What is happiness? What makes people happy? How do we measure happiness? In the last 15 years, a new and challenging area of economic research has emerged. Discussion over subjective well-being and over how both individual and societal wellbeing might be improved has become a major topic of theoretical and empirical research - for example, Frey and Stutzer (2002), Blanchflower (2008), Layard (2005), and Becchetti et al. (2014) among others.
The academic debate has spread into political agenda. In 2008, the French Government nominated the Commission on the Measurement of Economic Performance and Social Progress (the Stieglitz-Sen-Fitoussi Commission) to investigate the scope of the traditional indicators used to measure economic development. The aim was twofold: to take in to greater account the environment and the sustainability of the economic development, and when measuring growth, to include measures of quality of life, inequality, and subjective well-being besides the usual economic indicator (1). As a consequence, in Sen's words, even if happiness (or subjective well-being) might not be the ultimate goal of the public policy, it can be important to recognize that "first of all, it does matter (and that is important), and second, it can often provide useful evidence on whether or not we are achieving your objectives in general". (Sen, 2008, p. 27).
Social science research generally uses large-scale surveys, containing direct questions on individual subjective well-being and on demographic and socio-economic variables--for example, the Word Values Surveys, the German Socio Economic German Panel or the National Well Being Survey by the ONS in UK and The multipurpose survey "Aspects of Italian daily life". In some surveys, questions relate to happiness, and in others, to individual well-being or satisfaction or to happiness and satisfaction. Many authors, such as Cummins (2003), Bjorskov (2010), Diener (2009), Helliwell and Putman (2004), Lim (2008), Helliwell et al. (2012, 2013), Rojas (2004), and Diener and Biswas-Diener, (2008), extensively discuss and evaluate the distribution of responses comparing different wordings and different scales. Besides, they also discuss the complexity of the relation between well-being, happiness, and satisfaction.
However, to our knowledge, the available data do not allow a direct comparison between happiness, well-being, and satisfaction in a single survey. Our work tries to fill this gap. Our main research questions are the following ones:
(1) Are the notions of "happiness", "life-satisfaction", and "well-being" equivalent empirically such that it is possible to justify the substantial interchangeability of the three notions in empirical research?
(2) In assessing self-reported happiness, life satisfaction, and well-being do the different scales used give the same empirical results?
How did we do this? We expressly designed a survey, using an Italian sample, in which, within the same survey, concomitantly participants answered questions on perceived happiness, satisfaction, and well-being (2) (Research question 1). Moreover, to measure all these three variables, we always used the same three distinct seven Linkert point scales (Research question 2) (see session 3 for details).
The paper is organized as follows: section 2 contains a short review of the literature; section 3 is a brief description of our questionnaire and survey design; in section 4, we illustrate our model; and in section 5, we provide descriptive analysis. Section 6 includes econometrics results, and section 7 includes conclusions and implications for further research.
Review of the literature
Happiness and Wellbeing--Recently, in the Subjective Well Being (SWB) or Happiness Economics (HE) literature, several authors including Bjornskov (2010), Diener (2009), Helliwell and Putman (2004) J. Helliwell et al. (2012, 2013), compared the distribution of responses across different countries. For example, by using data drawn from The World Values Survey, the US benchmark survey and Canadian survey, Helliwell and Putman (2004) compared the determinants of responses to both life satisfaction questions and global happiness questions. The authors found that, even if results that were obtained using the two measures were consistent with each other, several social indicators, as trust or unemployment exerted a stronger effect on life satisfaction than on happiness. However, in Helliwell and Putman (2004), the authors used different scales to measure happiness and satisfaction and, as a consequence, it could be extremely difficult to separate the effect of wordings from other differences in survey design and administration of the questionnaire.
