Bliss on the balance sheet

December 25, 1998

Gross happiness levels will replace GDP as a key social indicator, Andrew Oswald argues

The politician's staple notion - try to maximise material progress - is now redundant. Britain is going to have to think harder about happiness.

Any train ride in our country makes it clear that, despite pockets of poverty, we have enough Sky TV receivers and BMWs to sink a battleship. Yet there is no clear evidence that people in industrial countries such as Britain are much happier than in the 1960s, when real incomes were half their current level.

In the United States, where quality-of-life surveys have been done since the end of the war, the proportion of people saying they are happy has stayed almost flat through time. In Britain, the suicide rate among young men is fractionally higher than in the era of the Ford Zephyr. Job satisfaction levels have not risen over the years. Europe's richest countries have the highest suicide rates.

Wealth is apparently not bringing contentment. Part of the reason is easy to find in the research journals. Human beings are locked into a tournament for money and promotion. It is relative income that conveys most material wellbeing. A spectator who leaps up at a football game gets at first a much better view; by the time his neighbours are up it is no better than before.

In a nation as wealthy as ours, a focus on gross domestic product is not sensible. Broader measures of wellbeing will assume more importance as the decades pass. Before I retire, I expect happiness surveys and job-satisfaction surveys to have become a central part of British life. In 2020, newscasts will feature the country's monthly wellbeing score. The acronym GDP will have gone in favour of GHL (gross happiness level).

Where will university research fit in? To get a feel for that, let's look at current work. Imagine we choose a random sample of 20,000 Europeans from each of ten countries. We ask them questions - about their age, sex, education, marital status, income, and so on. We also include a question about how they rate their happiness, on a numerical scale, with life as a whole. Then, suspending judgement for a bit, we look at statistical links between reported wellbeing and other characteristics. Remarkably strong patterns are found. Moreover, these patterns are the same for every country individually.

The patterns look like this (the actual equations can be found on the web page below): Reported happiness is highest among people who are: highly educated; female; high income; young or old (not middle-aged); married; retired; looking after the home; and self-employed. (This list, compiled from 200,000 randomly sampled people from the Eurobarometer Surveys and International Social Survey Programmes, uses a statistical technique to allow for all the factors simultaneously.) The worst things that happen to people, according to the data, are unemployment, divorce and severe ill-health.

People with high levels of education report greater happiness scores than do the less educated. The correlation holds true for every country on which I have seen data, and after other factors (including income) are held constant. There is no deep understanding about the mechanism. It may be that education makes people more secure. We know that job security, for instance, is a rather good predictor of overall job satisfaction. The strong statistical link between education and reported happiness is intriguing.

It might be objected that happiness numbers do not mean anything reliable (my 4 might be a 2 to you). But when averaging across the population, the objection that my 4 is your 2 does not hold so much force. Moreover, psychologists and others have done many cross-checks on the validity of reports of subjective wellbeing. One can argue also that questions about happiness are impossible to translate precisely into different languages; but researchers have thought of ways to get round that objection.

One day this kind of statistical research will shape most aspects of government policy. As western society grows richer, less attention will be paid to material concerns. The social science of happiness is going to be important.

Andrew J. Oswald is professor of economics, University of Warwick.

More information may be found at Economics/person/oswald.htm

* Will a happiness measure replace GDP statistics, and how important will the social science of happiness become? Email us on

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