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Wise words from John Quiggin

Suppose you wanted to establish whether children’s height increased with age, but you couldn’t measure height directly.

One way to respond to this problem would be to interview groups of children in different classes at school, and asked them the question Don suggests “On a scale of 1 to 10, how tall are you?”. My guess is that the data would look pretty much like reported data on the relationship between happiness and income.

That is, within the groups, you’d find that kids who were old relative to their classmates tended to be report higher numbers than those who were young relative to their classmates (for the obvious reason that, on average, the older ones would in fact be taller than their classmates).

But, for all groups, I suspect you’d find that the median response was something like 7. Even though average age is higher for higher classes, average reported height would not change (or not change much).

So you’d reach the conclusion that height was a subjective construct depending on relative, rather than absolute, age. If you wanted, you could establish some sort of metaphorical link between being old relative to your classmates and being “looked up to”.

But in reality, height does increase with (absolute) age and the problem is with the scaling of the question. A question of this kind can only give relative answers.

Here is the link.

Addendum: Here is Will Wilkinson on same.

Posted by Tyler Cowen on February 22, 2007 at 07:34 PM in Philosophy | Permalink

Comments

The problem with your hypothetical is that we CAN measure height directly, but we cannot measure happiness directly. You are begging the question of whether the reason we cannot measure happiness directly is because it is a subjective construct based on relative factors, or because each individual has an absolute level of happiness, but some other limitation prevents direct measure of that level.

Posted by: Doug at Feb 22, 2007 4:47:04 PM

But, Mencken is probably still right. He is most satisfied who makes more
money than his wife's sister's husband does. There is no way to separate
out the relative from the real here, and there is plenty of evidence that
the happiness part of income is strongly connected to its relativity. It
is not this objective thing we can independently measure like height, at
least not yet.

Posted by: Barkley Rosser at Feb 22, 2007 5:02:45 PM

Why would anyone suppose that happiness is one-dimensional?
Because most economists are?

Posted by: dearieme at Feb 22, 2007 5:12:11 PM

Barklay,
Only if you assume that each person has an absolute, quantifiable amount of happiness that can be compared on a one to one basis with the amount of happiness of another person. If happiness is inherently subjective and relative, that is not necessarily true. For instance, assume for a moment that poor people, as a group, generally experience a wider swing in happiness from short periods of really low levels, to longer periods of relatively higher levels. Even if their lives are horrible in comparison to your average rich guy's life, they might experience their life as being more happy and satisfying than the rich guy as a result of having lower baselines. Then again, they may not. The whole point is that it is impossible to tell if happiness levels are inherently subjective and relative.

Posted by: Doug at Feb 22, 2007 5:54:05 PM

Isn't happiness defined by our own perception of it? I don't grow taller in absolute terms because I think that I am taller than most. However, am I not happy if I believe that I am? I know that anecdotal evidence accounts for nothing, but from my personal experience (not me personally, but my surroundings), there has actually been a postive correlation between depression (as in I have been ordered to take anti-depressants-depressed) and income. I believe there's a weak correlation between income and perceived happiness, and that it is a standard normal distribution. As I said, I have no empirical data to back that up, just personal observations.

To get back on topic, the problem is that people are using flawed analogies due to a poor definition of happy. Height is how many centimeters you are from head to toe. You can think that you are really tall, or really short, but looking at the definition we can find out by measuring. Happiness on the other hand, is not so easily defined. I personally see it as my own perception on my wellbeing, and general state of mind. Until we come up with a standardized and measurable way to define happiness, we aren't really going to see any good measurements of it.

Posted by: Rasmus at Feb 22, 2007 6:12:29 PM

"The whole point is that it is impossible to tell if happiness levels are inherently subjective and relative."
Actually it is not. I can use introspection to assert that I am feeling "happy." The "problem" is communicating that sense to the outside world, to other people. I don't even think that a question like "does happiness increase with income?" is a valid question to ask.

