Q2 2021: The use of data to improve human lives

In our Q1 2021 research article we discussed how to structure policy analysis in order to improve human lives. Part of our proposed framework was creating a dashboard of economic and social indicators that allows policymakers to produce data and values-driven policies. The idea is that the trends observed in the data should form the policy strategy of the government - thereby increasing transparency and accountability, as the government is clear from the outset with regards to what they a looking to achieve.

The link between the governments policy strategy and the policies that get put into practice is that the strategy should inform where resources are spent and attentions are focussed. The individual policies will look to generate the optimal allocation of resources with respect to the the governments overarching policy strategy. The strategy will also help to lock in formal objectives for the government and the dashboard will show how the government is performing against these objectives.

The aims of this approach are multi-faceted. In particular the emphasis in this article is towards increasing trust in public institutions. Countries with higher levels of trust in the governments tend to have happier citizens, all else equal. We also saw that countries with higher levels of trust performed better during the recent COVID-19 pandemic. In some advanced economies, such as the US, trust in government has been steadily declining for some time. 

In the paper we look to outline guiding principles for how to structure a framework for using data to form a governments policy strategy, as well as principles for building the dashboards too. These are briefly outlined below, and explained in more detail in full article.

The slides from the presentation in the video above are available here. Or, to read the full research article, please click on the link below.

Q4 2020: The Exploring Happiness Index Methodology

At Exploring Happiness we have been building this index for some time. Last year we wrote two research articles that looked at the theory and evidence in relation to the determinants of life satisfaction. The detail included in these research articles played a role in the calibration of our index. In our default calibration, we use the same six determinants that we highlighted back then as the foundations of our index. The concepts that we used to build the index were simple. We look to capture the fact that everyone is different and what makes each of us happy is also different. Some people are career-driven, others live for the social scene and some are highly family-orientated. Despite this, we all also have a lot in common – we all value our health, both mental and physical, the quality of our personal relationships matters a lot and we all like to have something to do that makes us feel worthwhile.

We make our index unique for each user by creating the functionality to allow users to personalise the index, based on their own circumstances and preferences. Users are able to choose how important each of the components that make up the index are to them, and as a result the weights within the index will shift to reflect that.

In addition, our index considers the different stages and circumstances for each of us in our lives. Our base calibration is built towards the most common ‘individual type’ - an employed worker. However, when users create their accounts they will choose from a list of 13 different individual types such as parent/carer, student or retired and as a result of this choice the components that make up the index will change to reflect that individual types circumstances.

So thats the concept, but what’s the purpose? We see there as being three main benefits from using the index.

1. Being informed: If we assume that each individual’s objective in life is to maximise their own happiness, which we think is a fairly reasonable assumption, then it’s likely to be useful to know how happy you are now and how happy you have been in the past. Our decisions, big or small, will play an important role in determining our happiness and we are more likely to make the right decision when we have better information available to draw upon. The usage of this index provides users with this information.

2. Mental health tool: Using this index allows users time to reflect, to think about what has been going well and what has been more challenging. There is also a significant amount of research available which points to the benefits of self-reflection on mental health. This has been shown for self-reflection in a number of forms (e.g. from expressive writing to gratitude journaling), across various life stages and as an effective treatment for those with diagnosed mental illnesses. Our view, which we intend to robustly test in the future, is that users of the index will be able to build resilience to mental health illnesses through the method of self-reflection that this index requires.

3. The ultimate tracker: Nowadays, it is not uncommon to track several parts of our lives, from steps to sleep to calories. But whats the point in tracking these things? For most people, it’s because they believe if they do more steps or sleep better, they will end up feeling better. This index allows you to check whether thats true in practice.

The index methodology paper linked below outlines the evidence used to select the variables that make up the index, how this evidence feeds through to the calibration of the index and then how the base calibration is adjusted according to the users choices about their preferences and circumstances.

The determinants of a happy life: the evidence

In the previous article we spent some time discussing the foundations of this topic and we were looking at how happiness distributions are formed. Our main goal in that article was to highlight that it’s important for each of us to know where we sit on a happiness distribution, and which if life’s determinants are most important to us. From there we can make more informed decisions based on our own preferences.

