Last week, many of us Americans celebrated on July 4th with parades, barbeques and fireworks. It’s to commemorate the day when our founding fathers confirmed our “…certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”.
While “the pursuit of Happiness” became ingrained in our national psyche by the Declaration of Independence, is that what we really want?
If you believe in government statistics, you may find out the answer soon.
The US Department of Health and Human Services is funding a panel of psychologists and economists to develop a measurement of “subjective well-being”. It would be a Gross Domestic Happiness (GDH) measure that would be included with the regular statistics kept by the US government.
The purpose of this new happiness measure is to address the inadequacy of the Gross Domestic Product (GDP) statistics in measuring what is important to us. Economists have recognized the flaws with the traditional definition, which essentially is that we are “rational economic maximizers”. Economists now understand what parents, even those without PhDs, have known for years. Humans would be extinct if procreation decisions were made purely on economics.
It took psychologists, like Nobel Prize winner psychologist Daniel Kahneman, to enter the field of economics to help lead to this new thinking. He helped lead the combining of psychology with economics to create the field which is called behavioral economics.
A new measurement of “what is important to us” is long overdue.
What would be the most useful “subjective well-being” measurement? How we feel (Happiness) or how we are doing (Prosperity)? While happiness would offer interesting insight into dopamine levels in the brain’s prefrontal cortex, it may fall short of measuring what we really want.
Researchers have identified the most likely indicators as to whether or not we are happy:
Financial security (contentment)
Good positive attitude
Sense of accomplishment
While happiness is obviously a very desirable state, prosperity may be our most desired destination. It’s too late to replace the word “Happiness” with “Prosperity” in the Declaration of Independence, yet it is not too late to make it the “subjective well-being” measurement of the 21st century.
Prosperity is something we can measure individually and collectively as a nation as described in “What we want – Prosperity”. The Prosperity measurement balances the subjective “what we want” with an objective “what we have”. It avoids the pitfalls that psychologists have identified when measuring “Happiness”:
Expectations – You can have a high sense of accomplishment if your expectations are low. Denmark is ranked when asked “How are you feeling today?”, while the United States is ranked 19th. In Denmark, residents don’t need to worry about affording a college education, healthcare or retirement, it’s provided at no cost. It’s in exchange for transferring over half of their income to the government. It may be more challenging in this environment to achieve an ambitious dream or become a game changing entrepreneur. Though, you could expect to be happy.
Pre-disposition – Happiness studies have shown that we are easily influenced by our genetic makeup, emotional intelligence and ingrained disposition (from grumpy to sunny). Behavior geneticist David Lykken conducted the Twin studies that demonstrated our predisposition toward happiness. He discovered identical twins separated at birth had almost the same assessment of their wellbeing, even after being raised in different environments.
Episodic Variation – Psychologist Daniel Kahneman writes in “Thinking Fast and Slow” about the many studies showing how we feel influenced by the most recent experience on our minds, time of day, fatigue level or the weather outside.
Reference Points – A key element of Kahneman’s Nobel Prize winning “Prospect Theory” is that we adapt to our new situation (i.e., pay raise, winning the lottery) and automatically reset our expectations. Our happiness then becomes tied to even higher expectations.
Would you rather be “Happy” or “Prosperous”? Would you prefer the immediate and uneven gratification associated with “Happiness”? Would you prefer the incremental and sustaining gratification associated with “Prosperity”?
In 1900 when 90% of the country worked in manufacturing or farming, having ten kids was helpful on the farm or to support the household. Having children today is more about our intrinsic prosperity needs (social, purpose, competence), which psychologist now believe is as important as our extrinsic needs (wealth, income, possessions).
It is encouraging that economists recognize we are not just about money and are searching for new measures of what we want. It could be the answer we have all been waiting for, so don’t hang up when the government calls.