But what is happiness? Here’s a man who thinks he has some answers: ‘People in the West have got no happier in the last 50 years. They have become much richer, they work much less, they have longer holidays, they travel more, they live longer, and they are healthier. But they are no happier. This shocking fact should be the starting point for much of our social science.’ The speaker is economist Richard Layard (Lord Layard to his peers). Layard believes that ‘happiness depends on a lot more than your purchasing power. It depends on your tastes, which you acquire from your environment â€“ and on the whole social context in which you live’. Layard compiled data collected in the US by the General Social Survey and the Gallup Organisation which asked people to rate their own levels of happiness. The results are shown in the diagram. Broadly similar results were found in Europe and Japan; despite a 6-fold rise in income per head, the Japanese show no change in happiness levels since 1950.
Students were asked to choose between two imaginary worlds; in the first they would earn $50,000 a year while the average for everybody else would be $25,000, while in the second they would earn $100,000 against an average of $250,000. Conventional economics would suggest that any rational individual would choose the latter option since they would be twice as well off. Actually, a majority plumped for the former; they were happier to be poorer if that meant they were higher in the pecking order. Interestingly, the same did not apply when the researchers looked at holidays. In one world, students would have two weeks off while others had one week’s vacation; in the second they would have four weeks off and everybody else would have eight. This time only 20% of the students plumped for the first option, suggesting that they valued extra leisure more highly than they valued extra income.
If you knew you were going to die in a year, which would you value more highly – money or time? What if you had a month or a week? What if you have 40 or 50 years. Does it make a difference how long you have?
I am not surprised by these findings, but I don’t necessarily agree with Lord Layard’s reasons for happiness. Taste, which we acquire from our environment – and the whole social context in which we live? I don’t think so. I think happiness is more personal in nature. Influenced by the social context for sure, but not necessarily a result of it.