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Wealth and well-being: What makes you happy?

17.01.2012 07:33 EST

Andrea Ong (The Straits Times), The Asia News Network, Singapore | Mon, 12/12/2011 9:55 AM
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Last year, J.H Lim, 23, started her first job as a tax associate at an accounting firm.

She quit after seven months, giving up prospects of good pay and career progression to become a physical education teacher at a secondary school.

"I didn't find value or meaning in what I was doing," she says.

She is now much happier. "I like sports, I like interacting with the students and I see meaning in encouraging them to enjoy sports and lead a healthy lifestyle at a young age," says the fitness buff, who ran the Standard Chartered marathon on Sunday.

Several developed countries are going through a soul-search akin to Lim's. They are asking their citizens: Are you happy? What makes you happy?

And they are coming up with indices to measure and track people's happiness levels.

Earlier this week, Japan unveiled a set of draft indicators. The 132 indices put numbers to areas like women's satisfaction with men's participation in childcare, the number of young people who live in isolation, and people's sense of whether they are living as happily as others in the community, reported the Asahi Shimbun newspaper.

By doing so, Japan has become the latest to join the ranks of countries such as Australia, Britain and France, which have acknowledged the need to look beyond pure economic indicators like gross domestic product in assessing their people's well-being.

Two months ago, the topic of happiness came up in Singapore's Parliament when Workers' Party MP Sylvia Lim raised the example of Bhutan, which has a Gross National Happiness index.

She pointed out that Singapore was one of 66 nations to co-sponsor a United Nations resolution initiated by Bhutan in July entitled Happiness: Towards A Holistic Approach To Development.

Lim asked how the Government intended to introduce indicators of happiness, and how these would guide its policies over the next five years.

This sparked a lively debate among MPs about Singaporeans' well-being and the importance of GDP growth.

It also raised two big questions: What is the link between GDP and happiness? Is there a need for Singapore to start measuring its people's happiness?

The happiness paradox

There is a growing body of research which suggests that growth in GDP, which adds up all that is produced and consumed in an economy, does not lead to greater happiness.

The paradox was highlighted in 1974 by American economist Richard Easterlin, who found that happiness levels of societies tend to stagnate after a point, even as national wealth continues to rise.

He reviewed his findings last year and concluded that the paradox is usually seen in countries which are developed or rapidly developing. For instance, income per capita has doubled over 20 years in Chile, China and South Korea, but happiness in these places has not kept pace.

The "Easterlin paradox" appears to be at work in Singapore too, according to research by two National University of Singapore (NUS) business school dons.

Based on three surveys on Singaporeans' well-being and quality of life, conducted over the past seven years, Tambyah Siok Kuan and Associate Professor Tan Soo Jiuan found that happiness levels did not vary much even though GDP grew by an average of seven per cent each year.

"Despite the quick rebound from the global financial crisis of 2008 to 2009 and the blistering growth rate of 14.5 per cent in 2010, Singaporeans are not necessarily happier," Tambyah and Tan tell Insight.

In fact, the happiness level this year fell by 3.5 points from 72.5 per cent in 2006.

One reason behind the Easterlin paradox is that GDP figures do not capture the stresses and strains in society caused by income inequality and other side-effects of growth.

Tambyah and Tan note that Singapore's "euphoric economic growth" was accompanied by growing pains, such as a higher cost of living and the strain caused by a foreign worker influx on housing, transport and social ties.

"Singapore citizens perceived that the spoils of success were not adequately shared with them as they felt slighted in the intense competition for jobs, housing and other opportunities," they add.

A book containing their analyses and findings from this year's survey of 1,500 Singaporeans will be published next year.

Other areas not reflected in GDP measures include work-life balance and satisfaction with life.

Just ask financial analyst Brian Tan, 26. He earns over S$110,000 (US$85,000) a year--much more than many others his age.

But there is a price. A typical work day for him starts at 8am and ends late at night, with no time for dinner, because Tan has to handle overseas clients. Even on holiday, he is constantly checking e-mail messages on his BlackBerry.

While he enjoys the intellectual challenge and excitement of his job, the lack of a work-life balance takes its toll.

