13

Happiness and well-being

Wai Kee Yuen, Mark Greene and Wan Ling Chu

13.1 The meaning of happiness in Eastern and Western

economies

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For just over 30 years, a strong interest in the topic of happiness has been shown

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by experts from the domains of psychology, economics and policymaking.

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Historically and philosophically, the topic of happiness has roots that go back
thousands of years. For the purpose of contemporary discussion, however, it is
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useful to note that the term ‘happiness’ is often used interchangeably with ‘sub-
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jective well-being’.
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Unifying the varied domains mentioned above are the remarkable statistics that
compare various societies’ economic indicators with commensurate measures of
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societal well-being. Just how subjective well-being correlates to economic health

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has generated a multitude of academic and government initiatives to better quan-

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tify the elusive term of happiness. In fact, when speaking of the productivity of
an economy, it is now expected that a detailed treatment of the quality of life,
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subjective well-being and life satisfaction of its citizens accompany any such
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discussion.
The number of nation-wide subjective well-being programmes – including those
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by Great Britain and China, as well as other global indices of happiness – has been
increasing dramatically these past five years. All are mandated to collect and sort the
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kind of data that makes sense of how ‘happy’ people are. Further analysis is then
conducted to examine possible correlations to economic and other social indicators.
Some initiatives date back to the 1970s such as the Gross National Happiness, a
concept elaborated by the King of Bhutan, who introduced the idea of taking happi-
ness as seriously as the better known Gross Domestic Product (GDP) indicator to
measure a country’s developmental health and progress.
Recent subjective well-being research endeavours include the Happy Planet
Index (HPI) by the New Economics Foundation which was founded in 1986 as
‘an independent think-and-do tank that inspires and demonstrates real economic
well-being’ (New Economics Foundation, 2012). The Organisation for Economic
Co-operation and Development (OECD) launched the Global Project on
Measuring the Progress of Societies in 2008 and more recently the Better Life
Index (2012).

13_Yu et al_Ch-13.indd 238 11/15/2013 3:47:40 PM

 Happiness and well-being 239
Ruut Veenhoven at Erasmus University in Rotterdam has compiled a compre-
hensive online database which began in 1980. As of 2011, ‘the database covers
some 18,000 scientific findings on happiness, of which about 5,000 are distribu-
tional findings (on how happy people are) and another 13,000 correlational find-
ings (on what goes with more and less happiness)’ (World Database of Happiness,
2012). In 1990, the United Nations Development Programme (UNDP) adopted
the Human Development Index (HDI) following the premise that ‘People are the
real wealth of a nation’. The HDI measures economic and human progress such
as levels of health, education and per-capita income. The UNDP ‘replaced Gross
National Product with the HDI in 1990’ (Hu, 2011). More recently, the Office for
National Statistics, London, United Kingdom, has launched an initiative aimed at
‘Measuring subjective well-being for public policy’ based on the eponymous
paper by Dolan et al. (2011). Calls are being made among Chinese economists
and policy shapers to measure happiness in China (Hu, 2011).

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13.1.1 The definition of happiness in the West

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To better understand the contemporary discussion of what makes a life ‘happy’
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in the West, it is necessary to go as far back as Ancient Greece. Democritus (c.
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460–70 BCE), is largely believed to be the first western philosopher ‘to inquire
into the nature of happiness’. He suggested ‘that a happy life is not exclusively
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the product of a favourable fate or of external circumstances but rather of a

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man’s cast of mind’ (Tatarkiewicz, 1976, as cited in Kesebir and Diener, 2008).
Although Socrates and Plato did address the definition of happiness, their
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conceptualization of it was quite objective and absolute, as if happiness

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existed alongside Plato’s other ideal forms in another dimension of reality.

Plato’s student, Aristotle, however, was much more direct in his treatment of
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happiness and suggested that ‘happiness was not out of one’s hands but is
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realizable for anyone willing to lead a life in accordance with the most valued
virtues’ (Aristotle, 1992, cited in Kesebir and Diener, 2008). The roots of west-
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ern approaches to happiness relate to what is a good and virtuous life. These
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questions were part of philosophical discourse in Ancient Greece until the fall
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of the Roman Empire.

By the time medieval Christian theologians picked up the discussion, param-
eters of a ‘good’ or ‘happy’ life were defined by the absence of sin. A virtuous
life, then, was one that eschewed temptations to earthly pleasures and looked
forward to a life in heaven. It was not until the Enlightenment that ‘happiness’ per
se re-entered political and civic discourse. The most famous example would be
the preamble to the United States Declaration of Independence which guarantees
‘the pursuit of happiness’ as a basic right alongside rights of ‘life and liberty’
(Greene, 2009).
With the advent of the industrial revolution, and, later in the nineteenth century,
improvements in health care and the implementation of a large railway infrastructure,
especially in Europe, a large class emerged with a modicum of disposable income and
actual leisure time. With further improvement in state-guaranteed primary education

13_Yu et al_Ch-13.indd 239 11/15/2013 3:47:40 PM

 240  Wai Kee Yuen, Mark Greene and Wan Ling Chu
in Europe and the United States in the early twentieth century, people began to ask
questions about their own quality of life and how it could be improved.

