Eastern wisdom: what Asian development can teach us about happiness

Asia figures increasingly prominently in comparative research into happiness and wellbeing. In particular, there are three major issues relevant to happiness research which are unique to or acute in Asia. 

First, there is the question of how and whether rapid ‘Asian miracle’ income growth rates translated into happier societies. Second, there is the impact of collectivism, as opposed to individualism, on happiness and wellbeing. Finally, there is the gross national happiness measure used in Bhutan. Each provides some curious insights into the nature of happiness and how we might integrate happiness into measures of social progress.

Let’s begin with income growth. When many people think about what would make them happier, there is an instinctive turn to income. It is also a fundamental tenet of classical economics that income growth is welfare-enhancing. More money allows for more consumption and this leads to higher utility. In studies of numerous countries using the World Values Survey and other large data sets, there is strong evidence that income and life satisfaction have a consistent relationship.

Instances of rapid income growth have been relatively common in Asia over the past 50 years, notably in Japan and more recently China. This provides us with some useful data.

Curiously, during the boom years of Japan’s economic growth, average scores on self-reports of life satisfaction were almost flat. In China, the tremendous growth rates of 1990–2010 have actually seen self-reported life satisfaction scores decline.

Japan’s flat results have been put down to measurement issues. The question and scale used to survey happiness were first mistranslated and then later changed. Once we control for these issues, the expected positive relationship between income and happiness appears.

Among those who take the Chinese data at face value, the three most popular explanations for the negative relationship between life satisfaction and growth are unemployment, relative income effects (in contrast with absolute income effects) and adaptation.

Across the spectrum of wellbeing research, unemployment is consistently found to produce significant and long-lasting negative welfare effects. Being surrounded by other unemployed people weakens the effect, but it is always substantial.

Large-scale structural reforms to the Chinese economy between 1990 and 2010 resulted in substantial increases in unemployment that correlate neatly with trends in self-reports of diminished life satisfaction. This suggests that unemployment might be offsetting the gains from income growth.

A large body of research also underscores the importance of relative rather than just absolute income effects. It is not just important whether you are rich or poor in absolute terms, but whether you are rich or poor by the standards of your neighbourhood. China’s contemporary urban environments confront the relatively poor, including millions of rural migrant workers, with the reality of how poor they are, potentially resulting in unhappiness even as absolute incomes rise.

Finally, there is adaptation, which is basically just the idea that we get used to things. At the time of a promotion, for example, we are elated. But we quickly take for granted our new income, status and responsibility, and become dissatisfied once more.

These explanations are reasonable and conform fairly well to the data, but there is another more simple explanation for the counterintuitive result that income does not produce happiness: the data are bad. The trends reported above suggest that people in China had higher life satisfaction in the aftermath of the nationwide uprisings and crackdowns of 1989 than in the next two decades of rapid growth and extensive institutional liberalisation.

So how could the data be wrong? One possibility is rescaling. Life satisfaction is typically measured on scales, such as from one to 10. Respondents are interviewed annually and asked what their overall life satisfaction is ‘taking all things together’. These scores are tracked over time.

But no information is taken on the qualitative meaning of each number on the scale. It is possible that people are getting happier but are unable to communicate this because they cannot report changes in the meaning of these scales.

A study of Tongan migrants to New Zealand provides powerful evidence of rescaling. Visas for would-be migrants are allocated by lottery, allowing randomised control methods to be used to cleanly measure the causal effects of migration.

Before the visa lottery, all applicants are interviewed about their life satisfaction, reporting an average of about 8 out of 10. Two years after migration, those who moved to New Zealand and those who stayed behind are interviewed. Both groups report still being 8 out of 10 on average. This supports the status quo view that migration has little effect on life satisfaction because people rapidly adapt to their new circumstances.

But this study also asked respondents to reflect on how they felt two years before the lottery. Those who had to stay in Tonga say they were also 8 out of 10 at that time, whereas the migrants say they were 6 out of 10. This suggests that the scales used by the migrants have changed. Their current 8 may be meaningfully higher than their previous 8, but they struggle to communicate this within the strictures of the scales.

The enormous structural changes that take place during double-digit growth could be resulting in rapid rescaling. This might explain why income growth in Asia doesn’t seem to result in big changes in life satisfaction.

Another issue in measurement is conceptual confusion. It is unclear to what extent responses to life satisfaction questions are driven by the respondent’s emotional state, which is short term and highly volatile, as compared with longer-term existential considerations.

We are arguably more interested in whether we are living ‘good lives’ than whether we are merely in a good mood, so what we are measuring is quite important. Unfortunately, the mainstream literature on happiness has only recently started even to differentiate between emotional happiness and life satisfaction, let alone venture into the deep determinants of a subjectively evaluated ‘good life’.