This time round we are turning to the evidence to see what are the most important determinants that come up time and time again studies related to this topic. There are five main determinants (and one bonus one that we think is important) that tend to stand out (in order of importance):

1. Family relationships: In almost every study of the determinants of happy lives, your family relationships and your close private life are deemed to have the greatest impact on your overall happiness. Becoming divorced or seperated has a significant negative impact on your short term happiness. Although it can turn out to have a positive impact on your happiness if the separation leads to an improvement in your overall wellbeing. The evidence of the effect of having children is very mixed. Having children can increase the level of purpose in one’s life but often it leads to less pleasure due to having less free time. Typically, marriage increases your happiness and there are many knock-on effects that benefit both of your lives: you share resources, you give love towards one another, you have better sex lives than single people (more of it and more satisfying) and you tend to be healthier and live longer, on average. As we have mentioned many times, these results are averages and there will be a lot variation around these results. The variation in relationships tends to depend on the quality and stability of the relationship and this matters a lot more than just being involved in one. 

2. Financial situation: Our financial situation can be subject to a great degree of variation depending on our circumstances. We know from extensive studies on this topic, that typically the effect of an increase in income on our happiness is positive but diminishing. There are many factors that play a role in this relationship, such as the current size of the “safety net” we have available to ourselves and how this is impacted should a financial shock occur such as becoming unemployed. If becoming unemployed severely impacts your ability to meet your mortgage payments in the coming months then it’s likely to have a bigger impact on your happiness, through increased stress, than for someone with a large safety net. Expectations matter too, if you already anticipated your wage increasing then this is likely to have a small impact on your overall happiness. Studies that have included relative income suggest that your happiness is strongly affected by who you compare yourself to. If your comparison group also receive a pay increase when you do, the impact on your happiness from this increase in income is very limited. 

3. Work fulfilment: Employment increases our sense of purpose and makes us feel happier. In most cases it offers an opportunity for social interaction, it increases our feeling of worthwhileness and gives us a reason to get up in the morning. Therefore, it is unsurprising to find that in most studies it stands out as one of the most important determinants of how happy our lives are.

4. Community & friends: The quality of our community is incredibly important for determining whether we make friends, the types of relationships we have with our friends, and whether we feel safe. It is not easy to measure this accurately so typically researchers tend to focus on asking questions to participants related to trust. If we have good relationships with our friends, we should be able to trust them, and we should also feel safe too. In Japan, less than 2% of people have reported falling victim to an assault over the last 12 months, which is one of the lowest rates in OECD – despite this a large proportion of participants in the OECD better life survey rated this as one of the main priorities for their country. This would tend to suggest that for people in Japan the effect of community and safety on their overall happiness is greater than for people in other parts of the world.

5. Health: Both physical health and mental health have significant impacts on our overall happiness. It is an important determinant of how happy we are. Having said this, healthy members of society do tend to over-estimate the loss of happiness that people actually experience from many of the main medical conditions. The data has shown that we can adapt quite well to a drop in our physical health through changing what we tend to focus our attention on. We find other ways to obtain purpose and pleasure. Having said this, people tend to never adapt to chronic pain or to mental illness and this is why the effect of mental illnesses on overall happiness level always supersedes the affects from physical illnesses. 

6. Leisure time: Most of us use our free time to do things that we enjoy, and this makes us happier. Having said this, often it is the case that there are many other activities that we would prefer to be doing during our free time but for one reason or another, we don’t. Essentially, we aren’t fully considering all our preferences towards different activities when we are making decisions about how to spend our free time and this leads to a sub-optimal outcome. This is why we feel that tracking your happiness through time, to get a better understanding of your preferences should lead to a better allocation of your time, therefore making you happier.

The determinants of a happy life: the foundations

This month’s article is the first half of a two-part study into the determinants of what makes a happy life. This is all part of a broader piece of work we are doing at Exploring Happiness, but all will be revealed with respect to this in good time. This article focuses on building some foundations for thinking about this topic, which are vital for understanding what will follow, as we aim to construct a framework for assessing how happy our lives are. To simply say that it’s complicated would be a cop out but there certainly isn’t a ‘one-size fits all’ approach to solving this problem. We are all different and we will outline in this article how our differences shape our happiness.

