According to a New York Times Op-ed column, women in America are less happy today than they were in 1972 while the men are happier. This trend is there in spite of much that women have achieved in three and a half decades. Women of 2008 are more educated, richer, and more equal than they were in 1972. Yet they are unhappier. It seems our achievements do not make us happier, at least not in the way we measure happiness.
How should we measure happiness? This is an important question in behavioral sciences like psychology and economics. Economists rely on actual choices and decisions that people make–the revealed preference–to measure utility and welfare. Stated preference gets less credence. What people do, and not what they say, is a better reflection of what they actually want or value: this has been an article of faith in economics. Now the premise is being challenged. According to Kahneman and Krueger:
“If people display bounded rationality when it comes to maximizing utility, then their choices do not necessarily reflect their “true” preferences, and an exclusive reliance on choices to infer what people desire loses some of its appeal”.
So, more economists are using data on self-reported happiness or life satisfaction. General Social Survey (GSS), an annual survey conducted in the US since 1972, is attracting greater attention from economists. I also worked on this data once while assisting Prof Alan Krueger for an op-ed piece he was writing for NY Times. One of the questions the GSS asks americans is:
“Taken all together, how would you say things are these days? Would you say tht you are very happy, pretty happy, or not too happy?”
American’s response to this question since 1972 is used to measure trends in happiness (including in the article cited above). It is a subjective and retrospective evaluation. Now there is a difference between experienced and remembered utility; that is, “the way people feel about experiences in real-time and the way they remember their experiences after they are over”. Which one is more real: the fun we have when we indulge ourselves in the day or the pangs of conscience in the pillow in the night? Who knows!
So, in measuring happiness and life satisfaction (or welfare), economists now recognize that:
“it is fruitful to distinguish among different conceptions of utility (e.g. decision and experience utility and experienced and remembered utility ) rather than presume to measure a single, unifying concept that motivates all human choices and registers all relevant feelings and experiences”.
This makes measurements of happiness and life satisfaction all the more complicated. We should be careful when interpreting data and trends and reading articles that report on them.
My understanding of these new concepts and their place in economic science and public policy is not clear at all. When we are not clear, we quote. I have quoted a lot in this blog. Need I say more?