How to measure happiness

You can be forgiven for not knowing where Bhutan is. It is a small country—its first ever census in 2005 revealed less than one million inhabitants--sandwiched between China and India, governed by a very poor monarchy, that exports little, has no formal diplomatic relations with the United States, and generally embraces reclusion. 

Internationally, Bhutan is known for two things. First, they exiled more than 100,000 of their ethnic-Nepalese minority, whose religious and linguistic views made them unfit for citizenship, to live in refugee camps in Nepal--where they were also not wanted and subsequently resettled by third parties (more than 66,000 of them in the United States since the mid-2000s).  Second, ironically, is the notion of measuring national success, not by gross domestic product, but by gross national happiness. Measuring wellbeing by contentment rather than income is certainly a noble goal in our gilded age, but how can it be appropriately measured? 

The World Happiness Report

In July 2011, the United Nations General Assembly passed a resolution inviting members to measure the happiness of their citizens. The United Nations, despites its best of intentions, is not well-suited to produce measurements of this sort—its Human Rights Council currently includes the progressive regimes of Saudia Arabia, the Russian Federation, and Venezuela among others with enlightened views of humanity. Luckily, a group of independent experts with a loose affiliation to the UN took up the task of producing a World Happiness Report that econometrically, using survey and economic data, examines the relative wellbeing of nations. 

Happiness is a subjective state of mind with objective impacts on health and wellbeing.
(Dancing certainly makes people happy and healthy—including President Obama himself in the video below)

As happiness is subjective and all, in addition to measuring wealth and social services, the authors of the report relied extensively on Gallup survey data to assess the perceived happiness of different populations. However, polling is fraught with risk--just ask those predicting a hung British Parliament back in May, woops. Who you question, how you question, and when you question will all impact the consistency and representativeness of your data. To combat these issues the surveyors relied upon simplicity and asked questions like: 

Did you experience the following feelings during a lot of the day yesterday: Anger? Happiness? Enjoyment?

Did you donate money to a charity this year?

Do you have people in your life that you can rely upon in case of illness? 

Another problem is that cultural variations between states will impact how people answer these questions in a way that could bias comparisons. To tackle this issue, the surveyors relied upon the Cantril Ladder to anchor a respondent's answers based on their own beliefs and preferences. Despite inevitable shortcomings, the surveyors presented a compelling case for their methods in the report and produced a dataset that included measures of perceived happiness, freedom, corruption, and generosity.

The stars next to column values indicate levels of statistical significance, more being better. (Source: 2013 World Happiness Report)

The chart above shows a list of tested variables and their relative impact on happiness across countries. While you cannot readily interpret the values in the columns, they are indicative of relative impact, and you can see that Log GDP per Capita (a measure of wealth) and Social support are highly significant indicators of happiness--Social support being measured as the binary response to the question:

If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?

To give you a better sense of which of these indicators have the biggest impact on happiness, the following chart shows how each of the measured variables impacts happiness across different regions of the world. 

'Base country' is an indicator of other country-specific determinants of happiness. (Source: 2013 World Happiness Report)

From the chart above you can see that wealth, social support, and healthy life expectancy account for most of the explained variation in happiness. You can also see that, taken together, North America, Australia, and New Zealand are the happiest region on the planet and Sub-Saharan Africa is the least happy. Comparing this chart with data collected from 2005-2007, happiness across the world has increased by 0.5% (although it isn't statistically significant) and there has been convergence across regions—likely the result of rising incomes across the developing world and stagnation in the rich world (for example, Latin America increased by 7% and Western Europe declined by 3.2%). What about for specific countries? 

(Source: 2013 World Happiness Report)

The idyllic and homogenous countries of Denmark, Norway, and Switzerland lead the pack in happiness and, in case you were wondering, the West African country of Togo was the least happy (only 154 of the more than 200 possible countries had sufficient data to participate and it is likely that one of these would in fact be less happy than Togo). In the top 10 happiest countries, there are no countries with populations larger than 50 million and only two outside of Europe—large states tend to have more competing interests and be harder to govern. Also not surprising, Greece had the largest fall in the rankings since its previous incarnation—perpetual crisis and austerity taking their toll on the collective Greek psyche. 

Mental health is not appreciated

The authors of the happiness report also wanted to know what determines who is least happy within a country—those in the aptly named Misery category, falling in the bottom 25% on the subjective happiness measures. Examining in-depth data from three countries, the authors identified the following variables as significant: 

Marriage and age make you happier? Shocking. (Source: 2013 World Happiness Report)

Overwhelmingly, mental health is the largest determinant of misery. It dwarfs unemployment, physical health, and income—which actually decreases subjective happiness(?!), albeit only in this subsection of the population—after accounting for age, gender, and marital status. While for anyone that has suffered or been around someone who has suffered from depression this isn't shocking, it should be a major wakeup call to policymakers who have chronically underfunded mental health treatment. To give the data another persuasive spin, the authors provided another graphic to show the determinants of life satisfaction at age 34. 

Emotional health is 4-times more meaningful than intellectual performance in determining life satisfaction. (Source: 2013 World Happiness Report)

These figures are not just important from a policy perspective because of a societal compassion (or lack thereof) for personal wellbeing, but because they have very real economic costs. People that suffer from poor mental health are also likely to suffer in terms of productivity, physical health, and household decision making. Without treatment, these people will draw down other government supports program (like disability and unemployment), reduce overall economic production, and acquire other more costly medical conditions. 

Mental Health in the United States

The picture in the United States has for sometime been rather bleak. According to a report by the National Alliance on Mental Illness, between 2009 and 2011 $1.8 billion was cut from non-Medicaid state mental health spending (Medicaid accounting for ~46% and state's for ~40% of overall spending). While these cuts represent only a fraction of the $113 billion the US spends on mental health treatment, they are occurring at a time of increased demand for mental health services and account disproportionately for emergency programs—as opposed to Medicaid which primarily pays for medications (which raises the whole other issue of the efficacy of many behavioral modification drugs—but that is beyond my scope here). 

Bad things, like losing the Super Bowl, happen and mental health services can propel a return to normalcy.

According to a survey cited in The Washington Post, 45% of untreated patients list cost as the primary barrier to mental health treatment. If prohibitive costs weren't enough, social taboos and access remain roadblocks in many parts of the country. 

It is not all bad news though, The Mental Health Parity and Addiction Act of 2008 mandates that insurers appraise mental health treatment on par with physical treatments. Similarly, the Affordable Care Act, otherwise known as Obamacare, requires all insurers selling on state exchanges to offer mental health treatment as part of their product.   

Improving happiness around the world

Gaining a better understanding of what does and doesn't make us happy will go a long way to improving policymaking. Several countries have already begun to incorporate happiness into policy calculations. In the United Kingdom, Prime Minister Cameron has adopted happiness as an indicator, stating that: 

"It's time we admitted that there's more to life than money and it's time we focused not just on GDP but on GWB—general wellbeing."

While this is an important first step, like in so many things, the devil will be in the details and in its application. Whether an increased understanding of what drives human wellbeing leads to better-informed budgeting or to repugnant regimes using alternative happiness measurements as propaganda (to distract from underlying economic indicators) is yet to be seen. Either way, happiness, the pursuit of which is emblazoned in the US Declaration of Independence, is certainly a goal worthy of further research and understanding.