13.1.2 The definition of happiness in the East

Approximately 60 per cent of the world’s population lives in Asia. With a com-
bined population 2.5 billion, China and India alone account for 36 per cent of the
world’s population and 60 per cent of Asia’s population. To understand and dis-
cuss happiness in the East requires a brief cultural and historical examination of
how these two civilizations have dealt with the topic of happiness to date.

13.1.3 Happiness from the Chinese perspective

To better understand how happiness as a concept and, perhaps, a goal in life

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affects modern-day Chinese, it is necessary to briefly recap how the topic is dealt

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with in the Three Teachings of China: Confucianism, Buddhism and Taoism.
From a Confucian perspective, the happiness of the individual is not of the utmost

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importance. Instead, collective harmony is prioritized over subjective well-being

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within the framework of society as a whole. Conceived approximately 2,500
years ago, the ‘five relationships’ provide a good example of the concept of inter-
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dependence of relationships at the source of societal harmony. The ‘five relation-
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ships’ include (1) ruler and subject; (2) father and son; (3) elder brother and
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younger brother; (4) husband and wife; and (5) friend and friend. Each member
of these model dyads is expected to treat the other with li, or propriety. This brief
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description of one of the tenets of Confucianism shows how important individual

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roles are for creating the context for the realization of the greater good and not
necessarily the other way around. It is hypothesized that overall obedience to
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such societal norms would result in at least a modicum of subjective well-being

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for the individual who is integrated in such a society.

One of the Buddha’s principal teachings is that life entails a certain amount of
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unavoidable suffering. Buddhism, like the source religion out of which it sprang,
Hinduism, posits a large degree of insubstantiality to the world which, paradoxi-
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cally, appears to be quite substantial. Thus, for Buddhism, desire for objects and
permanence are destined to cause even more suffering for the individual. The
solution provided by the Buddha is the Eightfold Path comprising, respectively,
the domains of Wisdom, Ethical Conduct and Mental Development. The eight
elements are: (1) Right View; (2) Right Intention;( 3) Right Speech; (4) Right
Action; (5) Right Livelihood; (6). Right Effort; (7) Right Mindfulness; and (8) Right
Concentration. In summary, most Buddhist sects teach that happiness and joy are
part of life, but like all other aspects of life, they should not be coveted or made
the object of our pursuit because we will be disappointed once the moment passes
if we have been trying to freeze an experience of happiness in time.
The third of the teachings to have moulded and affected Chinese philosophy and
discourse over the past 2,500 year is Taoism. Philosophical Taoism stands in stark
contrast to Confucianism by stating, essentially, that humans would be better off not

13_Yu et al_Ch-13.indd 240 11/15/2013 3:47:40 PM

 Happiness and well-being 241
trying to achieve too many things, such as rank and title. Instead, each person would
further their own well-being by modelling everyday existence on the dynamics observ-
able in nature (Box 13.1). For Taoists, the universe itself was born from the Tao in its
manifestation of opposite and complementary forces of yin and yang. These two forces
are made manifest in the observable world by the intermingling and differentiation of
opposites such as female and male, night and day, cold and hot, and so on. To attune
oneself to these energies, both within the body and in the external world, constitutes
the closest a Taoist would commit to referring to happiness or subjective well-being.

Box 13.1  The Vinegar Tasters

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Figure 13.1  The Vinegar Tasters (ca. 1880). (Retrieved from: http://en.wikipedia.
org/wiki/File:Vinegar_tasters.jpg)

In this example of a popular theme in traditional Chinese painting (Figure 13.1),

we see three old men standing around a vat of vinegar. They have each plunged
their thumb into the vat and tasted its contents. On the left is the representation of
Confucius. His expression is sour and reflects (from a Taoist point of view) the mes-
sage of his teachings: humanity needs rules to follow if we are ever to recapture the
golden age. The central figure is the Buddha. For him, life is bitter and symbolizes
the aspect of his teaching that posits life as being suffused with suffering. The figure
on the right is Lao Tse, the author of the Tao Te Jing, Taoism’s foundation text. He
bears a large smile on his face for, much like his teaching, all is as it should be in
this world and humanity’s need for rules and pursuit of happiness constitute folly.

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 242  Wai Kee Yuen, Mark Greene and Wan Ling Chu
13.1.4 India: A Vedic definition of happiness
A singularly powerful tenet of Hinduism is the concept of maya or illusion. It
represents the challenge for all individuals to recognize that what we perceive to
be life is not necessarily accurate. Another main tenet of Hinduism is the belief
in reincarnation. It is this endless cycle of birth–death–rebirth (samsara) that
prevents most people from attaining enlightenment and the realization of non-
duality. Those who do good deeds and create positive karma for themselves,
stand a chance of being released from samsara and rejoining the godhead out of
which all creation, including the universe, spring. One could theorize that being
aware of the illusory nature of reality – dependent as it is on our senses – can
provide individuals with impetus to attain enlightenment. Emotions such as joy
and happiness, then, are to be considered equally illusory and transient, consti-
tuting merely other components of maya.
When combined, the three teachings of China and the spiritual doctrine of most

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of India offer a variety of contexts to conceptualize happiness and subjective well-

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being. Although contrasting in approach, each system of thought has valuable les-

