Course support for the DIA at the ESC Pau

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Happiness and
Well Being
February 1 2017
Introduction
©2016 L. SCHLENKER
Managerial Decision Making
http://Dsign4.biz

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Introduction
©2016 L. SCHLENKER
Introduction
Approaches
Considerations
Exercises
Indexes
Conclusion

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Introduction
In the mythical principality of Laàs….
 What is well-being?
 Can we decide to be happy?
 How do we measure it ?
…the goal of policy is well-being

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Introduction
©2016 L. SCHLENKER
• In 1781 Jeremy Benthamoutlined a
philosophy of utility that assessed
the merits of an action according to
how much happiness it produced.

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• The Freudian perspective,
we are seen as captive in
the “hands” of forces
unknown to us
• In the Behavioral Approach,
we are seen as being
manipulated without being
fully aware by classical and
operant conditioning
• The Humanistic approach
explores the meaning of our
existence, the role of free
will, and the uniqueness of
each individual
Introduction

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Models
• Life satisfaction: how closely reality matches your objectives
• Emotional Well-Being: experiencing positive emotional states
• Positive Functioning: having a sense of purpose in life
• ​Social Well-Being: feeling connected with others
• ​Vitality: feeling alert, energized and alive in daily life

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• Mary works well in your public relations
office.
• A new employee, Jane, turns out to be a
born talent.
• Mary’s direct boss just quit, and you’re
looking for someone for the job. Jane
seems a great fit.
• But it may be awkward to promote Jane and
make Mary her subordinate.
Exercises

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• Robert and John went to school together,
and they got married roughly at the same
time.
• Robert and his wife have not had any
children.
• John and his wife had a first child after
one year, and, two years later, they had
the second one, now eight months old.
• Robert is on a ski vacation with his wife,
while John can’t even dream of a ski
vacation with the two children
• Do you think that Robert is happier than
John?
Exercises

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You are the owner of an office building
• your tenants are complaining about the
elevator.
• It’s old and slow, and they have to wait
a lot.
• Several tenants are threatening to
break their leases if you don’t fix the
problem.
©2016 L. SCHLENKER
Exercises

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Prone to manipulations
 Dates and overall well-being
 The weather: “deducting”
irrelevant effects
 Kahneman’s Day
Reconstruction Method
SWB refers to a broad category of evaluations about life satisfaction,
both in general, and in specific domains, like work, family, health, etc.
Introduction

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Economics
 Revealed preference: one
allocation is better than another
 Individuals get what they want
 What do people really want ?
Fleurbaey and Blanchet, “Beyond GDP”
Approaches

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Sociology
 These lists include the
elements of success
 Which elements matter?
 How do we determine
preferences?
Approaches

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Psychology
Expected utility: how you feel at
one point in time
These accounts provided by
individual can be
evaluative/cognitive
 Subjective well-being- are we
talking about the same thing ?
Approaches

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• Abraham Maslow explored the
sources of happy, healthy
personality.
• Human beings are free-willed
individuals, and not as captive
by unconscious drives
• His contribution is in the
hierarchy of needs, and in the
study of the psychologically-
healthy individuals.
Approaches

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We strive to obtain a list of
worthwhile pursuits
• Careers
• Friendship
• Health
• Material comfort
• Education
• Love
• Knowledge….
Considerations

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 What should be on the list?
 Should everyone be treated
equally?
 How can you compare
employment and health?
 Who decides what is most
important?
MoelsConsiderations

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material living conditions
• housing
• income
• jobs
quality of life
• community
• education
• environment
• governance
• health
• life satisfaction
• safety
• work-life balance
Considerations

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• Concerns:
 Do people know what is good for
them?
 How do treat “anti-social”
preferences?
 What if what you want is bad for
me?
Well-being is a question of satisfying your preferences and
fulfilling your desires
Considerations

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Well-being is a question of how people feel
 How satisfied are you with your life?
 Sad, happy, exited, bored
• Concerns:
 Adaptation and changing
aspirations: hedonic treadmill
 Personality traits (an individual
fixed effect)
 Objective and subjective may not
“match”.
Considerations

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Gross National Happiness is
more important than Gross
National Product
Jigme Singye Wangchuk
King of Bhutan 1972
Indexes

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Indexes
• Economic Wellness: measured by direct survey
and statistical measurement of economic
metrics (consumer debt, average income to
consumer price index ratio, income distribution,
etc.)
• Environmental Wellness: measured by direct
survey and statistical measurement of
environmental metrics (pollution, noise, traffic,
etc.)
• Physical Wellness: measurement of physical
health metrics (severe illnesses, etc.)
• Mental Wellness: measured by direct survey and
statistical measurement of mental health metrics
(usage of antidepressants, rise/decline of
psychotherapy patients, etc.)
• Workplace Wellness: measured by direct survey
and statistical measurement of labour metrics
(jobless claims, job change, workplace
complaints and lawsuits, etc.)Global Gross National Happiness Survey.

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Indexes

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 Analyzing the use of emotion words for
approximately 100 million Facebook users
 Word use in status updates ≈ self-reported
satisfaction with life
 Represents overall emotional health of the nation
The Value of a Happiness Economy
Indexes

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 SWB correlates strongly with national wealth
 Economic growth in wealthy countries has not led to
much higher SWB
 Within nations correlations between income and SWB
are low
 People valuing money tend to be more unhappy, unless
they are rich
Diener and Oishi (2004) showed that participants from 28 nations
consistently ranked happiness as more important than wealth,
health, love and heaven!
Conclusion

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 Income: The correlation between individual income
and happiness tends to fall between .17 and .21.
 Health: In a meta-analysis of over 200 studies
correlations were around .30
 Personality: neuroticism is strongly related to
negative affect and extraversion is strongly related to
positive affect
 Social relationships: have a powerful effect on well-
being, and are perhaps the single greatest single
cause (Argyle, 2001)
Conclusion

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What if generosity were a currency?
 Chocolate lovers posted promises
of generoisity
 Then they picked up their chocolate
payment at the store
 …and essentially broadcast to their
social graph to "pay it forward."
Conclusion

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Conclusion
 There are often large economic
discrepencies from one region to
another
 Local objectives may vary
 Who do you sample - different people
respond differently to questions about
their happiness
 Hedonic adaptation - people’s
evaluation of their own emotions is
relative

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Introduction
For the mythical principality of Laàs….
 Explore well-being in a local context
 Define the index
 Discuss how you will measure it
 Propose strategies to improve the index
Propose a local well-being index