10 June 2012


The 70 page 'Happiness Surveys and Public Policy: What’s the Use?' (University of Pennsylvania Law School, Public Law Research Paper No. 12-36) by Matthew Adler offers -
 a comprehensive, critical overview of proposals to use happiness surveys for steering public policy. Happiness or “subjective well-being” surveys ask individuals to rate their present happiness, life-satisfaction, affective state, etc. A massive literature now engages in such surveys or correlates survey responses with individual attributes. And, increasingly, scholars argue for the policy relevance of happiness data: in particular, as a basis for calculating aggregates such as “gross national happiness,” or for calculating monetary equivalents for non-market goods based on coefficients in a happiness equation.

But is individual well-being equivalent to happiness? The happiness literature tends to blur or conflate important concepts: well-being, subjective well-being, happiness, utility, satisfaction. A preference-realization account of well-being denies the equivalence of happiness and welfare, since someone can have preferences for non-mental attributes, such as health, autonomy, goal-fulfillment, knowledge or the quality of her relationships.  
It is critical, therefore, to differentiate two potential policy roles for happiness surveys. First, the survey response may provide prima facie evidence of the respondent’s preference-utility: the extent to which her preferences are realized. Second, it may indicate her experience-utility: the quality of her mental states. The Article clarifies these two, very different, ideas. It then criticizes, in turn, the preference-utility and the experience-utility defenses of the policy relevance of happiness surveys. Enthusiasm about happiness is premature.
Adler concludes -
Enthusiasm about the policy role of SWB [subjective well being] surveys is premature. Why think that the number which someone assigns to her momentary or overall happiness, life-satisfaction, positive or negative affect, or some other aspect of her experiential state offers real help in evaluating governmental policies? Two different answers to this question need to be teased apart. One says that a higher self-rated degree of life-satisfaction shows that the respondent’s preferences are more fully realized. In short, SWB surveys evidence preference-utility. But the evidence would seem to be pretty poor. Preference and scale heterogeneity hamper the use of self-rated life satisfaction to make inferences about preference-utility. Even if all respondents share the same underlying preferences and utility function, someone’s answer to an SWB survey may well be skewed by evaluation error or miscommunication; this number may well be an inaccurate and, indeed, statistically biased indicator of the degree to which her life-circumstances realize her preferences. 
Stated-preference surveys dominate SWB surveys as evidence of preference-realization. Anomalies using the stated-preference format suggest the importance of debiasing preferences— rendering them rational and well-informed. Perhaps debiasing is fruitless. But that would show that government policy choice must (somehow!) find a normative foundation other than individuals’ preferences, and not that preferences should be inferred via the SWB technique. Skepticism about the rationality of preferences hardly advances the PR (preference-realization) defense of SWB surveys. 
The second answer to the “Why” question takes a different tack, suggesting that a happiness, affect, or life-satisfaction rating is a measure of experiential quality. Thus the EQ defense of SWB surveys. Kahneman’s “objective happiness” framework - using SWB surveys focused on momentary hedonic quality—is an important first step in developing a policy- relevant measure of experiential quality. Kahneman does not argue that well-being and good experiences are equivalent - but rather, much more plausibly, that good experiences are one important aspect of well-being. 
However, a close examination of the “objective happiness” framework suggests significant limitations. The framework purports to cardinalize momentary hedonic utilities by appealing to an “observer’s” ranking of temporally extended hedonic episodes, but presupposes - without justification - that observers have the same ranking, and that these rankings are separable from nonhedonic attributes. In empirical implementation, Kahneman has suppressed the observer and, most recently, abandoned any attempt at cardinalization - via a “U-index” that merely reports the fraction of time that individuals spend in an affectively unpleasant state. This is a crude measure of hedonic quality (let alone the non-hedonic aspects of experiential life, such as memory or a sense of meaning), because it does not tell us about the intensity of individuals’ affective states. 
It remains unclear whether SWB surveys - asking for a numerical rating of experiences - should be the central tool for incorporating information about experiential quality into policy analysis. At least in principle, a different approach, more closely continuous with traditional cost-benefit analysis, is available: namely, to use revealed or stated-preference evidence to infer individuals’ preferences over “hybrid bundles,” comprised of both experiential and non-experiential attributes. SWB surveys are at most an ancillary component of this approach; the central focus is inferring preference-utility, with experiential attributes merely one entry in the utility function. 
Much more work remains to elaborate both this approach and frameworks (such as “objective happiness”) that revolve around SWB surveys. In undertaking this effort, scholars should exercise caution, taking care not to muddy their concepts - taking care to understand that well-being need not reduce to good experiences; that individuals can have intrinsic preferences for aspects of their lives other than their mental states; and that someone’s perceived degree of happiness or life-satisfaction can diverge from her true preference-utility.