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sons to teach the student of culture and history about the cultural legacy affecting
how modern day Asia conceives of and approaches definitions of happiness.
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13.1.5 The convergence of psychology, sociology and economics: Subjective
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well-being studies
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Subjective well-being studies fall squarely at the intersection of two separate yet
overlapping disciplines: psychology and sociology. At one pole of psychology’s
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sphere of influence is the micro as represented by neuroscience and the study of

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individual cellular interactions within the brain. Progressing toward the macro,
psychology concerns itself eventually with the behaviour of the individual within
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groups. This field is known as social psychology and is where psychology and
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sociology most clearly overlap. From the perspective of economics, happiness

concerns policies that can make people happy.
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The pioneer of political economy, Adam Smith, in his 1759 book Theory of Moral
Sentiment, wrote: ‘All constitutions of government, however, are valued only in pro-
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portion as they tend to promote the happiness of those who live under them. This is
their sole use and end’ (IV.I.11). Friedrich A. Hayek (1944:60) stated that

the welfare and happiness of millions cannot be measured on a single scale

of less or more. The welfare of a people, like the happiness of a man, depends
on a great many things that can be provided in an infinite variety of combina-
tions. It cannot be adequately expressed as a single end, but only as a hierar-
chy of ends, a comprehensive scale of values in which every need of every
person is given its place.

Continuing toward the macro along this spectrum, sociology concerns itself with
larger structures such as modes of governing a population, freedom of expression,
and the historical basis for a given society’s functioning (see Figure 13.2).

13_Yu et al_Ch-13.indd 242 11/15/2013 3:47:42 PM

 Happiness and well-being 243

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Figure 13.2  The convergence of psychology, sociology and economics.
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13.1.6 Modern applications from positive psychology

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Recent developments in psychology begin with the premise that not enough
attention has been placed on researching what makes people thrive, flourish
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and grow into fully engaged and realized individuals. This has changed with
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the coming of positive psychology. While millions continue to benefit from

research on the causes and treatment of mental disorders, billions of human
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beings will eventually benefit from exploring ways to help normal people
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lead vigorous and meaningful lives. The method chosen to pursue this new
branch of psychological inquiry posits the existence of universal strengths
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and shows the individual how to apply them as Values in Action (VIA)
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(Authentic happiness, 2012). The result is a marriage among social sciences,

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the age-old pursuit of mind transformation for the betterment of the indi-
vidual and society, and modern economic theory.

13.1.7 The scientific study of happiness and self-realization

Another term for the recent academic field of positive psychology would be
the scientific study of happiness and self-realization. Coined in 1998 by psy-
chologist Martin Seligman, positive psychology is charged with investigating
what is already right with people, and sharing those findings for everyone’s
benefit. In other words, this psychology focuses on the great majority of the
human population: those individuals not suffering from a psychological dis-
order who nevertheless want to better the quality of their lives (Compton and
Hoffman, 2013:2).

13_Yu et al_Ch-13.indd 243 11/15/2013 3:47:44 PM

 244  Wai Kee Yuen, Mark Greene and Wan Ling Chu
13.1.8 A miserable history
From its beginnings, psychology has been associated with misery and madness.
Throughout the twentieth century in North America and Europe, terms such as
‘mental illness’, ‘psychotherapy’ and ‘depression’ were only whispered, if men-
tioned at all, in open discussion. That something psychological was ‘wrong’ with
a family member, or with oneself, often presented a burden to be borne with great
difficulty. This fearful attitude toward mental illness, however, began to change
in the 1970s, at least in the United States. With public education, tolerance and
compassion for sufferers of psychological disorders evolved as a norm, especially
when it became clear that many successful methods of treatment are available.
The growing acknowledgement that mental illnesses can be treated and need
not be a source of shame and stigmatization has been catching on in Asia, as well,
although popular acceptance of this fact still lags behind North America and
Europe by what is estimated to be a gap of 20–30 years. Given the fact that tech-

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nological advances are accelerating, such a gap in time when measured in terms

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of the progress of the last century, will actually shrink by a factor of two to four,

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leaving Asia in a better position to accept and integrate indigenous styles and
values in the application of psychology for the betterment of the individual and
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society. These changes notwithstanding, throughout the world, the assumption
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that psychology and psychiatry are merely concerned with reducing suffering
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persists to a large degree.

Positive psychology does not suggest abandoning efforts and curing psycho-
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logical disorders. Instead, positive psychology complements these efforts by

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addressing the ‘other half’ of the human psychological experience: how to better
enjoy one’s life and maximize one’s potential from an already normal starting
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point. Although this approach may at first seem naive, Seligman originally argued
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that it was time to look at people who are doing reasonably well and find ways
for them to increase their levels of life satisfaction and well-being. The question
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central to this pursuit is: ‘What makes people feel good, maintain optimism and
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lead healthy lives?’ The goal of positive psychology is to answer these questions
by providing tools to people at so-called ‘baseline’ states of satisfaction and hap-
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piness to increase experienced levels of happiness. Positive psychology posits

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that the possibility for all human beings to experience positive relationships, emo-
tions, feel engaged with and find meaning and purpose in their lives is not a fairy
tale but intimately accessible and objectively achievable.

