Sunday, 17 April 2011

The folly of the Economics of Happiness

Over at the IEA blog Paul Ormerod makes a simple point about the folly of the economics of happiness.
The fact is that the measured happiness data over time does not tell us very much at all. People have to fill in a survey on a scale of 1 to 3, 1 to 4 or even 1 to 10, of how happy they are. In prosperous Western societies, most people are fairly content most of the time. And this is reflected in the answers. But the key thing here is that almost by definition, the average happiness across a sample of such people cannot go up very much. This simply reflects the way it is measured. No-one can be more happy than the top number on the scale, so once you have answered ‘3’ or ‘10’ or whatever, there is nowhere for you to go but down!
So if we are happy now it's not clear that we can ever be more happy in the future,simply because of the way we measure these things.

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