Happiness & Public Policy

I nominate Andrew Oswald of Warwick University as the new champion of the egregiously bad happiness policy op-ed. In this Financial Times piece (unfortunately behind paywall) Oswald touches on every worn trope of politics-masquerading-as-social-science happiness studies, and in the process reveals himself to be less than honest.

Oswald writes:

The hippies, the Greens, the road protesters, the downshifters, the slow-food movement–all are having their quiet revenge. Routinely derided, the ideas of these down-to-earth philosophers are being confirmed by new statistical work by psychologists and economists.

He is clearly excited by this.

Oswald goes on unreflectively to accept the quality of the survey data, and then gives badly undersupported interpretations of that data in order to reach his desired conclusion. This is a problem given things Oswald has said elsewhere, as we shall see. For now, let me stress, as I’ve pointed out on this blog, the happiness surveys and the depression data prima facie contradict one another. Either this hasn’t occurred to Oswald, or it doesn’t bother him, for he jumps, in the usual style, straight from the survey data to the depression data:

Using more formal measures of mental health, rates of depression in countries such as the UK have increased.

As I’ve also emphasized, the depression data are so corrupted by the arbitrary boundaries of the diagnostic category with which these “formal measures” are made, and by the structure of perverse incentives encompassing pharmaceutical companies who would like to sell anti-depressant drugs, people who may or may not be depressed who would like to get them, and doctors who would like to be reimbursed by insurance companies for prescribing them. And, again, allegedly rising rates of depression do not show up in the percentages of people who report themselves in the lowest category of happiness on surveys.

Fourth, suicide statistics paint a picture that is often consistent with such patterns.

Check that sentence out. I like the “often consistent.” In the hedge there is a glimmer of conscience. But here we go anyway:

In the US, even though real income levels have risen sixfold, the per-capita suicide rate is the same as in the year 1900.

I was just looking at the suicide rates the other day. First, it is true that they are remarkably stable. The only big spike detectable in the 20th C. US data came at the Great Depression. Speaking of depression, wouldn’t you think that severe depression was a contributing cause of suicide? And so wouldn’t a stable trend in suicide be prima facie evidence against an explosion of depression? Well, you would think. And isn’t the assumption of Oswald’s proposition simply baffling? That increases in real income ought to decrease the suicide rate? Has anyone ever thought that not enough money was the main cause of suicide? Might it not be just as likely that that the stability of the trend has to do with the stability in the trend of jilted lovers, frustrated dreamers, number of people with organic mental disorders, sudden losses of status, etc. The statistic in isolation means exactly nothing. “Often consistent.” And so very often not! Why mention it at all, as if you know something? The data is also “often consistent” with the hypothesis that the suicide rate remains steady at a very low proportion of overall deaths during times of high economic growth, but spikes during times of no growth, or constriction, such as the Great Depression. I don’t know that that’s not true. Does Oswald?

Toward the end Oswald writes:

Economists faith in the value of growth is diminishing. That is a good thing and will slowly make its way down into the minds of tomorrow’s politicians.

And thus it is clear what Oswald’s aim is. I know a number of economists read this blog? Tell me, is your “faith” in the value of growth diminishing? Do you think the world would be a more happy or a less happy place if world GDP growth slowed, such that the incomes of all the billions of people living in abject poverty (for whom the effect of income on happiness appears to be profound) grew at slower rate? I wonder Benjamin Friedman thinks!

The real kicker here is that it is quite clear that Oswald knows that the survey data are too ambiguous to actually sustain the interpretation he puts on them, and therefore too weak to actually support his politics.

In this short, stimulating paper, Oswald makes an excellent point about the self-report surveys:

The key point is that we do not know the shape of the function relating ‘reported happiness’ to actual happiness. This is a serious problem when researchers try to make statements about the curvature of relationships — though not as serious when we talk, as most of the happiness literature does, about the direction of relationships.

To put this in a different way, happiness survey answers tell us which way is up or down. They do not persuasively tell us the speed of the rise or fall.

It seems reasonable — given only mild assumptions — to argue that we have established, say, that greater income buys greater happiness, ceteris paribus. But in my judgment we have not done sufficiently more than this to allow us to be confident about rates of change. [emphasis mine]

What is Oswald saying? He’s saying that the survey data are an incredibly blunt instrument, and may be useful for detecting gross relationships, but otherwise not so useful because we don’t even know if there is a lawlike relationship (the kind necessary to support valid scientific generalizations) between the way people talk about happiness and the way that we actually feel.

(Oh, and it is reasonable to say that we have established that other things equal greater income buys greater happiness. I don’t think the readers of the FT were informed of this.)

Later in the same short paper, Oswald throws out a quite plausible hypothesis about why rates of self-reported happiness might not increase, even if the objective quality of subjective experience was improving. While he doesn’t draw this out, if true, the surveys would under some conditions obscure even the direction of the relationship between talk and fact by obscuring that there is a direction of the relationship.

Imagine, for example, that there is constant marginal utility of income, but that people, as they get happier, mark themselves happier on a questionnaire scale but do so in a way in which they are intrinsically reluctant to approach the upper possible level on the questionnaire form (the 5 on a 1-5 scale, say). Then the reporting function itself is curved, and we will have the illusion that true diminishing marginal utility of income has been shown.

Which is just to say, Oswald knows perfectly well that happiness surveys may systematically fail to track increases in well-being. And so we must conclude that he is pretending in public to know things that he does not know; that he is representing to the public mere conjecture as “scientifically proven” fact in order to serve his already settled political convictions. It is no doubt inconvenient to be fully honest about your own methodological objections to data you would like to use to foist the politics of “the hippies, the Greens,” etc. upon the unwilling. But, in the end, it is also inconvenient to sully your reputation by torturing data to fit your dogmas.