13.1.9 How to reap the rewards offered by positive psychology?

Some of the initiatives mentioned earlier invariably concern themselves with
crafting policy suggestions based on the results of refined and better calibrated
measures of economic and subjective well-being. Taking the cue from the find-
ings of positive psychology will further strengthen governmental promotion of
well-being by identifying those behaviours which will lead to greater degrees of
life satisfaction and subjective well-being. Once citizens are given the tools to
answer questions such as ‘How happy are you?’ ‘How engaged are you with your

13_Yu et al_Ch-13.indd 244 11/15/2013 3:47:44 PM

 Happiness and well-being 245
life?’ ‘How positive are your relationships and emotions?’ a new level of aware-
ness will result. Many free-of-charge online measures are available at present
(Authentic happiness, 2012). Using the strengths-based model, individuals are
able to ascertain their signature strengths, and measure levels of optimism and
resilience.

13.2 Measuring happiness

13.2.1 How to measure subjective well-being?
In the study of happiness, a challenging task is to construct meaningful statistical
indicators of subjective well-being. Diener et al. (1999) have reviewed subjective
well-being (SWB) studies for the last three decades and proposed that SWB indi-
cators should reflect the individual’s evaluation of his or her sentimental state.
SWB is an umbrella term including both positive and negative components

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(Diener, 1984). Following the notions of positive psychology set out earlier, a

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synonym of SWB can be happiness. Ng (1996:1) states that ‘For most people,

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happiness is the main, if not the only, ultimate objective of life’. Happiness is a
subjective state. An individual may not be consciously aware of it but people
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simply know their own state of happiness. With this assumption, happiness
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researchers usually rely on self-reported feedback to extract happiness data (Tella
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and MacCulloch, 2006; Frey and Stutzer, 2002).

This direct approach deviates from the usual way of studying subjective value:
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the contingent valuation approach. The contingent valuation approach provides

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hypothetical scenarios and asks respondents to place a value on each scenario.

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Table 13.1  Questions asked in the happiness surveys

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Surveys Questions Happiness

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General Social Survey (GSS) Taken all together, how would you Affective
(2010 Ballot 3), USA say things are these days – would you
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say that you are very happy or not too

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European Social Survey
(ESS) (2010–11), EU
Office for National Statistics
(ONS) Annual Experimental
Subjective Well-being
(2011–12), UK
World Value Survey (2010–12),
Global
Gallup World Poll (2008),
Global
happy?
Taking all things together, how happy Evaluative
would you say you are? (Extremely
unhappy 0, …, Extremely happy 10)
Overall, how happy did you feel Affective
yesterday?
Taking all things together, would you Evaluative
say you are: (1) Very happy; (2)
Rather happy; (3) Not very happy; (4)
Not at all happy?
Did you experience happiness during Affective
a lot of the day yesterday?

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 246  Wai Kee Yuen, Mark Greene and Wan Ling Chu
Some problems arising include the use of hypothetical events that may entail
strategic behaviour and unreliable results because of the lack of knowledge relat-
ing to the hypothetical events. Simple direct happiness questions carry little
information and do not require respondents to evaluate cause–effect relationships
relating to the question (Table 13.1). In reality, simple questions are less cogni-
tively demanding than those found in a contingent valuation approach. Rousseau
(2009) points out that accepting simple direct happiness questions data as a meas-
urement of happiness implies that economists put trust in what respondents say
thus departing from customary approaches.
Helliwell’s (2012:6) World Happiness Report 2012 classifies the measurement
of happiness into two broad dimensions: ‘affective happiness,’ and ‘evaluative
happiness’. Affective happiness reflects the experience of the net affective state,
i.e., positive affective states minus negative ones (Bradburn, 1969). Davern et al.
(2007) found empirical evidence that a large variation of happiness comes from

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affective states. Evaluative happiness is a self-assessment of one’s life and asks

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the respondent to reflect on one’s self-esteem which is partially composed of self-
concept, self-respect and self-confidence.

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Both happiness measurements attempt to capture the causal relation between hap-
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piness levels and life from different directions. Affective happiness captures short-
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term emotional fluctuations in happiness, whereas evaluative happiness captures the
overall or long-term conceived happiness of one’s place in life. Any good indicator
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of happiness should provide a good integration of these two happiness dimensions.

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For example, Gross National Happiness (GNH) involves nine domains with 124
variables in 33 clustered indicators (Ura et al., 2012; see Box 13.2).
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Box 13.2  Gross National Happiness

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Gross National Happiness (GNH) measures the quality of a country in a more holis-
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tic way than Gross National Product (GNP) and believes that the beneficial develop-
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ment of human society takes place when material and spiritual development occur
side by side to complement and reinforce each other. It is meant to orient people
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and a nation towards happiness and is primarily intended to improve conditions

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of not-yet-happy people. At the same time, it is distinct from western literature in

happiness: first, it is multidimensional in nature and second, it internalizes other-
regarding motivations.
Bhutan’s GNH index provides an overview of performance across nine domains
of GNH: psychological well-being; time use; community vitality; cultural diversity;
ecological resilience; living standard; health; education; and good governance. The
GNH index is aggregated from 33 clustered indicators among the nine domains,
using the aggregation method called Alkire Foster. Each clustered indicator is com-
posed of several variables, with a total of 124 variables in the GNH index. All the
nine domains are equally weighted as they are considered to be equally important
and none of them can be permanently ranked as more crucial than the others. The 33
indicators among the nine domains are roughly equally weighted except those that
are subjective and self-reported, which have lower weights, and those that are more
objective and reliable, which have higher weights.