Still, there is a growing body of research around the importance of relationships, meaning, and mastery or achievement for holistic well-being. We also have some preliminary postulates on how to achieve these things.

Foremost among these postulates is the need for self-determination. This is achieved by orienting oneself towards those activities and values for which one possesses an intrinsic motivation. On the other hand, conditions of extrinsic motivation, such as duress or extreme social pressure, limit individuals’ ability to acquire a sense of meaning or achievement through their actions, because they do not value these activities.

Engaging in intrinsically motivated activities brings about the feeling of ‘flow’, which is the emotionally pleasurable feeling of being ‘in the zone’. Flow is most common when individuals are engaged in high-challenge, high-skill tasks, like sports and hobbies. A sense of mastery and achievement naturally emerges from such undertakings.

Meaning arises even more forcefully out of the affirmation of intrinsic values, such as in political action or principled living. Here the individual is engaged in making their life and their world more closely conform to their ethical codes, a powerfully meaningful endeavour.

What remains is the satisfaction of the human need for peer-group relatedness. How can intrinsic motivations, which are grounded in individualism, satisfy such a social, even collectivist, need?

The answer might lie in the importance of collective action for affirming intrinsic values. While intrinsic values and motivations originate in the individual, their articulation and enactment is dependent on others.

Consider the case of a vegetarian. While becoming a vegetarian is a personal decision, the process of refining this value requires discussion with other vegetarians and contrarian omnivores, and internalising any arguments encountered along the way. Affirming vegetarianism in one’s life also requires a complex network of vegetarian industries and may involve social efforts to promote such a lifestyle. All of these actions depend on others even though the original motivation was personal.

So in order to fully realise one’s intrinsic motivations it is necessary to engage in collective processes within a profoundly social world. This is where individualism intersects with collectivism. The relatively more collectivist cultures of Asia provide some very important insights into these dimensions of wellbeing.

Several studies, notably a recent investigation in Bangladesh, have underlined the importance of subjective psychological processes even in collectivist cultures. Even individuals who place a strong importance on family, tribe, village and group identity nonetheless express a need for autonomy, voice and individual dignity.

Yet collectivist individuals are also likely to only be able to realise their intrinsic motivations and values within collectivist cultures. This is because their intrinsic motivations and values are oriented towards collective pursuits.

A second important finding for individualism versus collectivism comes from a comparative study of Japanese and US students. The study found that Japanese students were more inclined to accept the advice of trusted members of their social circles rather than ‘find their own path’. They were able to effect an identification with the proffered advice and rapidly internalise it until it became their own intrinsic motivation.

The US students, by contrast, placed greater emphasis on making their own decisions. The implication is that the balance between individualism and collectivism in determining intrinsic aspirations can change across cultures.

How might these nascent ideas in wellbeing research be used to more efficaciously measure social progress?

Perhaps we could use something like the gross national happiness (GNH) measure of the small Asian nation of Bhutan. GNH is comprised of a battery of metrics including income, culture, environmental quality, social capital, education and health.

The drawback of GNH is that it is substantially just GDP with extra bells and whistles. It is not grounded in a theory of subjective wellbeing and remains oriented towards objective indicators of welfare. It is therefore open to the same criticisms as any wide-ranging collection of objective measures of welfare, such as the UN’s sustainable development goals.

Two criticisms of GNH are particularly telling. First, it is expensive to collect data on a myriad of objective development indicators and these additional indicators are very closely correlated with income growth. It is thus unclear that there is much of a net benefit to these complex metrics over and above simply measuring GDP.

Second, turning a large range of metrics into a single value, as in GNH, requires the state to make value judgements about how to weight each input. This is open to political abuse. The propensity for such abuse is mitigated in Bhutan by its small population, Buddhist monoculturalism and seemingly benevolent elites. But there is little reason to believe GNH would be practicable anywhere else.

Wellbeing emerges out of psychological processes within individuals. Wellbeing research will therefore make its best contribution to metrics of social progress if we can develop a broad understanding of the subjective causes of wellbeing. This is a more effective goal than simply measuring an ever-expanding collection of objective things that are correlated with wellbeing, but do not cause it.

Psychologists are devising increasingly sophisticated survey packets for measuring emotional and psychological wellbeing on multiple metrics (not just scales) that preserve the subjectivity of experience. One promising direction might be to administer such surveys annually to a representative sample of the population.

Tracking changes on these metrics would provide some information on whether social change is helping or hindering subjective wellbeing. However, it won’t tell us much about causality, so we should be cautious about drawing policy conclusions from such wellbeing data for the time being.

Mark Fabian is a doctoral candidate in economics at the Crawford School for Public Policy, The Australian National University.

This piece was originally published in East Asia Forum Quarterly, vol. 8 no. 3, available here.