Understanding Well-being Data

chapter 4 Discovering ‘the new science of happiness’ and subjective well-being

Happiness economics

People down the ages have agreed that money can’t buy happiness, though this exact form appeared only in the nineteenth century.

(Cresswell 2010, 278)

Lord Richard Layard was called the UK’s ‘Happiness Tsar’[1] and his seminal book Happiness: Lessons from a New Science [2] consolidates aspects of what Bache and Reardon call the second wave of well-being [3]. The book presents the rationale behind ‘happiness economics’, which this chapter covers as the Greatest Happiness principle, combined with aspects of positive psychology, together with established well-being indicators and newer subjective well-being measures that we will come back to in greater depth throughout this Chapter.

The book Happiness is a call to action to do things differently, in a similar way to the politicians’ statements and reports from international agencies we have already encountered. We are going to begin by looking at Layard’s presentation of knowledge and understanding of well-being and data, as an example from the field of happiness economics. The book opens with the idea that money cannot buy happiness, explaining that this is ‘no old wives’ tale’, but proven by ‘many pieces of scientific research’ [4].

The book opens with ‘the Easterlin Paradox’ [4] that we encountered in Chap. 2. In short, through looking at subjective well-being data, together with data on income, Easterlin found that while people with higher incomes tend to be happier than those with lower incomes, increased average income has not increased average happiness [5]. On this basis, Easterlin states that economic growth does not lead to an increase in happiness, at least in countries that are already relatively wealthy [6]. ‘The Easterlin Paradox’ remains a recurrent topic in discussions of well-being data and measurement, even though it has been challenged several times [7]. Easterlin has nevertheless come out to defend the idea when it has been challenged [8] and much work continues to build on this thesis. For example, testing whether it is generalisable [9], that is whether the theory works when tested in various ways across countries, contexts and wealth bands. The paradox therefore remains a compelling idea for economists.

The Easterlin paradox is a popular framing narrative to introduce the importance of well-being data and knowledge, especially when it comes to understanding society and policy. If he is not the opening gambit, he’s near the top of the bill [10]. Or, more specifically, his findings published in 1973 are presented as the turning point in understanding the relationship between social progress and societal well-being. For if economic growth does little to improve social welfare, should it be a primary goal of government policy? Layard explains why not, as well as how economics can help us understand how not, with the help of philosophy.

The position taken is that ‘much of the social progress that has occurred in the last two hundred years’ has been driven by ‘the Greatest Happiness principle’ [11]. The point of Jeremy Bentham’s ‘noble idea of utilitarianism’ for Layard is that:

it is fundamentally egalitarian, because everyone’s happiness is to count equally. It is also fundamentally humane, because it says that what matters ultimately is what people feel.

The best society, therefore, is one where citizens are happiest and therefore the best policy produces the greatest happiness and the most moral action produces the most happiness for those affected [11]. This is in tension with ideas of happiness maximisation, which is that people will, or should, have the right to pursue or consume or do whatever makes them happy, and they will always want more happiness. We touched on issues associated with individualism in Chap. 2, as fundamental ones of ideology and social justice.

Layard introduces eighteenth-century enlightenment philosopher Jeremy Bentham as a ‘shy kindly man’ who was a great thinker. He argues that Bentham’s ideas had been difficult to apply in practice because ‘so little was known about the nature and causes of happiness’, which ‘left it vulnerable to philosophies that questioned it’ [11]. The implication being, of course, that this has been resolved because ‘the new science’ means we now have this information. Indeed, the front cover of Layard’s book proudly states using red block capitals in a golden sun-like graphic shape: ‘INSIDE: THE SEVEN CAUSES OF HAPPINESS’.

It is actually rather brave for an academic to announce they know the causes of happiness; doing so asserts a degree of certainty that is infamously evasive. In fact, the influential Sarkozy commission report that also surveys the evidence, in particular from economics, notes:

A general difficulty for the study of the determinants of subjective well-being is to distinguish between causes and correlates.