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 Happiness and well-being 247
Under the GNH index, three cut-off points, 50, 66 and 77 per cent, have been
to identify degrees of happiness. People in Bhutan are divided into four groups
depending upon their degree of happiness. People who have achieved sufficiency
in less than 50 per cent are ‘unhappy’; those have sufficiency in 50–65 per cent of
domains are ‘narrowly happy’; those have sufficiency in 66–76 per cent domains
are called ‘extensively happy’ and those have achieved sufficiency 77 per cent or
above domains are ‘deeply happy’. Finally, to have one overall index, the cut-off is
set at 66 per cent; that is, people would be considered as happy when they have suf-
ficiency in 66 per cent of the indicators or more.

Source: Ura et al. (2012:9).

13.2.2 From needs to satisfaction: Using Maslow’s HGNR to posit a needs-

met-based ‘happiness’ determinant

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One example to illustrate the integration of the two happiness dimensions can
be found in the structure of the Happiness Gross National Realization indica-

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tor. The Economic and Well-being Project at Hong Kong Shue Yan University

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has been conducting Random Digital Dial (RDD) telephone surveys to meas-
ure various indicators related to subjective well-being among the Hong Kong
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public since 2006.
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In the analysis of affective happiness, the survey elicited self-reported happi-

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ness data by asking respondents to report directly on their happiness. ‘How happy
is your life now? Certainly not happy = 0.25, Not quite happy = 0.5, Quite happy
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= 0.75, Certainly happy = 1’. Affective happiness can be extracted from the aver-
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age value of the happiness data.

In the analysis of evaluative happiness, the survey borrows from the theory
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of Abraham Maslow (1970), who conceptualized the elegant Human Hierarchy

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of Needs to explain motivation. An elaboration of his theory differentiates the

study of experienced pleasure (hedonics) from that of subjective well-being
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(eudemonics) by positioning well-being as a supraset within which the satis-

faction of basic needs makes up just one part. Although Maslow’s theory has
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not been empirically verified, the purpose for its inclusion in this chapter is
for its vertically oriented spectrum with ‘pleasure’, resulting from the fulfil-
ment of humanity’s most basic needs (physiological, safety), at the bottom
and what Maslow described as the pinnacle of well-being (self-actualization)
at the top. The intermediary levels connecting hedonic gratification (the
realms of physiological and security needs) and eudemonic self-realization
(growth needs) are the important need-domains of ‘love and belonging’ and
‘esteem and self-esteem’.
Maslow’s framework, a graduated scale with identifiable milestones defined
on a needs-met basis, is helpful for the purpose of polling the populace. Clearly,
the consequence of not satisfying those needs on the lower end of the spectrum
is simple to comprehend; humans cannot survive without food, water, sleep and
shelter. Thematically, it follows that with ‘death’ on one end of the spectrum,

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 248  Wai Kee Yuen, Mark Greene and Wan Ling Chu
Table 13.2  Maslow’s levels of Hierarchy of Needs and related happiness literature

Levels of Hierarchy of Needs Literature

Physiological Health is always the fundamental factor for happiness

(Layard, 2005; Veenhoven, 2010; Vani, 2006)
Security As income secures our basic needs it cannot increase
our happiness (Easterlin, 1974; 1995; 2002; Lane,
1993; Diener et al., 1993)
Love/Relationship Relational goods such as family and friends
relationship are important for our happiness (Layard,
2005; Benedetto and Luca, 2010; Meliksah and
Metin, 2010; Vani, 2006)
Self-esteem Job achievement can help to build individuals’ self-
esteem, therefore is one of the important factors for
happiness (Layard, 2005; Tella et al., 2003)
Self-realization This is something whereby individuals think that they
have the talent to achieve and/or have the right to

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embrace, for example freedom, a clean and

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unpolluted environment, collective memories and

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social equality of individuals. Realizing these social
goals can enhance the happiness of individual

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(Layard, 2005; Ferrer-i-Carbonell and Gowdy, 2005;
Tella et al., 2003; Diener et al., 1999)
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‘life’ resides on the other. The life described on the upper end of the spectrum is
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not merely one of survival. Instead, a self-actualized life (to borrow Maslow’s
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term) connotes a fulfilled one suffused with well-being (see Table 13.2).
This hierarchical model allows researchers to assess a respondent’s position on
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a vertical spectrum of behaviours and experiences as a way of testing the following

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hypothesis: needs met contribute to and qualify what is meant by the term ‘happi-
ness’. At the base, we see pleasure resulting from the satisfaction of basic desires,
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whereas at the apex, ‘happiness comes through fulfilment as a person’ (Shaw and
Taplin, 2007). Maslow is invoked here not as a tool for empirical measurement but
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as a model for identifying many gradations of what is meant in human experience

to be ‘happy’.
Clearly, a collective goal of self-realization implicitly requires the satisfaction
of those other needs that are not necessarily linked to income levels. Further,
positing and measuring the satisfaction of ‘higher’ needs in a cumulative frame-
work provides a government a clearer picture of its citizens’ collective state of
well-being on a needs-met basis.
To capture the hierarchical model, the survey designed four questions,
each representing a constituent level of the hierarchy. Assuming that respond-
ents should be able to meet their physiological needs in a rich country like
Hong Kong, the questions begin with the second level of needs described.
Table 13.3 summarizes the questions and the level of need represented by
each.