By using the data of the Gallup Daily Poll, other authors compared answers of the questions related to happiness evaluation of yesterday with answers of questions related to overall life evaluation. They found those response patterns were quite dissimilar (see Kahneman and Deaton (2010), Helliwell and Wang (2011) and (2014)). Also, Bjorskov, (2010) compared questions upon life satisfaction data from The Gallup World Poll with the ones provided by the World Values. While using the two distinct datasets, considerable differences in the results emerged. The author suggested that in the questions used in the Gallup data, differences in anchoring may cause this discrepancy. Hence, according to him, the two datasets may not be considered substitutes in the empirical analysis. On the contrary, using mainly Gallup data, Helliwell et al. (2011) found that the determinants of happiness were mostly the same all over the world and concluded that the information about the determinants of happiness could be considered robust enough. However, the same authors underlay that nevertheless, it could also be very important to understand whether there are differences in response, and if so, to which factors they might be due. The limit of the quoted literature is that the comparison between happiness and wellbeing is based on matching different international surveys (usually pair-wise comparisons) in which uniformity over questions and scales are not taken into account. See Halliwell et al. (2012).
How are happiness and well-being defined in this literature? What is the meaning usually attached to them? In the psychological literature of SWB, well-being is defined as "Good mental state, including all of the various evaluations, positive and negative, that people make of their lives and the affective reactions of people to their experience", Diener (2006) reported in OECD Guidelines on Measuring Subjective Well-being (2013), (p. 10). Moreover, Mayers and Diener (1995) stated that "SWB is defined by three correlated but distinct factors: the relative presence of positive affect, the absence of negative affect, and the satisfaction of life" (Mayers and Diener 1995 p. 11). Moreover, Lyubomirsky (2001) defines happiness to include "the experience of joy, contentment, or positive well-being, combined with the sense that one's life is good, meaningful and worthwhile" (p. 239, footnote 1). (3) As we can note, the above-quoted notions of wellbeing refer to life evaluation (cognition), affect (emotion), and to what has been called eudemonia--Aristotle's idea that life must have a meaning (4) and should be guided by virtue. The debate between a hedonic idea of happiness and a eudemonic idea has been present in psychological literature. In the first approach, happiness can be interpreted as the result of avoiding pain and looking for pleasure while in the second approach, the emphasis is genuine "relationality" and intrinsic motivation (Deci and Ryan (2001), Waterman (2007) and Bruni (2010)) (5).
In the literature in HE, happiness or well-being and satisfaction are usually considered an approximation of what traditionally economists define as utility (6) embracing the Hedonic view of happiness (7). If this were the case, then van Praag (2007) is right when he writes, "Mainstream economists mostly do not talk of happiness but of utility. As we said before, the choice of the word in this context is just a matter of taste without consequences" (p. 4). (8)
Recently, especially in the field of behavioural economics, a very active debate began on the meaning of "Utility" in Economics and on what we really measure when we measure what we call utility.
The pioneer work of Kahneman, Wakker, and Sarin (1997) "Back to Bentham? Exploration of Experienced Utility" introduced the distinction between what is called experience utility and decision utility. According to Kahneman, this decision utility is the weight that we give to outcomes in order to take a decision, while experienced utility is a hedonic experience (linked to the old Bentham concept of utility as pleasure and pain).
In this respect, experienced utility can be instant utility--the utility that we experience at the very moment we are asked about our well-being; or remember utility--the utility that comes from the memory of the past (9). In addition, utility as a whole can also be determined by predicted utility--what subjects think their utility will be in future (Kahneman and Snell, 1992). All these aspects of utility can be related amongst them. For example, decision utility can be formed by experience utility and predicted utility. See Kahneman, Wakker and Sarin (1997).
Relating this discussion to the measure of happiness, the consequence is that when we asked, "How happy are you now?" or "Do you consider yourself overall satisfied?" or "All together, how do you value the quality of your life?", we do not know exactly what utility we try to measure, since we do not know what kind of emotion in a past experience one may refer to, as different words may recall different experiences and emotions to different people. Global retrospective assessments might recall subjects' remembered utility more than instant utility. This latter...
Happiness, life satisfaction, well-being: survey design and response analysis.
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