If everyone had to work an extra ten hours a week in a job he hated, the GDP would rise instead of reflecting a drop in a well-being. Many economists are looking to measure well-being of the citizens of a nation beyond a simple measure of wealth, and the GDP cannot provide this additional information. One tool that has been developed is the Human Development Index (HDI). Using the HDI system, the country in question in this paper, Australia, ranks third. However, in Happiness and the Human Development Index: The Paradox of Australia , authors Blanchflower and Oswald find that using the International Social Survey Program, Australians have low job satisfaction and are not very happy compared to the other English-speaking nations. Australia serves as their example to demonstrate the ineffectiveness of the HDI in measuring well-being. The authors argue that the HDI should not be rejected, but rather that more research is needed to better describe well-being.
The United Nations publishes annually the Human Development Index (HDI). The HDI uses lifespan, educational attainment, and adjusted real income to determine human welfare. For 2004, the top-ten countries are: 1) Norway 2) Sweden 3) Australia 4) Canada 5) Netherlands 6) Belgium 7) Icelend 8) USA 9) Japan 10) Ireland The authors acknowledge that the HDI is a positive first step because it acknowledges “a broader conception of well-being than the height of a pile of dollars” (Page 10). However, they believe that it does not capture the most essential feature: happiness. Unlike the other criterion, measuring the psychological state of individuals is more difficult because it is subjective.
Happiness research is relatively new but seven points have emerged:
2) However, whole countries do not become happier as they become wealthier.
3) Women are happier than men. Unemployment and divorce hurt well-being tremendously. Even when controlling for income, more educated people are happier.
4) The broad statistical patterns of happiness look the same in every country. However, this research is almost exclusively based on Western countries and therefore, may not give a complete picture.
5) These patterns may also occur in panels of people (longitudinal data). For example, lottery winners might have similarities.
6) Good and bad events greatly affect people early on, but people at least partially adapt to them.
7) Relative events matter. Experimentally, people care how they are treated compared to others and will even pay to hurt others in order to restore fairness.
The International Social Survey Programme (ISSP) surveys 50,000 individuals from 35 nations. It asks for one to rate one’s happiness, one’s family life, and one’s principal job on a seven point scale. It also asks one to rate the stress of one’s job on a five point scale and how often one is too tired because of work to perform chores at home on a four point scale. Because Australia ranks so well in the HDI, it is logical that it would perform well in the ISSP also. However, it is in the top fifty percent for happiness, family satisfaction, work stress, and lack-of-tiredness but towards the bottom for job satisfaction.
One problem in doing surveys across cultures is that questions may not translate very well. Therefore, sampling countries with the same language minimizes biases, and here Australia compares even less favorably. One weakness in the English language comparison is that many Australians are immigrants who do not have English as they first language, and the survey is unable to correct for that. Nonetheless, the difference between Australia’s scores on the ISSP and HDI are striking. The conclusion by the authors is that the goal of economists is to improve upon the narrow focus of real income and growth, and the HDI currently is insufficient for doing so. Supplementing it with some subjective measure of happiness would improve its effectiveness markedly. .
I was disappointed with this article. I agree that the goal of policy should go beyond a mere mathematical measurement of wealth. The article provided little in explaining ways to do this. Furthermore, I am confused why the fact that Australia does well on the HDI but poorly on the ISSP is a paradox. HDI looks at income, lifespan, and education—not happiness. If the fact that Australia performs well on the HDI but not the ISSP is truly a paradox, then it was not explained well. This inadequacy makes me question the validity of their statistics even.
The most interesting paradox to me was the summary of previous research on happiness. The authors state that individuals become happier as they become wealthier but countries do not become happier as they are wealthier. They cite a study that shows that people in the United States were happier in the 1970s compared to today despite the fact that GDP per person has risen. I believe the reason why individuals become happy and countries do not is because happiness from wealth is relative to the other people. This sentiment is echoed in the observation that people will pay (lower happiness) in order for things to be fair (Observation number 7).
The article focuses on the fact that because happiness is subjective, it is difficult to measure. Given this assumption, I do not understand how research from the 1970s would be sophisticated enough to make the comparison. If the idea that countries do not become happier as they become wealthier, why isn’t the question why countries focus so much on increasing production? We already know that at the very least there is a cost in raising GDP—pollution. I would really like to see the country verse individual happiness as wealth increases explored. .