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 Happiness and well-being 249
Table 13.3  Core questions for the hierarchical model

Questions Level on the Hierarchy of Needs

Are you confident that you are protected from Security

violence and crime in your neighbourhood?
If you were seriously ill at home, is there a Love/relationship
friend, neighbour or family member you could
count on to take care of you?
Do you see yourself in a positive light? Self-esteem
Are you on track to realizing your full inner Self-realization
potential?

Opening a vertical dimension of satisfaction that has as its base those necessi-
ties required for survival, Yuen and Greene (2008) introduce the Goals National

n
Realization (GNR) indicator:

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4
GNR = ∑ Wi Ci

bu
i =1

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where Ci represents the percentage of certainty of the four ‘Needs’ questions:
C1 = need for security; C2 = love/relationship; C3 = self-esteem; and C4 =
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self-realization. Wi is the distributed weighting: W1 = 0.1; W2 = 0.2; W3 = 0.3;
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W4 = 0.4.
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The indicator is assigned the numerical weighting indicated above after tak-
ing into account only those positive responses of which the respondent was
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certain: security = 1; love/relationship = 2; self-esteem = 3; and self-realization

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= 4. Taking the average of the two indicators generates a summary indicator of

subjective well-being: the Happiness-Goals National Realization indicator
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(HGNR):
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HGNR = (Happiness + GNR)/2

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Boeri (2007) reminded researchers that in evaluating any summary subjective

F
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well-being indicators, researchers should focus on variation rather than levels

since the indicators comprise an aggregate of individual perceptions. By focusing
on variation, researchers can remove at least the time-invariant components of
subjectivity. Giovannini (2007) pointed out that subjective happiness data should
be used in the context of policy formation rather than for ranking countries.

13.3 Policies towards a happier society

The well-known ‘Easterlin’s Income-happiness Paradox’ recalls the traditional
saying that ‘money cannot buy happiness’. Easterlin (1995) found that although
the economies of developed countries have continued to grow, their social happi-
ness levels have remained unchanged. In essence, the positive correlation
between income and happiness tends to break down over time. Lane (1993)

13_Yu et al_Ch-13.indd 249 11/15/2013 3:47:46 PM

 250  Wai Kee Yuen, Mark Greene and Wan Ling Chu
showed that income only affects the happiness of the poor. As long as people’s
basic needs are fulfilled, getting richer does not make people happier. Kahneman
and Deaton (2010) found that beyond a household income of US$75,000 a year,
money ‘does nothing for happiness’.
As income does not seem to make people happier, researchers have turned to
seeking determinants other than income. Layard (2005) identifies the ‘big seven’
factors that influence happiness in adult life: family relationships; financial situ-
ation; job; community and friends; health; personal freedom; and personal values.
Tella et al. (2003) showed that unemployment, inflation and inequality affect the
happiness of the general public. Ferrer-i-Carbonell and Gowdy (2005) found
relationships between an individual’s environmental attitude and well-being.
Veenhoven (2010) shows that happiness is related to freedom, good health and
civil behaviour. Benedetto and Luca (2010) show that happiness is associated
with relational measures such as relationships with family and friends. Meliksah

n
and Metin (2010) find that friendship quality is an important predictor of happi-

tio
ness. Tella and MacCulloch (2005) found evidence that individuals declare them-
selves to be happier when the political party they support is in power. Ott (2005)

bu
shows that nations with high happiness data also usually have low happiness
tri
standard deviation. Diener et al. (1999) argued that happiness is the perception
is
that one is progressing toward important life goals. Additionally, Diener also
argues that demographic variables (e.g., age, gender and ethnicity) account for
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only a small portion of happiness variance in most populations. Vani (2006) takes
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a global perspective on happiness and finds that globally, happiness is related to

religion, standard of living, job, family and social life, good neighbourhoods and
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sound health.
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13.3.1 Happiness and work–family balance

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Recent literature identifies that relational good is one of the main determi-
nants of happiness (Gui and Stanca 2010). For most people, the family rela-
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tionship is the first relational good they experience and continue to do so

throughout life. In fact, family relationships are usually the most important
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relationships among all relational goods. Family benefits us with a sense of

belonging, fulfils our love and relationship needs and provides us with ulti-
mate source of psychological support. Magliulo (2010) in the review of the
Austrian theory claims that happiness largely relies on relational goods.
Borooah (2006) provides evidence that a good family is one of the determi-
nants of happiness for people globally.
Family relationship can be positively linked with happiness. It is often easy for
family members to identify other happy family members. Sandvik et al. (1993)
show that happy people are always described by their family members, such as
parents, husbands and/or wives as being happy. Just image the happiness of shar-
ing your joyful events with your family members. If your family members are
always happy, it is likely that you will be happy too. Yet there are constraints on
the happiness that builds upon family relationships. For example, in a small

13_Yu et al_Ch-13.indd 250 11/15/2013 3:47:46 PM

 Happiness and well-being 251
nuclear family with father, mother and only one child, the obligation for the par-
ents is to earn enough to finance living expenditures, provide the child a comfort-
able home and an education, and to be concerned with the child’s health and to
allocate time for looking after the child. In the above example, the choices that
enable work–family balance lie in the allocation of time for the child and the
allocation of time to earn money for supporting family expenditures. Moreover,
the happiness gained from a good balance is also constrained by the family envi-
ronment such as the family structure and family obligations. If the family struc-
ture changes to include more members such as grandfather and grandmother,
family members can share the burden to look after the child, thus family members
will be happier. In the traditional Chinese family, the father is usually responsible
for earning money to support the whole family while the mother is responsible
for allocating time to take care of the child and the elders. Hence, father and
mother are not sharing the financial burden family equally. Nowadays, both

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father and mother tend to share the financial burden more equally than in the past.

