Pursuing Rising National Well-being

If we are to measure well-being as part of a new measure of progress, we need to be sure that our indicators can actually change over time. There are theoretical reasons which make it unwise to simply assume this: amongst them the idea that happiness levels are mostly genetic and people adapt to different situations, but also the idea that our happiness is relative to others in our society. A recent paper by Professor Angus Deaton (2011) of Princeton University suggests that advocates of well-being measurement should be more cautious. Using data from the USA over the period of the financial crisis, he shows that changes in question order have had a bigger effect on reported well-being than the biggest economic crisis since the Great Depression, and that subsequently, policy makers should not look to well-being data as a reliable indicator of a nation‟s progress. In particular he notes the lack of an effect of unemployment rates on well-being averages.

If Deaton is right about the lack of a fall of well-being during the recession, and Richard Easterlin (1974) is right about the lack of an increase of well-being since the 1950s, then might the use of well-being indicators as measures of progress lead us into a Sisyphean nightmare?1 Constantly attempting to raise well-being, but never being able to? That is the topic of this paper, which will review Deaton‟s position, before responding with discussion and evidence from other papers.

Deaton makes some excellent points, and the impact of question order is something that should not be under-estimated. But rather than see it as a strike against the use of subjective well-being measures, it should rather be seen as a part of a lesson on when they might and might not be useful for monitoring changes over time.

Ultimately, Deaton is right to caution governments against expecting large rapid changes in reported national average well-being as a result of changes in economic conditions. But this does not detract from the value of measuring well-being for the following reasons:

•  Large changes can occur at the national level, but they take time, and sometimes a long time.
• A large part of the value of well-being data will be in the possibility to disaggregate it across different population groups, and, ideally, into different aspects of well-being, and to use it to explore the drivers of well-being.
• Economic factors are not the only ones to determine well-being. The data show that social factors are more important.