(Stiglitz et al. 2009, 150)

Ironically, it is difficult to identify the ‘seven causes’ in the book, as they are not explicitly presented inside. Instead, on page 62, in a sub-section of a sub-section called Adult Life, and approximately half way through the chapter called ‘So What Does Make Us Happy?’ is a box, much like the ones in this book. Layard’s is called ‘The Big Seven factors affecting happiness’. The box lists family relationships; financial situation; work; community and friends; health; personal freedom; and personal values. It states the first five are in order of importance. Interestingly, they are able to be ordered by a sense of importance using data from the US General Social Survey. Freedom and values are added as ‘two other key factors’ and in a footnote, Layard explains: ‘these last two factors cannot be ranked, but their relevance is shown in the table’ [12]. It’s not explicit why they cannot be ranked; it is also, therefore, not made clear why they were included to make seven, rather than five.

As you will see in the second half of this book, unequivocal claims that one thing ‘causes’ happiness, or improves well-being, rather than more modest claims, such as ‘contributes to’, ‘is related to’ or ‘affects’ are extremely difficult to substantiate. As with the Easterlin Paradox, which states that increased wealth does not [necessarily] cause increased happiness, it is difficult to claim something is a universal truth. Studies looking at similar relationships with similar data have not resulted in causal claims, and other evidence and theories that are drawn on are contested. Yet, as Chaps. 7 and 8 of this book demonstrate, we often find that useful insights with well-being data become repackaged to make causal claims, which when we look ‘under the bonnet’ should be a bit less assertive or emphatic.

Layard’s ‘big seven’ may read a bit like an ‘objective list’[13] of what is important to well-being, similar to those OECD and UK Office for National Statistics (ONS) examples from the last chapter. Coincidentally, Layard informed both of these organisations as an expert on the advisory panels. You will see that just as the categories differ slightly between the ONS and OECD lists, Layard’s own list of categories as to what causes happiness differs slightly, again.

You may note that Layard’s list does not explicitly include personal security and safety, as the domains discussed in the OECD example from Chap. 3. When you think about the concepts of safety and security, for you they may also sit in relationships, financial security or community. To re-cap briefly on Chap. 3, there are no perfect objective lists of the components of well-being, which tend to involve a subjective carving up of societal and personal concerns. In terms of data, objective lists of indicators tend to rely on ‘proxies’, by which we mean proxy measures where the thing we want to understand, say ‘personal safety’ or ‘personal security’ is measured by data that is seen to stand in for it, in some way, but is not exactly the same thing. The OECD example in Chap. 3 demonstrates how personal safety and/or security is difficult to measure directly and so ‘self-reported victimisation’ is used instead as a proxy. These are administrative data from crimes reported in individual countries (which of course is not the same as actual crime, risk or safety). The OECD replaced the proxy metric with ‘feeling safe walking home at night’. Thus, an objective indicator has been replaced with subjective data, as it has come from surveying how someone feels, rather than the administrative data from reporting crimes. However, we can feel safe and secure because of different domains in our life, and we can feel unsafe and insecure across numerous domains as well.

Crucial to the story of data is the moment when well-being is acknowledged to be more than a list of objective indicators, such as crime rate per nation or in a local area. Instead, well-being is understood as how risk of crime is experienced. Even more crucial to this chapter is the delineation between subjective data about well-being and subjective well-being data. Somewhat confusingly, how people feel about crime is subjective data about an objective well-being indicator. Subjective well-being indicators are different again. They are about how we understand our own well-being and how we feel.

Replacing some proxies with subjective data about how people feel about an objective indicator, such as crime, still leaves many questions about personal well-being. To answer questions about personal well-being, we need more rigorous subjective well-being measures that tell us how people feel over time. This was the gap ‘the new science’ aimed to fill and the driving force of the new well-being indices.[14] This chapter goes on to unpack the development of subjective well-being measures: how they were decided on; what the different measures capture and what they do not, and so on. It looks under the bonnet of ‘the science’, its: history, theory, politics, data and its methods. First of all, we will return to the Greatest Happiness principle.

