Deaton's Findings - Essay Example

DEATON’S FINDINGS Explain Deatons findings. It is harder for rich countries to increase life satisfaction by raising GDP per capita? Life satisfaction is defined as one’s perception of how his/her life is and their feelings about where it’s going in the future. It’s often used as a measure of wellbeing and accessed by various factors such as mood, self-perceived ability to cope with daily life, satisfied relation with others and achieved goals in life. It’s generally having a self-favorable attitude to one’s life as a whole rather than current feelings and situations (Blanch, David & Andrew 2004, p. 88). Life satisfaction on many occasions has been viewed in relation to economic status, education level, years and number of experiences as well as the surrounding environment of people. GDP per capita is a measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country. A rise in per capita GDP signals growth in the economy and tends to translate as an increase in productivity. Various survey findings where people report about their life satisfaction are usually known to be straightforward and simple collection of individual or national well-being that include other various measures of well-being including, status of the economy, health status, family environment and even both human and political rights within the given region. According to Layard (2005, p.56) this measures can be indeed used to come up with a conclusive findings on evaluating policy and progress. This view is however in great contrast with Sen (1999, p. 77) who claims that people’s well-being is based on various functions and capabilities each of which is objectively measured and cannot be aggregated as an individual measure, this view is widely accepted. For economist known to assume that higher incomes is an indication of individual’s satisfaction, it’s often argued that incomes role is relatively unimportant and just a transitory when it’s compared with unemployment, health and family circumstances. This view has caused various debates as to which of life’s circumstances highly contribute to life satisfaction and which of these factors are permanent and those that have transitory effect. Easterlin (2003, p. 67) in one of his surveys which included comparing results from a given country over a period of time concluded that the average national happiness is not directly proportion to increase in per capita income. Other studies show that there is a mere effect of income on life satisfaction in comparison to other life factors such as employment and marital status. Helliwell (2003. P. 78); Blanchflower and Oswald (2004, p.89) suggested that increased income may have no effect on life happiness and that the believed relationship between life satisfaction and income emerges from an illusion that prompts people to compare their income with set standards by either their previous incomes or other peoples incomes. Due to these findings, it’s therefore possible to ascertain that increase in income will cause no increase in life satisfaction. In other studies, income was seen to be a boost to life satisfaction but not the causative factor (Blanchflower, David & Andrew 2004, p. 88). Based on the evidence found it’s easy to concur that there is no relation between levels of life satisfaction across countries with different levels of income. Veenhoven (1991, p. 34), argued that more income can be a contributive factor to life’s happiness if basic needs are met; to a point that poverty is eliminated, hunger eradicated, preventable diseases curbed, or else increased income won’t matter for happiness. Though a contrary view exists that states that possibility for intellectual and cultural development can be fully explored only after basic needs have been meet. It’s been found out that some low-income countries are happier than high-income countries which continue growing richer but their life satisfaction is still low (Blanch, David & Andrew 2004, p. 90). The findings on life satisfaction in countries globally are usually carried out by the World Values Survey, which include a network of academics around the globe that coordinate their efforts. Numerous interviews in over 80 countries have been carried out representing over 85% of the world’s population (Layard 2005, p. 65). The surveys have been conducted in high-income countries, low-income countries as well as some countries from Eastern Europe. The surveys have been done in four categories: 1981, 1990-1991, 1995-1996 and 1999-2001.Their collected data, findings and reports are usually found in various sources (Layard 2005, p. 67). Various studies on World Values Survey indicate that high-income countries are happier when compared to their counterparts, but it also states that there is no relationship between national income and national happiness. Layard (2005, p. 32) writes that for “the Western industrial countries, the richer ones are no happier than the poorer.” Gallup Organization in 2006 conducted a world survey in each of the 132 countries with exception of Angola, Cuba and Myanmar where the samples used were urban and represented people aged 15 years and older. They issued a questionnaire which included several factors of well-being. Due to the use of the same questionnaire it’s possible to make conclusive cross-country comparisons (Layard 2005, p 78). The survey was the first to provide national samples for so many countries especially for poor countries. People on various occasions tend to think that Life satisfaction and happiness are used to mean the same thing. Questions used to find