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Plug and van Praag (1995) indicate that adequate income is necessary to support
a larger family, while maintaining the family’s relative subjective well-being.

bu
Indeed, how much money should be earned, what kind of education should be
tri
provided, how comfortable the home can be, all depend on the family’s social
is
status. Thus the social environment will constrain the happiness gained from the
right work–family balance. Another example is that expectations among family
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members may cause pressure, thus impinging upon happiness. Because of the
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success of the one-child policy in China, parents have expectations for their only
child. From the point of view of the only son or daughter, high expectations from
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their parents may generate pressure and stress, and will thus impact the happiness
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of the child. In this example, the constraint on the happiness of the only son or
daughter comes from the family structure and the social values. To fulfil family
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expectations, the only son or daughter may choose to allocate more time to work
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than to cultivate family relationships. This may have a negative effect on the hap-
piness of the whole family.
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Working relationships can be positively linked with happiness. Having a job

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provides an individual a position in society and contributes toward the estab-

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lishment of self-esteem. People work for money as well as job satisfaction.

Glaeser et al. (2002) considered those satisfactions as ‘non-market returns’
which can be directly related to happiness and individual relationships. People
may prefer to sacrifice higher wages for getting higher job satisfaction. If an
individual has a good relationship with his/her boss, it may be the case that they
will feel happier at work. A working mother that needs to look after her child
will always be happy if she can get her boss to understand her situation and
arrange flexible working times. Booth and van Our (2008) find that women
prefer part-time jobs, especially for partnered women. When a positive and sup-
portive relationship exists with one’s working team, it is likely that workplace
engagement will be experienced with higher levels of happiness (Argyle,
1989). For example, if a family member were to fall seriously ill and require
help, a good relationship with working colleagues would create the context

13_Yu et al_Ch-13.indd 251 11/15/2013 3:47:46 PM

 252  Wai Kee Yuen, Mark Greene and Wan Ling Chu
where they could chip in and share the work allowing to the allocation of more
time to the family member that needs help.
According to the above examples, the ability to make choices that achieve
work–family balance depends on the working environment. A flexible working
environment and a good working relationship release the constraint in the choices
enabling work–family balance thus resulting in higher levels of subjective well-
being. In high unemployment conditions, however, colleagues may compete to
avoid being fired. In this case, the working environment will become harsh. You
may choose to allocate more time to work but you may not be happier. Public
sector workers are usually happier than those working in private sector, since they
are less likely to be let go, especially during a recession. A large amount of lit-
erature exists reporting on the importance of job security on individual happiness
(Green, 2006; Gallie, 2003).

n
13.2.2 Happiness inequality

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Although measures of happiness are important for a society, it is clear that

bu
people do not share similar levels. Indeed, recent literature shows that happi-
tri
ness inequality is an important social issue. Hopkins (2008) provides a survey
is
of different theoretical models of relative concerns and their relation to ine-
quality and happiness. Graham and Felton (2006) address the question of
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happiness inequality by analysing happiness studies undertaken in Latin

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America. Yang (2008) finds that despite the inequality of opportunity faced
by the elderly, happiness increases with age. It seems that happiness follows
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an inverse U shape as people get older (as an example, see Figure 13.3).
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Children are always happier, but become less happy as they grow up. This
may due to the fact that adults need to make a living and strive for success to
fs
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24%

22%
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Percentage ‘certainly happy’

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20%

18%

16%

14%

12%

10%
18-24 25-34 35-44 45-54 55-64 65+
Age

Figure 13.3  Percentage of people who are ‘certainly happy’ by age in Hong Kong, 2011.
(Source: Economic and Well-being Survey, 2011, conducted by the authors.)

13_Yu et al_Ch-13.indd 252 11/15/2013 3:47:47 PM

 Happiness and well-being 253
attain prosperity and achieve social status. By the time people reach approach
retirement age, they become happier again. One explanation is that the elderly
are poised to enjoy their rest of the lives with less pressure, assuming they
have a modicum of health.
Graham (2008) reports that upwardly mobile, lower-middle-income respondents
are made unhappy by inequality. This upward social comparison tends to correlate
with lower levels of subjective well-being. Liao et al. (2005) examine quality of life
differences at both societal and individual levels, in Taiwan and Hong Kong. Their
results suggest that subjective perceptions of fairness produce a significant effect
upon experienced quality of life. Lu and Shih (1997) identified and compared per-
ceived sources of happiness among 18–60-year-old community residents in
Kaohsiung, Taiwan, with their analogous groups in the west. Their qualitative analy-
sis showed that harmony of interpersonal relationships is one of the sources and
determinants of happiness. Demir and Weitekamp (2007) used a sample of 423 young

n
adults and found that friendship qualities can predict people’s happiness.

