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Happiness: an overview on its definitions and metrics

Happiness Expert comment 150 x 150 Friday 20 March 2015

On International Happiness Day, Dr Valeria Andreoni from Liverpool Hope Business School asks, how do we quantify happiness? 

Happiness is a concept difficult to define and eventually harder to quantify. Starting from the Aristotelian idea of eudaimonia, that summarize happiness as "doing and leaving well", a large number of definitions have been proposed and still today a common agreement on how happiness should be described is lacking.

Economic literatures approximate happiness (or well-being) to income and GDP. Being based on the utilitarian approach for which people’s utility increase with consumption, the definition of well-being has been generally reduced to production and consumption growth. Since the 70s, however, many concerns rose in relation to the environmental and social degradation and a large number of studies have been oriented to investigate the negative or the non-increasing relationships between income and well-being. From there, a large number of attempts have been done to enlarge the happiness definition with other variables, as for example the value of leisure time, the life expectancy, the investments in human capital or the depletion of natural assets.

In recent times, the global economic crisis, and the related debate on the pros and cons of the present economic system organization, brought many governments and institutions to widen the view point on the state of societies from the traditional economic variables to a broader characterization of well-being. An increasing body of literature has been oriented to reconceptualise happiness as a combination between socio, cultural, psychological, environmental variables and aspirations and today it is widely accepted that happiness is a multidimensional concept that encompass all the aspects of human life.  

Within this context, two main approaches, namely the subjective and the objective one have been used in the literature to define and quantify happiness. The subjective approach focuses on people's own evaluations of personal life. It intends to capture people's feelings on life satisfaction and it is based on subjective evaluation of past and future life experiences. Through the description of how an individual feels that his life is going well, the subjective well-being measures are generally based on questioners and interviews oriented to obtain self-reported valuations of individual’s life.

On the contrary, the objective well-being approach is based on the assumption that observable facts can be used to approximate happiness of individuals and societies. Starting from the idea that well-being is generated by the satisfaction of desires, the objective approach uses different kinds of indicators, as the socio-economic and the environmental ones, as proxies of well-being. Within this context, a large set of aggregated indicators have been proposed. Generally based on assumptions allowing for comparisons between variables pertaining to different aspects of human life, the construction of aggregate indicators has however been largely criticized. Having to reduce and to combine different dimensions, measured on different scales, and having to take decisions on weighting and aggregation factors, the use and the construction of indicators could generate an oversimplification of well-being, making the final ranking largely influenced by perception and values of the peoples that participate into the evaluation. In addition, the largest parts of the indicators generally assume that certain issues are valuable to society but do not explain why something is valuable or not, making the process of indicator construction not transparent at all.

For these reason, recent development on well-being evaluation suggested to avoid the simplification generated by the use of aggregated indicators and to move toward an integrated description of well-being. The fuzzy sets theory approach or the multicriteria methods are example of recent developments that try to move from the compensation and the linear-simplification methods to a combined analysis of the objective and subjective well-being dimensions.

Valeria Andreoni Profile - Dr Valeria Andreoni

 Liverpool Hope Business School 

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