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Does Being Well-Off Make Us Happier? Problems of Measurement

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Abstract

The article uses General Social Survey data (GSS) collected by Statistics Canada from 1986 to 2005 and experience sampling data (ESM) collected in 1985 and 2003 at the University of Waterloo to examine relationships between economic growth, household income, and subjective sense of well-being. The article puts to a test two propositions made by Easterlin (Nations and households in economic growth: Essays in Honor of Moses Abramovitz. Academic Press, New York, NY,1974), namely that personal and household incomes correlate positively with subjective well-being, but this does not apply to the relationship between subjective well-being and societal economic growth. Analyses of GSS data reported in this article support Easterlin’s findings. They show that higher household incomes correlate positively with respondents’ retrospective assessments of life satisfaction, but economic growth has not been accompanied by a corresponding rise of subjective well-being. Analyses of ESM data suggest that when relationships between household income and subjective well-being are measured by “experiential” measures (Csikszentmihalyi and Larson in J Nerv Ment Dis 175: 526–537, 1987), these relationships are not statistically significant and subjective valuations of well-being taper off at the top of the income pyramid.

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Notes

  1. Je ne sais rien de plus fatigant que d’être moralement très-heureux et materiellement très-malheureux. Honoré de Balzac, La Maison Nucingen (1838) http://www.feedbooks.com/book/1901/la-maison-nucingen.

  2. http://www.humanistictexts.org/democritus.htm#_Toc509721146.

  3. www.jfklibrary.org/Historical+Resources/Archives/Reference+Desk/speeches/RFK/RFKSpeech68Mar18UKansas. For reasons underlying growing interest in subjective measurements of well-being see also Van Praag and Ferrer-i-Carbonell (2004) and Layard (2005).

  4. Different terms have been used to distinguish traditional recall assessments of subjective well-being (e.g. retrospective, remembered, global, reflective, cognitive) from the “on the go” assessments of daily life as it happens (process benefits, experienced utility, instant utility, momentary, affective). There is some ambiguity in all of these terms and hence a lack of consensus. We use the term “retrospective” (borrowed from Juster and Kahneman) in this article interchangeably with such terms as “generalised” or “recall” to emphasize the generality of traditional assessments of life satisfaction as opposed to situationally specific or instantaneous ESM valuations (How do I feel at the moment of the beep?). The policy implications of these two different measurements are commented upon in Section 7” of this article.

  5. For further discussion of differences between retrospective and ‘instant utility’ measures of subjective well-being see Gershuny 2011.

  6. ESM surveys were supported by grants from the Canadian Federal Department of Fitness and Amateur Sport and Social Sciences and Humanities Research Council of Canada.

  7. Additional information about analyses of ESM data can be found in Csikszentmihalyi and Larson (1987), Alliger and Williams (1993), Stone and Shiffman (1992), Hektner et al. (2002).

  8. A glimpse at 2010 GSS data released after the submission of this article shows that life satisfaction ratings of employed adult population fell from 7.7 points in 2005 to 7.5 points in 2010 in spite of a 10 % growth of the PDI.

  9. Unlike notions of “social comparison” or “relative income,” widely used in the discussion of the relationship between income and subjective well-being, the notion of “societal expectations” refers to a generalised longing for better socio-economic conditions, compared with the past rather than with other income groups or countries. The discourse about socio-political effects of rising and unfulfilled expectations goes back to Tocqueville (1856), Durkheim (1893), and Merton (1949).

  10. http://www.csls.ca/data/ipt1.asp. and http://www.indexmundi.com/canada/unemployment_rate.html.

  11. Quelque différence qui paraisse entre les fortunes, il y a néanmoins une certaine compensation de biens et de maux qui les rend égales. Francois de La Rochefoucauld, Maximes (1664).

  12. Pineo-Caroll-Moore socio-occupational classification of occupational groups is based on respondents’ occupation and their position within it. Professionals and high-level management, who ranked at the top of the occupational prestige scale, constituted in 1998 12 % of the employed population. Based on 2006 census data they earned around C$ 120,000–140,000 per annum. See 2006 Census of Canada: Topic-based tabulations. Employment income. www12.statcan.ca > Topic-based tabulations.

  13. This phenomenon has been observed already by John Robinson (1977:162) in his analyses of the 1965–1966 U.S. time use data, when he wrote that “contrary to the positive value placed on free time in our society, greater life satisfaction generally was associated with less rather than more available free time.” Similar findings, based on Canadian GSS data, were reported by Zuzanek (2009).

  14. See http://pewresearch.org/pubs/301/are-we-happy-yet.

  15. See medscape.com/viewarticle/410643_2; and scholar.google.ca/scholar?cluster = 14820006922170499690&hl = en.

  16. According to Duesenberry (1952), utility obtained from consumption is not so much a function of the size of the expenditure or income, but rather of a comparison with the expenditure or income of other people, usually positioned in the higher income bracket, hence the notion of “relative income.”.

  17. Effects of differences in framing SWB questions on survey findings are discussed by Graham (2009). See pp. 35 and 214.

  18. The 2003 ESM survey shows that spending time alone correlates with affect negatively (“r” = − 0.10), while time spent in the company of children, friends or partners correlates with affect positively (“r” = 10, 12 and 0.17 respectively).

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Acknowledgments

The author would like to thank anonymous reviewer # 1 for a series of constructive suggestions and Alexander Graham for assistance in preparing the manuscript of this article.

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  1. Faculty of Applied Health Sciences, University of Waterloo, Waterloo, ON, N2L 3G1, Canada

    Jiri Zuzanek

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Zuzanek, J. Does Being Well-Off Make Us Happier? Problems of Measurement. J Happiness Stud 14, 795–815 (2013). https://doi.org/10.1007/s10902-012-9356-0

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