The Greatest Happiness? And Other Principles

It is said that Jeremy Bentham himself was not convinced that his political project would work, or indeed, could be proven, and he corrected the Greatest Happiness principle later in his life from ‘the greatest happiness of the greatest number’ to ‘the greatest total sum of happiness’.[15] Let us briefly consider the limitations to the Greatest Happiness principle. There are pragmatic objections, which we shall deal with first. The principle assumes that happiness can be affected by what we do and what others do; therefore, happiness is a consequence of our own choices and behaviours, as well as those of others.

To apply the Greatest Happiness principle in policy, then, we need to be able to predict how different behaviours and actions affect happiness, so decisions can be made. In turn, this means we need to know what happiness is, and that behaviours, actions and happiness must be measurable. As we already know, agreeing on what either happiness or well-being is has long proved difficult for philosophers and more recently for measurers. We will also discover in Chaps. 6, 7 and 8, that measuring what we do at a large scale is also challenging. This makes it hard to be sure that one action (whether on a personal or policy level) has positively impacted on happiness, or if an alternative would have done better.

Of course, it is here that the new science is presented to best intervene. As Layard indicates, it generates data and the means to analyse them in order to address the pragmatic objections to the happiness principle. Yet, not all believe that happiness can actually really be influenced by targeted actions or changing an individual’s behaviour. In contemporary society we see judgements regarding other’s behaviours being demonised as bad for well-being (as discussed in Chap. 2), and in ‘COVID-19 world’, the endless recommendations that people go for a walk or a run have little consideration as to whether that is available to them [16]. So, targeted actions are not universal.

Some argue that it is easier to improve those with better well-being first [17]. Relatedly, ‘the utility monster’ was a thought experiment in ethics first developed in the 1970s. It presents a challenge to the Greatest Happiness principle, and to Utilitarianism, more generally. It asks what if a monster could accrue greater happiness from any given resource than anyone else? For example, imagine if being able to attend a concert in a park alone means that the utility monster is happier than all the other audience members in the local community put together. Following utilitarian principles, in order to maximise happiness overall, we’d have to ban everyone except from the utility monster from attending this concert, and potentially any future events ever again. More generally, if the way to maximise utility overall is to make the utility monster as happy as possible, even if this comes at the cost of everyone else’s happiness, are we obliged to do so? While the designer of this thought experiment, Robert Nozick, was proving a point of his own, the issue remains, that achieving the Greatest Happiness principle is not unequivocally fair, or egalitarian.

As such, some argue that instead of focussing on happiness (or well-being), we should focus on social justice and equality. There is an uncomfortable tension in the well-being agenda and those of equality, diversity and inclusion.[18] We have previously touched on Aristotle’s idea of a good life as dependent on a society supported by slaves. The question remains, at what or whose expense do the good lives of some, who make the ‘good society’ depend?

Returning to the Greatest Happiness principle, the main moral objection holds that it justifies a-moral means. This is owing to its consequentialist ethics: that if the aim is generating the most happiness for the most people, or the greatest total sum of happiness, then many actions may be justifiable. An easy way of imagining how this works is in the distribution of financial resources across a population. If you do something to improve the well-being of the largest number, it is highly possible that those who are marginalised (often the most vulnerable) in society will disproportionally suffer. We will return to this issue in the next chapter when we look at how Big Data and newer data practices disproportionately affect people of colour and the poor, for example. At the more dramatic end, such principles are argued against because they can be used to justify genetic manipulation, mind-control and dictatorship [19]. A useful example comes from science fiction. Writer Ursula Le Guin’s [20]. These variations in values and value systems are some of the key tensions in the agenda, especially when they inform us of what is good for our well-being.

‘The status race’ between people is seen as a key contributor to unhappiness [21] and is one of the behaviours we are encouraged to adopt in our commercialised society. Yet, competition is considered a contributor to progress.[22] More than that, though, of course, there is competition between policy domains for resources and competition between academic fields to produce the method that gets used, the data that get used and the knowledge that gets used for policy.

