Can there be ‘common currency’ to measure wellbeing?

To introduce the Centre’s new Measuring Wellbeing series, our head of evidence and analysis explores the approach set out in our first discussion paper by Prof. Richard Layard on measuring wellbeing and cost effectiveness using subjective wellbeing.

If we want to increase society’s wellbeing, should we build new houses or encourage community choirs? How can we compare the wellbeing benefits of a new crime prevention initiative with an antenatal care programme?

Professor Richard Layard, from the Centre for Economic Performance at the LSE, presents an eloquent, albeit contested, answer. He proposes that we could decide between options by comparing their impact on life satisfaction (on a scale of 0-10), as measured by the Office of National Statistics. Programmes should evaluate their effectiveness, using good quality evaluations, by assessing their impact on life satisfaction. Or, if we already know the impact of a programme on a measure such as the Warwick-Edinburgh Mental Well-being Scale, or job satisfaction, we could convert these to life satisfaction. We may not have precise models to be able to use as an exact exchange rate,  but we can get an indication by by looking at correlation between the measures when they have both been asked in another survey*.

Ultimately, Professor Layard sets out that policies should be converted to life satisfaction. They can then be compared based on their potential increase to life satisfaction for a given amount of money. This would be weighted for inequality so that more importance is given to raising life satisfaction when it is low.

It is a neat solution to a difficult problem. In Government, we make conversions and assumptions all the time: assessing the equivalent monetary benefit of a safe neighbourhood by looking at differences in house prices; asking people how they would compare the risk of death to the risk of breaking their arm; establishing how important road safety is compared to faster speed limits. The results may not be perfect, but they allow us to make a start at comparing options. It is better to be roughly right than completely wrong and not even attempting to make these comparisons.

Professor Layard argues that, rather than trying to convert through monetary values, we should focus directly on what is most important – asking people about their own assessment of their lives.

Overall, how satisfied are you with your life nowadays?

There are, of course, difficulties in choosing life satisfaction as our unit of measurement. Academics have challenged whether people interpret the questions in the same way  and whether we can compare across people. Studies question how responses to satisfaction compare to actual lived experiences. We know that people adapt to their circumstances: individuals are initially happier when conditions improve to give them, for example, less crowded housing and improved physical mobility. But after a while we adapt, and as we become used to these better conditions our expectations increase. Since life satisfaction may be a judgement against the individual’s expectation, it may be difficult to compare even with the same individual over time.

There are also challenges with putting this into practice. While life satisfaction might be associated with all other measures of subjective wellbeing, that does not mean it captures all the variation in other measures. A programme may lead to significant changes in physical or mental health, or satisfaction at work, each of which are important in their own right, but they may not register on a scale of life satisfaction.**

So, what should we do?

Life satisfaction is an important and meaningful indicator of wellbeing. It correlates with other measures of wellbeing, including neurological assessments. However as a Centre, we want to reflect the multi-dimensional nature of wellbeing. We do want to reach a point where we can consistently compare the impacts of different choices with common measures, so we can begin to understand how important certain actions are compared to others. At the same time we want to continue to support, collect and record other outcome measures and understand the value that domain-specific measures and other approaches can bring.***

This discussion series will bring together leading thinkers and practitioners, with their views of how we could define and measure wellbeing and use this in decision-making in different sectors across UK. We want to initiate public discussion and debate about what next – across thinking and practice – to come to a shared, open decision about the methodologies and measurements we need to improve the wellbeing and reduce wellbeing inequalities – of individuals and communities across the UK.

These discussion papers are mainly aimed at analysts, wanting to understand the latest thinking and theoretical underpinnings, however the accompanying blog and ‘Practical Guides’ are aimed at all audiences who may be considering how to put wellbeing into practice.

* These scales may be showing something slightly different to life satisfaction, however when both sets of questions are asked in the same survey, it is possible to see how similar they are (how much a change in e.g. WEMWEBS maps onto a change in life satisfaction).  We can assume that this link between the two scales holds in other cases, where only e.g. WEMWEBS has been asked.

** For example, life satisfaction has not been found to be very sensitive to physical health conditions relative to other health-related measures.

*** Some may also support the case for an improvement in existing techniques, so that approaches such as contingent valuation can be more meaningful.

References

Davidson, R.J. (1992). ‘Emotion and affective style: hemispheric substrates’, Psychological Science, 3(1), pp. 39-43.

Dolan, P., Kudrna, L.,  and Stone, A. (2016). ‘The measure matters: an investigation of evaluative and experience-based measures of wellbeing in time use data’ Social Indicators Research. ISSN 0303-8300

Haybron, D.M. (2007). ‘Well-being and Virtue’, Journal of Ethics & Social Philosophy, 2 (2)

Mukuria, C., Peasgood, T., Rowen, D. and Brazier, J. (2016). ‘An empirical comparison of well-being measures used in UK’. Research Report RR0048: University of Sheffield and the University of York.

Ponocny, I., Weismayer, C., Stross, B. et al.  (2016) ‘Are Most People Happy? Exploring the Meaning of Subjective Well-Being Ratings’ Journal of Happiness Studies 17: 2635 doi:10.1007/s10902-015-9710-0

Ralph, K., Palmer, K. Olney, J. (2011). ‘Subjective Well-being: a qualitative investigation of subjective well-being questions’ (Working paper for the Technical Advisory Group on 29 March 2012)