tio
The literature mentioned earlier has successfully provided researchers with an
understanding of happiness inequality. With progress made in understanding

bu
human resilience, optimism and the relationship between these and other con-
tri
stituent determinants of subjective well-being, policymakers can develop better
is
policies to enhance the emergence of economically healthy and happy societies.
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13.3.3 Happiness policies

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Recent global trends have revealed an increasing demand from citizens, academia
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and think-tanks for governments to reassess policy goals that are driven solely by
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economic concerns. The shift in question is towards paying equal attention to

social happiness, subjective well-being, and economic issues. The drawbacks of
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economic-driven policies have been well documented. Policies that emphasize

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national income growth, for example, may ignore environmental issues, problems
of income inequality and many other issues concerning social well-being. Despite
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these trends, however, most policymakers still focus on economics goals to the
exclusion of a broader perspective.
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International institutions have led an effort to persuade policymakers to

rebalance their policy goals. The best known is, perhaps, the human develop-
ment concept, promoted by United Nations Development Programme (UNDP).
The human development concept is beneficial as it attempts to shift the focus
of policymakers from national income toward a greater concern with subjective
human needs and interests. Although the first Human Development Report
appeared in 1990 (Human Development Reports, 2012), very few policymakers
have actually targeted or implemented human development concepts in their
agendas. Instead, policymakers have tended to proceed with a status quo bias.
This may be due to the fact that certain economic policies have been dominant
for so many years that there is little incentive or rationale for policymakers to
evolve their framework without a vociferous demand from the general public.
It would also appear that the human development concept has not yet won the

13_Yu et al_Ch-13.indd 253 11/15/2013 3:47:47 PM

 254  Wai Kee Yuen, Mark Greene and Wan Ling Chu
heart of the general public. The human development concept, as well as other
similar development concepts such as Measuring the Progress of Societies
(OECD), may be too technical or tend to target policymakers and academics to
the exclusion of a wider audience. As sophisticated development concepts may
lie outside the realm of comprehension by the general public, there is little
motivation for policymakers to shift their focus.
To win the heart of the general public, perhaps a new type of concept is
required. Recently, the idea of happiness policy has garnered a great deal of
attention. This may be due, in part, to the fact that everyone can be their own
‘happiness expert’, as most people have their own strategies and definitions in
place to define happiness. Along this line of thinking, there may be no need to
explain or define the concept of happiness to the general public. Still, a surge in
demand for happiness can serve to motivate policymakers to explore the possi-
bility of including the question of happiness in new inclusive policies.

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By definition, market economies emphasize competition. In the real world,

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however, fair competition is hard to find. Some players will always have an infor-
mation advantage, a first move advantage and/or high wealth advantage. Hence,

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happiness policies should move away from market economics and emphasize

tri
social well-being. Even though this may result in giving up some economic ben-
efits, a successful happiness policy should be able to create opportunities for
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every individual to fulfil their needs for self-esteem and self-realization. To create
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such opportunities, the government needs to reduce the burden of the public in
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solely pursuing wealth accumulation. A different approach would focus on pro-

viding individuals with more time, more space and more opportunities for
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involvement.
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To give people more time, one possible happiness policy would include creat-
ing a work-hour ceiling or allowing a greater number of legal holidays. One
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collective reason for encouraging people to engage in long work hours is that
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when everyone is working long hours, individuals who do not put in the extra
time give others the impression that they are lazy. This, in turn, affects his/her
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future career negatively. One side-effect of working long hours is that people
need to give up time in which they could be exploring their talents and behav-
F
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iours other than those geared towards earning money. More holidays or a work-
hour ceiling would allow a greater number of workers to have more leisure time.
It is hoped people would use this time to help achieve self-esteem and self-
realization. Imagine, for example, seven holidays dedicated to art and seven for
sports. On these days, the government would encourage the public to explore
their talent in the arts or sports by hosting large festivals and campaigns. It is
believed this would make Hong Kong people happier.
To provide people more space, a happiness policy of creating a greater
number of public spaces in the urban area would be very helpful. In many
densely populated cities, one reason people are unhappy is due to population
density. People simply do not have enough space to engage in activities of
self-exploration. More common spaces would provide opportunities for peo-
ple to explore their talents and to communicate with others. Community

13_Yu et al_Ch-13.indd 254 11/15/2013 3:47:47 PM

 Happiness and well-being 255
involvement can improve individual happiness. Imagine the government allo-
cating an area in Central for dance enthusiasts to dance in public. Such a step
would enhance an artistic environment as well as allow people to explore
themselves, thus increasing overall happiness levels.
Indeed, happiness policies do not necessarily need to work against economic
policies. The literature shows that a happy population can cause growth. For exam-
ple, Kenny (1999) found a weak causal link from happiness to economic growth.
The happiness policy orientation proposed is conceived to provide people more
time, space and civil involvement. Forging this path will enhance the formation of
social capital. More time and space for people to communicate and get involved
will allow them to share their interests, knowledge and other information. In eco-
nomics, sharing is a kind of external benefit that can only be enjoyed when people
interact. The external benefit of social capital plays an essential role in enhancing
sustainable economic growth. Therefore, it is argued that a happy society is essen-

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tial for a rich economy to maintain and pursue healthy growth.

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