Posted by: kurt at Feb 22, 2007 6:15:31 PM

Consumption almost certainly increases happiness, but income does not (directly) because it is only the yearly increment to wealth, and wealth does not (directly) because it is only the claim on resources, not the actual consumption of resources: if wealth (and income) is not expressed in consumption, it has no effect on the experience of the consumer (except for misers who get satisfaction from wealth for its own sake). Most important, even consumption can have only limited effects on happiness, because even the most profligate consumers have only 16 hours a day to garner the experiences resulting from their consumption, and can only do one thing at a time. exactly the same as all the other consumers. A $300 meal does not give 30 times the experiential satisfaction of a $10 meal, especially if the latter consumer is hungry and the former is not. Having 10 cars or 10 houses is not 10 times as experientially satisfying as one car or one house because you can only drive one car at a time and live in one house at a time (not to mention the declining marginal utility of consumption). So the function relating happiness to money consumption is much steeper than that relating happpiness to the experiences resulting from consumption.

Posted by: Bruce K. Britton at Feb 22, 2007 6:54:57 PM

Peoples incomes change through time. I make a lot more now than I did when I was a student but I'm not any happier now than I was then. If my income were cut in half, I doubt very much my happiness would change at all. Some of my friends make more than me, some less, I don't see any correlation between their happiness and their income or their wealth.

Posted by: Jeffrey Miller at Feb 22, 2007 7:00:21 PM

I wonder: has anyone actually thought about the actual physiological basis
of happiness? Serotonin levels or such? It'd make the question of income
vs. happiness easier to measure.

Posted by: Steve at Feb 22, 2007 9:17:50 PM

In modern economics, preferences are assumed to be ordinal, not cardinal. This means that you can ask a person which outcomes they prefer to others and obtain a ranking, but magnitudes are meaningless. I honestly don't see (1) how happiness studies with self-reporting can be consistent within this framework or (2) how one could even hope to obtain a reliable comparison of happiness in practice. Preferences, however, are simpler: take the people you're interviewing, show them the alternatives, and ask which they would prefer. Of course, this can be difficult practically, but it is at least somewhat meaningful.

Posted by: madsocialscientist at Feb 23, 2007 1:34:02 AM

madsocialscientist:
Some people have actually proposed the revealed preferences way of going about things, as you have. One way would be to look at immigration/emmigration numbers, and that would reveal peoples preferences. Where do people get the highest utility? The problem is that there are so many unkown factors (some are easier to find than others, but the level of beaurocracy (sp?) is one. Anyway, I don't think that revealed preferences gives us any information about happiness at all (emmigration _might_ show misery, but immigration does not show happiness). That would mean that people are a lot more happy in Sweden than Finland, and I doubt that there is any difference at all. Revealed preferences is a great tool and can help us economists with a lot of things, like for example how much more we should spend on road construction to statistically save one more life.

This is mostly speculation on my part, but I hold my stance of criticism on this issue.

Posted by: Rasmus at Feb 23, 2007 5:58:38 AM

Bruce: this doesn't seem to be true if you buy the survey data. income, wealth and happiness all appear to have separate effects, at least on reported life-satisfaction.

Steve: Yes. Lots of people are looking at similar things - though usually with scans of brain activity rather than serotonin levels.

Madsocialscientist: (1) happiness studies aren't consistent with this framework. they (IMHO rightly) reject it. (2) it depends how you're using the data, but many applications require only that reports are comparable over time for the same individual. interpersonal comparability isn't (necessarily) necessary.

rasmus: revealed immigration preferences can only show happiness-at-home < expected-happiness-elsewhere. because the RHS expectation may be mistaken, we need to be careful about what we infer about the LHS from a decision to move. Lots of people leaving may just indicate that people are particularly prone to "the-grass-is-greener" type fallacies.

Posted by: conchis at Feb 23, 2007 6:18:10 AM

whoops, first sentence should have read "income, wealth and consumption all appear to have separate effects..."

p.s. there's lots of good discussion of this over at CT.

Posted by: conchis at Feb 23, 2007 6:20:18 AM

I get a strong feeling that happiness research is frowned upon by a lot of economists because it threatens the motivation behind the one thing they know how to do well: create growth.

There's pretty strong evidence that the ideal conditions for creating growth (such as insecurity, high labor mobility, and increased inequality) are not conducive to happiness. If one decides that even the desired end-product doesn't produce happiness, then it's a pretty short road to asking why we're making ourselves miserable pursuing an outcome that doesn't make us happy.