In next month’s article we will turn to the evidence currently available related to key components of our lives and how important they are in determining our happiness. The results in this paper will typically be averages based on large sample studies and therefore each result will have distribution of responses around this average. For example, a result may say: an increase in your income of 50% leads to an increase in your happiness on a scale of 0-100, of 10% on average. Of course, it is not 10% for everyone, this is just the average across all the people in the sample. In this month’s article we are focusing on understanding more about this distribution, since it is this that shows how we differ. We cover four main topic areas which we have summarised below:

1. Attentiveness: At Exploring Happiness we subscribe to the view that your happiness is determined by how you allocate your attention. What you think about, tends to drive how you behave. And this in turn, determines your happiness. Using this logic, you can conclude that you will be happiest when you can allocate you attention as best you can. This theory stipulates that the same life event can happen to two very similar people and the effect on their happiness can differ depending on how much attention each individual allocates to this event.

2. Preferences: Each one of us has their own likes and dislikes and it is this, that at least in part, determines how we choose to allocate our attention. Therefore, if it is our allocation of attention that determines our happiness, then we need to think about how our different preferences towards things determines how we allocate our attention. Unfortunately, there are a couple of problems with this. Firstly, our attention isn’t always allocated consciously, often we find ourselves thinking about things entirely subconsciously and this may or may not be consistent with our true preferences. And secondly, often we don’t actually know what our true preferences are, and in actual fact, we may be allocating our attention towards our dislikes rather than our likes in some cases. So, this makes the whole situation a little murkier and more complicated ‒ such is life. 

3. Track your happiness: So, we know what the goal is: we want to best understand our preferences towards different elements of our life so then we can make well-informed decisions about how to allocate our attention. Therefore, we have created the following spreadsheet that you can download: here. The spreadsheet that allows you to track how you feel on a daily basis. Give yourself a score from 0-100 each day, and then answer a range of different questions we have provided for you to ask yourself each day so you can start to build a daily log of what you did that day (whether you socialised, exercised, chilled out or studied etc.). Don’t feel that you only have to stick to answering the questions we have provided in the spreadsheet, add some of your own questions that you think might be more relevant to your own circumstances. The aim is that you understand your preferences towards things a little better and therefore you can look to allocate your attention in a way that is consistent with this.

4. Balancing different forms of happy lives: Before leaving you to get stuck into this new tool that we hope will be your ticket to a happier life we want to briefly touch on the different forms of happy lives. This should hopefully help you to understand that we can all lead equally happy lives but in completely different ways. There are many different theories on this topic, positive psychologist ‒ Martin Seligman, is one of the most famous with his views on the ‘good life, the pleasant life and the meaningful life’. The ‘pleasant life’ is one full of positive emotions and raw feelings. The ‘good life’ is related to Mihaly Csikszentmihalyi’s famous psychological concept of ‘flow’. A person that is capable of engaging in ‘flow’ regularly is one that participates often in activities that require the perfect balance between a high level of skill and a high level of challenge. Professional athletes are one of the best examples of people that are highly capable of ‘flow’. This feeling can increase your happiness rapidly and is a very different form of pleasure since during ‘flow’ you don’t feel anything because you are entirely absorbed in what you are doing. Finally, the ‘meaningful life’ relates to contributing towards something that is bigger than yourself. Using your strengths and skills to benefit others is a good example of this.

Consider the different forms of happy lives as you track your daily happiness, for most people it’s about managing the trade-offs to gauge the right balance. And to add a final spanner in the works before we finish, we should mention that your preferences will change over time. This will mean as you start to make more informed decisions based upon a better understanding of your likes and dislikes, you will need to ensure that these choices remain consistent with your current objectives as your circumstances change. Good luck.

How do you measure happiness and wellbeing?

Measurements of happiness and wellbeing allow policymakers to track progress over time. Bhutan was the first country to do so periodically, creating a Gross National Happiness Index in the 1970’s, as a measure of progress to replace GDP. We chose this to be the topic of our second research article because it is the area that happiness economics tends to get the most cynicism. Many cynics argue that measures of happiness are too weak to be used in statistical analyses, due to the lack of reliability in the subjective nature of the responses.

