Happiness and wellbeing
ESRC SCHOOL BRIEFINGS The economics of happiness Happiness and wellbeing should be measured alongside the standard economic indicator of Gross Domestic Product (GDP), says Professor Andrew Oswald, from the University of Warwick.
His study, Macroeconomic Influences on Wellbeing, was at the forefront of the increasingly popular field of happiness research. Its findings, reported in 2003, received wide press coverage and introduced the idea that governments should be measuring not just GDP and the inflation rate, but happiness and wellbeing too.
Professor Oswald and his colleagues examined whether people are really happier when the economy is thriving, and also studied the real, human impact of recessions and business downturns; which makes it particularly relevant today.
“If asked to evaluate the cost of a business cycle downturn, most economists would measure the (small) people’s answers are systematically Researchers have calculated that, to the drop in gross domestic product.This is a affected by what is going on in the whole individual, the cost of unemployment is narrow and purely pecuniary [financial], economy,” writes Professor Oswald. equivalent to a loss of income of some approach. It may mislead us about the £40,000 a year - a figure which, for most true cost of recessions,” he writes.The When unemployment rises, everyone people, is much higher than their usual researchers used surveys such as the (the unemployed and employed alike) annual wage. British Household Panel study to create report lower levels of happiness.There is ‘happiness equations’ so they could a direct effect: some people become The researchers also found that examine how economic fluctuations unhappy because they lose their jobs. contrary to traditional 'right-wing' views, affect wellbeing. But there is also an indirect effect, strong welfare states which provide perhaps due to fear; a rise in the generous welfare provision make people “Happiness and mental health surveys unemployment rate reduces wellbeing feel happier. ask people how they feel about the even among those who are in work or quality of their lives.We show that looking after the home. This work, Professor Oswald notes, raises difficult scientific and philosophical questions about what human wellbeing Further information really is, and how to measure subtle Contact: Professor Andrew Oswald concepts such as happiness. Warwick University Email: [email protected] Telephone:+44 (0) 24 76 523510 ESRC award number: RES-051-27-0168 British Household Panel Survey http://www.iser.essex.ac.uk/survey/ulsc