"Sometimes it's very hard to find reasons to be happy when I'm in the office at 2am and I know I have to come back in at 8 am," he says. The bachelor adds wryly that his relationship status on Facebook should say, simply: "I'm very busy."

Tan's high income gives him greater purchasing power, but that does not translate into happiness. "I've felt that I'm spending money just to justify why I'm working so hard," he says.

"I know I can subsist on much less and still be very happy."

Economist Nattavudh Powdthavee of Nanyang Technological University (NTU) has another explanation for the Easterlin paradox.

"Human beings care a lot about status. Many people would rather be the second richest person in a poor area, than to live in a rich area where many are better off than them," says Powdthavee.

Hence, as incomes rise across the board in advanced countries like Singapore, it becomes increasingly harder to improve one's status in relation to others.

Powdthavee offers an example: "If you tell someone who earns a lot of money to slow down and work less because it's bad for his health, chances are he won't stop unless someone else does. He won't want to fall behind his peers with the same education and income level."

He adds: "Money only buys you happiness if it buys you rank and status, but there's not so much rank to go around."

Measuring happiness

Tambyah believes "the time is ripe" for Singapore to introduce national indicators of happiness and quality of life.

Bhutan has tracked its Gross National Happiness since 1972, when King Jigme Singye Wangchuck coined the term. The index has 33 indicators, including equality, literacy, pollution, corruption and time spent with family.

Happiness indices have gained ground since 2008, when French Prime Minister Nicolas Sarkozy tasked a group of economists and social scientists with studying how economic and social progress can be measured in modern economies.

Led by Nobel Prize-winning economists Joseph Stiglitz and Amartya Sen, the group's 2009 report called for measures of well-being and sustainability on top of traditional economic indicators.

Sarkozy declared that France would include happiness and well-being in its measures of progress. Other countries have since followed uit, including Britain, which released the results of its first nation-wide survey on well-being last week.

Earlier this year, the Organisation for Economic Cooperation and Development (OECD) released an index called Your Better Life. It applies 11 indicators of well-being to the OECD's 34 member countries. These are a mix of subjective and objective factors like health, work-life balance, housing, income and social capital.

In October, OECD secretary-general Angel Gurria said such measures are important, as promoting growth "as usual" is no longer an option in the current climate of slowing growth and a looming financial meltdown.

Introducing a similar index in Singapore would come with its own set of challenges, as well-being is subjective.

Still, researchers say Singapore can take a leaf from the 11 OECD indicators and build on existing research.

Psychologist Christie Scollon of the Singapore Management University suggests the Government may be interested in specific areas, such as work satisfaction, finances, leisure time, family and commuting.

"These seem to be hot topics in public debate these days," she notes. Research also shows that these factors might play a "a particularly important role in Singaporean conceptions of the good life".

A snapshot of Singapore

ONE old bugbear is why Singapore tends to do badly in global surveys on happiness, such as the Gallup World Poll on life satisfaction and the Happy Planet Index.

Cultural differences could play a part, says Professor Scollon. Asian countries usually score lower than North America and Western Europe in many world surveys, she notes.

In a study she carried out which compared Singaporeans and Americans, she found that Singaporeans emphasise wealth more in their conception of the good life than Americans. "Too much emphasis on wealth has been shown to be detrimental to well-being," she says.

Different cultures also have different norms about what is considered good and desirable. "Americans strongly value feeling good and being happy. In Asian societies, pleasant emotions are also desirable but less so," adds Scollon.

But Powdthavee of NTU cautions that international happiness rankings should be taken in context.

The main purpose of happiness indicators is to track how people within a country fare across time and demographic groups, he argues. The information should also be made publicly available for academics and policymakers to study.

Within Singapore, Tambyah would like to see greater collaboration among academics studying happiness.

"There are many research scholars interested in the study of happiness. If we could pool all our resources, along with funding from the government, we might be able to come up with a sustained programme of research that we can track over time," she says.

But studies like those she and Tan have conducted already serve to provide a snapshot of Singaporeans' happiness. And with a happiness level which has hovered around 70 per cent for the last seven years, it seems Singaporeans may not be that unhappy after all.

Some factors like satisfaction with family life and national pride also keep cropping up when Singaporeans are asked what makes them happy.

For instance, a survey by Grey ...
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