downstairs for coffee.) How long did it take? How did they feel while they were doing it? And what did they do next?
This method produces a satisfyingly detailed picture of the ebb and flow of happiness and misery throughout the day. One study, conducted by Schwartz, Daniel Kahneman (a Nobel prize winner in economics), and others, interviewed nine hundred working women in Texas. Among the choicer discoveries is that apart from working and commuting, nothing is less enjoyable than childcare. Perhaps we shouldn’t be surprised. Children can be more inspiring in the abstract than in person, and while it is beyond the pale to say you hate spending time with your kids, nobody will blame you if you say they acted like brats yesterday evening.
Indeed, of all the people you might expect to enjoy hanging out with, friends come top, children and spouse bottom. And forget the what the glossy magazines tell you: shopping is a miserable experience, and so is fooling around at home on a computer.
Not every result is a surprise. For instance, having sex is lots of fun. It is also, tragically, the thing that fewest of these women spent any time doing.
Spending time with your boss is no fun. As to the pros and cons of having sex with your boss, economists can only speculate.
I’ve been following the odder corners of economics for years, and have concluded that some of the tips for a happier life come not from this happiness research, but from more unexpected sources. When I go to a restaurant, for instance, I make sure never to alter my choice based on what my dining companions choose. Dan Ariely, an economic psychologist, has discovered that people tend to “fit in” in such situations and end up with a choice they enjoy less.
A less appetising discovery comes from the American Association of Wine Economists, in a new research paper, “Can people distinguish pâté from dog food?”. It turns out that they can: even if puréed to look like duck-liver pâté and served chilled with Carr’s water biscuits, dog food tastes terrible. Alas, a cost-saving idea discredited.
It’s not all silliness, however. Several pieces of economic suggest that divorce is underrated. Andrew Oswald has discovered people who go through divorce find their lives improve. Betsey Stevenson and Justin Wolfers, economists based in the US, found that as individual US states introduced more liberal divorce laws in the 1970s, domestic violence also fell in those particular states, and so did the number of women killed by their husbands.
Meanwhile, some of the economists conducting this research have influence in high places. Lord Layard, the patron saint of happiness economics in the UK, is a Labour life peer. Alan Krueger, an economist who has been working with Kahneman and Schwartz, has been made a senior Treasury official by President Obama. Before his nomination, he was working on a method for producing “happiness accounts” for the United States.
Yet once an economist, always an economist. Some time ago, I spoke to Professor Krueger about his work on happiness. He preferred to speak about “subjective well-being,” he explained to me, because “happiness sounds a bit frivolous.” Oh for goodness sake, Professor. Cheer up.

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