Our research shows that whilst happiness and wellbeing measures aren’t perfect, they do produce statistically significant and highly informative results. Importantly, due to the data being noisy, the accuracy of the results improve, as the sample size of participants surveyed increases.   

There are a range of different happiness and wellbeing measures available, some are more useful in particular settings than others, depending on the policy purpose they are being used for. No one measure is superior all the time. We summarise these below:

• UN Happiness Indicator: as part of the ‘World Happiness Report’, the UN produces a global distribution of happiness bringing together subjective wellbeing measures (SWB) and economic and development indicators into one overall measure. We have our reservations regarding the question used for the SWB measure (known as the Cantril Ladder), however the overall index produces results that are informative and intuitive at a macro level.

• Happy Planet Index: this was developed by the New Economics Foundation and it is a measure of sustainable wellbeing. Given the goal, at Exploring Happiness, when developing research is: “increasing happiness and wellbeing in society in a sustainable way” , it is highly relevant for our work. Essentially, the aim is to estimate how efficiently residents of different countries are using natural resources to live long ands happy lives.

• ONS Wellbeing Measures: these measure were developed in 2012 and we think the simplicity of questions asked will create more consistent results than other measures. In the UK, they ask participants in their quarterly ONS surveys four questions that relate to four different areas of wellbeing: life satisfaction, life worth, happiness and anxiety. The data only currently covers 6 years, so as the time series extends it will become more and more useful for policy analysis.

• Cross-country surveys: the European Commission has been asking countries within the EU a life satisfaction question since 1973. The length of the data is great, unfortunately, the available answers to the question are limited, which doesn’t allow for much differentiation across participants. The World Values Survey is an extensive survey across 100 societies, which asks several wellbeing related questions in many different ways, which allows researchers to test consistency in responses. The Pew Global Attitudes Survey has collected 38,000 responses from 44 different countries to the same Cantril Ladder question as used by the UN.

• Other Measurement Studies and Indexes:  The OECD Better Life Index doesn’t actually rank countries, it allows the user to do it themselves. They identified 11 topics that they felt contributed towards wellbeing but leave the weighting (from 1-5) on each topic up to you. They also release results of how people within each country choose to weight the different topics, which offer an interesting insight into what people think matters most around the world. The Human Development Report is useful for research focused on quality of life and development. They have expanded on the human development index to also focus on poverty, gender development and inequality. The International Organisation of Migration produces reports that study wellbeing and development of migrants. Their migration data portal covers a highly diverse range of variables which are relevant for wellbeing policy analysis.

Our research has provided us with a great level of comfort in relation to the reliability of happiness and wellbeing measures from a range of different perspectives:

• Hard evidence from Neuroscience: Experimental psychologists and neuroscientists have shown that happiness measures correlate with activities in the parts of the brain associated with pleasure and satisfaction. A recent study scanned 51 individual’s brains using MRI, before answering a series of questions about their happiness and satisfaction with life. They focused on the precuneus, a part of the brain related to consciousness, our sense of self, and as a consequence, happiness. And, fascinatingly, those who scored highly on the happiness survey exhibited significantly more grey matter in that part of the brain than those who scored low.

• Linguistic differences are small: A frequent criticism of cross-country happiness measures is that linguistic differences across countries mean that responses are not likely to be consistent. Studies have shown that whilst a persons culture (e.g. collectivist or individualist) can significantly impact their happiness, this is consistent across individuals and cultures, and comparing for language effects has a negligible impact on the final results.

• Personality traits matter less at a national level: Research focused on different types of measures of happiness, found that personality traits accounted for a significant portion of the variability in an individual’s self-reported happiness score. Further research is necessary to fully understand what are the personality traits that lead to differences in an individual’s happiness, but for policy analysis at the population level, these differences matter much less due to the approach of taking averages. Essentially, the policymaker is mostly concerned with the distribution of happiness within a country, while accepting that individuals characteristics mean they have a greater capacity for satisfaction than others.

  For more detail on happiness and wellbeing measures and greater depth on their reliability, please click on the link below or check out the video above.