International evidence on the social context of wellbeing

John Helliwell, Christopher Barrington-Leigh, Anthony Harris, Haifang Huang

24 April 2010

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GDP per capita is a crude measure of wellbeing. But does survey data do any better, especially when attempting cross-nation comparisons?

Economists tend to be sceptical of subjective data. Psychologists, for example, have found systematic, cross-nation differences in the ways in evaluation scales are used. This raises suspicions that cultural differences in the ways lives are lived and assessed might make international comparisons unconvincing (e.g. Diener and Suh 2000, Heine et al. 2002).

Recent research – based on a large, newly available dataset – allows more systematic consideration of key elements of subjective quality-of-life measures. For example, we can now track whether the large and systematic international differences in quality-of-life measures can be explained by differences in comparable measures of the social and economic circumstances of life. The dataset comprises several waves of the World Values Survey, and the Gallup World Poll.

Revisiting doubts about quality-of-life measures

We think that previous doubts among researchers about the usefulness of comparing measures of subjective wellbeing across cultures and over time are being resolved in favour of subjective measures (Diener et al 2009).

  • First, earlier claims that each person has a psychological set-point for subjective wellbeing to which he or she invariably returns (Brickman and Campbell 1971, Brickman et al 1978, Lucas et al. 2003) have been replaced by research showing that adaptation to most changes in life circumstances is partial in nature (Diener et al. 2006, Lucas 2007).
  • Second, experimental evidence that retrospective assessments of wellbeing differ from Bentham-like (Kahneman et al.1997) integrals of momentary assessments (Kahneman 1999, Frederickson and Kahneman 2003, Kahneman and Riis 2005) does not threaten the usefulness of retrospective evaluations of satisfaction, especially as the latter are what govern future decisions (Wirtz et al. 2003).
  • Third, in response to suggestions that freedom and capabilities, which were held to be of fundamental value to wellbeing (Sen 1990, 1999), would be left out of account by measures of life satisfaction, it has been shown that measures of life satisfaction appear to differ from assessments of positive and negative effects in just the ways that make life satisfaction an appropriate measure. (Indeed, we find that a sense of personal freedom is a very significant predictor for higher evaluations of subjective wellbeing (Helliwell et al. 2010).)

New data

The introduction of the Gallup World Poll covering surveying 1,000 respondents in each one of over 140 countries annually since 2006 has produced a much larger international body of evidence. This has had two important consequences.

  • There is a much greater range of country experiences under review, especially for poorer countries, and this has led to much stronger estimates of the effects of income as a determinant of life evaluations within and across nations.
  • It is probably the case that for many previously sceptical economists the appearance of recent papers showing tight relations between income and life evaluations (Stevenson and Wolfers 2008, Deaton 2008) has increased the credibility of subjective assessments of the quality of life.

In recent research (Helliwell et al. 2010) we use the first three waves of the Gallup World Poll to investigate differences across countries, cultures and regions in the factors linked to life satisfaction, paying special attention to the social context. Fortunately, the Gallup World Poll now includes both the standard life satisfaction question that have long been used in the World Values Survey (although now on a scale of 0 to 10 rather than 1 to 10) and the Cantril ladder question asking respondents to think of life as a ladder, with the best possible life as 10, and the worst possible life as 0, and then to use this scale to evaluate their own lives. To have these two questions both asked of the same respondents, and on the same scales, has been of great value.

We find that answers to the satisfaction with life and Cantril ladder questions provide consistent views of what constitutes a good life, with an average of the two measures providing a clearer picture than either measure on its own. Indeed, there is evidence that combining the two variables increases the signal-to-noise ratio, producing individual-level equations based on a small number of variables, with common coefficients and no fixed effects for countries or regions that account for 44% of the variance, substantially higher than found in previous research by us or others (Helliwell et al. 2010).

Furthermore, there is strong evidence for the importance of both income and social context variables in explaining within-country and international differences in wellbeing, confirming the earlier findings of Helliwell and Putnam (2004). For most specifications tested, the combined effects of a few measures of the social and institutional context are as large as those of income in explaining both international and intra-national differences in life satisfaction.

Finally, the international similarity of the estimated equations suggests that the large international differences in average life evaluations are not primarily due to different approaches to the meaning of a good life, but to differing social, institutional, and economic life circumstances. A global equation with common parameters explains 85% of the cross-country variance of national average evaluations of life. There are, nonetheless, some interesting and systematic parameter differences among country groups, as shown in Helliwell and Barrington-Leigh (2010).

Figure 1 shows the average values of the Cantril ladder and of several of its key correlates for the top four countries, the average of all countries, and the bottom four countries.

Figure 1. Wellbeing and key correlates in 4 bottom, average, and 4 top countries

The top four countries all have high per capita incomes, although significantly below those in the US. They gain their top rankings through consistently high rankings in

  • social support from family and friends,
  • the freedom respondents feel themselves to have in making life choices, and
  • the lack of corruption in business and government.

These countries are also marked by:

  • very high levels of social trust, and
  • high levels of benevolent activities.

By contrast, life in the bottom four is marked by widespread corruption, and by an absence of social supports and perceived freedom to make life choices.

We also find that the within-country inequality of the distributions of income and of wellbeing both fall as average wellbeing rises. However the distance between inequality in the top and the bottom countries is even greater for wellbeing than for income. Thus the Gini for income is 50% higher in the bottom four than in the top four, while that for wellbeing is almost three times greater in the bottom four countries.

Acknowledgements: We are grateful to CIFAR and the Social Sciences and Humanities Research Council of Canada for research support, and to the Gallup Organization for access to Gallup World Poll data.

References

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Topics:  Frontiers of economic research Poverty and income inequality

Tags:  happiness, wellbeing, social context, Happiness economics

Arthur J.E. Child Foundation Fellow of the Canadian Institute for Advanced Research

Department of Economics, University of British Columbia and Junior Fellow, Canadian Institute for Advanced Research

Nuffield College, Oxford

Assistant Professor in the Department of Economics, University of Alberta

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