out life satisfaction ask respondents to make a general evaluation of their lives. The answers given are usually interpreted as factors for measuring happiness, but happiness can sometimes be thought of as relating to affect, and can therefore be measured by use of experiential questions, such as, basing on the frequency of smiling, or the feeling of happiness or absence of depression, usually during the day before the interview. The World Poll used such questions and experiential happiness measures and basing on their findings they don’t usually sum up for the life satisfaction question (Sen 2002, p. 79). The Gallup World poll findings came up with interesting findings. For example, in the high-income countries they had greater life satisfaction compared to low-income countries, and when income was measured in logarithmic terms, no evidence was presented that cross-country effects of higher income decreased as the countries increased their income (Sen 2002, p. 99). When conditioned on the national per capita income level, the results of economy growth affected life satisfaction negatively, contrary to what was predicted. Objective measures of health can’t be measured by use of life satisfaction or health satisfaction but factors such as life expectancy and the prevalence of HIV infection strongly have effect on health status but neither can be used as reliable indicator on the well-being of populations (Sen 2002, p. 69). The findings of average life satisfaction globally based on Gallup World poll data is similar to the income map of the world: people in North America, Western Europe, Japan, Australia and Saudi Arabia are both rich and well satisfied with their lives while Sub-Saharan Africa plus Cambodia and Haiti came up as the really unsatisfied places on planet. Though some well-off countries in terms of income such as Georgia and Armenia, were found in the bottom 20 section while some relatively poor places as Venezuela and Coasta Rica, appeared in the top 20 in terms of life satisfaction (Sen 2002, p. 89). When comparing the life satisfaction levels in the World Poll and World Value Survey their findings are relatively similar but there are significant differences between the two surveys. In both surveys, there was evidence to ascertain that there was a correlation in life satisfaction and GDP per head, and the relationship was found to be steeper among the poor countries when compared to the rich countries (Sen 2002, p. 145). However, while in the World Poll data the findings show a smoother relationship between life satisfaction and income, with a gradual slope as we move towards richer countries, the World Value Surveys present a much steeper slope in poor countries and very minimal increase in life satisfaction above about $10,000 per capita. These differences are attributed to the fact that World Values Surveys included very few of the poorest countries in the world, which were included in the World poll survey also due to the fact that a good portion of poorest countries in the World Values Survey are in eastern Europe or were once part of the Soviet Union which contain people who are highly unsatisfied in their lives (Sen 2002, p. 92). And, because these regions are not among the global poorest base to the standard GDP measures, they constitute countries that lies below the correlation of life satisfaction and income that exists in the World Poll (Sen 2002, p. 103). Another reason for the differences in the data is that the World Values Survey mostly in its earlier round did its sampling mostly in urban areas with literate people and in countries such as India, China, Ghana and Nigeria, who were selectively identified to be more comparable with people in richer countries. Based on the general relationship between life satisfaction and income, the people used are almost certainly living satisfied lives than people in the grassroots level of their countries, and they form another group of relatively poor countries, but with a higher life satisfaction (Veenhoven 1991, p.4). Therefore, poor countries in the World Values Survey include a mixture of people leading unusually dissatisfied lives from the Eastern Europe region and former Soviet Union, and the unusually satisfied people from a small cluster of poorer countries. Conclusively we can say that there is nothing in the data collected by World Values Survey that leaves any shadow of doubt neither on the World Poll data, nor on the close-to-linear global relationship between average life satisfaction and GDP per head. A similar point of view is also expressed by Leigh and Wolfers (2006, p. 89). Bibliography Blanch flower, David G., and Andrew Oswald.2004. “Well-Being over Time in Britain and the USA.”Journal of Public Economics, 88(7– 8): 1359 –86. Easterlin, Richard A.1974. “Does Economic Growth Improve the Human Lot? Some Empirical Evidence.” In Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitzed. Paul A. David and Melvin W. Reder, 89 –125. New York: Academic Press (Easterlin 1974, p. 90) Helliwell, John F.2003. “How’s Life? Combining Individual and National Variables to Explain Subjective Well-Being.”Economic Modeling, 20(2):331– 60. Layard, Richard.2005.Happiness: Lessons from a New Science. New York: Penguin Press. Leigh, Andrew, and Justin Wolfers.2006.“Happiness and the Human Development Index: Australia is Not a Paradox.” The Australian Economic Review, 39(2): 176 – 84 Veenhoven Ruut.1991. “Is Happiness Relative?” Social Indicators Research, 24(1), 1–34 Sen, Amartya K.2002. “Health: Perception versus Observation. ”British Medical Journal, 324(7342): 860 –1 Read More