And if we do that, then a lot of economists holding hammers get told that the world is not necessarily a big nail.

Posted by: Tom West at Feb 23, 2007 6:20:53 AM

conchis: I agree, and you eloquantly put forth what I was trying to say. Maybe I wasn't clear on what I was trying to say, but revealed preferences is not a good way of measuring things like this, especially not through immigration (this was suggested by someone on the original paged that is linked).

Posted by: Rasmus at Feb 23, 2007 6:41:13 AM

rasmus: You're right, and sorry if I gave the impression I was disagreeing with you. I was mostly just trying to clarify that the implication of "immigration can't show happiness" is that "emigration has a lot of difficulty showing misery too".

Posted by: conchis at Feb 23, 2007 7:45:53 AM

There's pretty strong evidence that the ideal conditions for creating growth (such as insecurity, high labor mobility, and increased inequality) are not conducive to happiness.

There is strong evidence that the lack of growth is not conducive to happiness and that countries where people anticipate a future that is worse (or no better) than the past is neither a happy country, nor an open, tolerant country. See The Moral Consequences of Economic Growth. And nor is there evidence that levels of happiness are low in countries with dynamic economies (the U.S. and Ireland for example) nor that those levels are high in lower growth, more statist European economies. Quite the reverse seems to be the case: Americans Remain More Optimistic and Satisfied with Life than Europeans.

But you're right that there is a very strong political undercurrent to this purportedly scientific debate. The old lefty belief was, "Centrally planned, statist economies will eliminate the inefficiencies of capitalist competition and grow faster." The new lefty belief is, "Although statist economies grow more slowly, they make people happier." Both claims are seductive but neither turns out to be true.

Posted by: Slocum at Feb 23, 2007 8:03:00 AM

slocum: i think you're making claims that go rather further than the evidence supports.

The impact of growth rates (as opposed to income levels) is underresearched (and difficult to pin down because you end up relying either on highly problematic claims about the comparability of self-reports across countries, or end up with relatively low variability within countries (Russia's an exception to this, but may be problematic for other reasons). I've not seen anyone (yet) try to test econometrically friedman's hypothesis that growth makes people care less about relative income effects. There is evidence that Americans care less about inequality than Europeans. But whether they care less about insecurity (which I think Tom is probably right about the negative effects of) etc. is an open question, and i'd be as sceptical of any claims that they're happier overall as claims to the contrary.

I'm doubt you're completely wrong. But you're seriously overselling the strength of your case. Ultimately it's unlikely that either "growth is pointless" or "growth at all costs" is a sensible approach. It's all about tradeoffs at the margins people.

Posted by: conchis at Feb 23, 2007 8:54:42 AM

I think how happy people behave is the best measure of how happy people are. How often people smile and laugh suggest a great deal about how happy they really are. Yeah there are movies and stories about people that appear to be happy and are really sad. But we make stories about exceptions rather than rules. Things are usually how they appear. I think people have pretty solid knowledge of how happy they are. People have seriously flawed knowledge about how happy they were. And people, I would guess, would consistently undervalue the happiness of others. Kind of like how everyone thinks that they're above average at driving. Only worse.

So in a way it seems like a child knowing how tall they are but not knowing how tall anyone else is or how tall they were before.

Posted by: Michael Foody at Feb 23, 2007 9:11:13 AM

michael: on perceptions of others happiness, there's actually evidence that one's own happiness positively influences how happy one rates others: happy people think other people are happier than they are and unhappy people think others are unhappier. that seems to me to cut against your intuition, though without proving that it's wrong.

Posted by: conchis at Feb 23, 2007 9:32:13 AM

Even if inequality, for instance, made people unhappy, should we care (on an ethical level)? The fact that I'm jealous of my neighbor's Ferrari is not a good reason to impose a social system where he doesn't have a Ferrari and neither of us are materially any different, isn't it?

Further, the mapping of utility to "happiness" is making a philosophical leap that I'm not ready to accept. 'More satisfaction' might be a better term for what we mean by "Agent A prefers Bundle A to Bundle B."

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