There are several discussions surrounding how the well-being agenda addresses competition. On the one hand, it pretends to flatten competition, while on the other, it reinforces it. See OECD [23] and concepts, such as ‘sustainable competitiveness’ (World Economic Forum 2013[24]. Other influential advocates for the well-being agenda naturalise a desire for ‘success’ and well-being measurements as tools for competition. For example, in a section entitled ‘Why use wellbeing as a measure of progress in society?’ in a report to a think tank, ex-Cabinet Secretary Lord O’Donnell explained:

As individuals we all are keen to know how we are doing: Are we top of the class or in the middle of the pack? So how should we measure success?

(O’Donnell et al. 2014, 10)

Layard’s book both sells the Greatest Happiness principle, whilst also embracing some of the critiques, such as how the endless drive for happiness is bad for people and society, and how ideas of competition and success perpetuate this. There is a sense that some advocates of the movement cherry-pick, ignoring contradictions to tell a clear story, and this is familiar in criticism of the movement and its politics.[25]. The focus on meaningful goals [26] will always lead to questions of meaningful for who and leading to happiness for who. The focus on individualising happiness as something we can (and should) address for ourselves is linked to prominent positive psychologist, Martin Seligman, and his ideas of ‘authentic happiness’ [27]. Here we move on to consider ‘positive psychology’ for its influence on happiness economists like Layard, and society more broadly.


  1. It is difficult to pinpoint exactly when Layard’s nickname became so prevalent. One of the earliest references is in Jeffries (2008). UK Prime Minister Tony Blair began appointing special policy advisors in 1998, which led to the media nickname of ‘tsars’ (see Levitt and Solesbury 2012 on policy tsars).[]
  2. Layard 2006[]
  3. Bache and Reardon 2013[]
  4. Layard 2006, 3[][]
  5. Easterlin 1973, 1974[]
  6. Easterlin 2001[]
  7. most notably Stevenson and Wolfers 2008, 2012[]
  8. i.e. Easterlin et al. 2010[]
  9. i.e. Grimes and Reinhardt 2019[]
  10. e.g. see Adler 2013, 9; Alexandrova 2017, 4; Allin 2007, 47; Bache and Reardon 2013, 902; Benjamin et al. 2012, 18; Blanchflower 2008, 32[]
  11. Layard 2006, 5[][][]
  12. Layard 2006, 63; 255[]
  13. Crucially, causes of well-being and objective lists of well-being indicators are similar, but not the same. With the OECD example from Chap. 3, perception of safety of the local neighbourhood is a proxy indicator of well-being, but is not necessarily a primary cause. There is a conceptual difference between a condition indicating well-being and a cause of well-being.[]
  14. It may be helpful to know that index is a rare word that has two plurals, indices and indexes.[]
  15. Both Layard (2006) and Davies (2015) offer engaging commentaries on Bentham and his relationship to the Greatest Happiness principle that are worth referring to if this history interests you.[]
  16. Ryan 2021[]
  17. Oakley et al. 2013, 23[]
  18. While equality, diversity and inclusion are ostensibly the same agenda, and the words are used interchangeably, there are differences in the separate agendas.[]
  19. Veenhoven 2010, 606[]
  20. 2017)) short story The Ones Who Walk Away from Omelas features a thriving, joyful city whose prosperous existence depends on the extreme misery of a single child that lives in a dungeon.

    Another issue taken with the ‘Greatest Happiness principle’ emerges from questioning the value of happiness as a goal: is it too focussed on pleasure, or is it just an illusion? Some question whether happiness as a goal fosters irresponsible consumerism and that it makes us less sensitive to the suffering of others. In other words that ‘happiness maximisation’ leads people to pursue an idea of happiness that is fuelled by irresponsible consumption, or to do what makes them happy without considering the consequences. This never-ending pursuit of things ‘to make us happy’ is called ‘the hedonic treadmill6’ and never satisfies; people always want more happiness and have been encouraged to seek gratification in the wrong places, to the detriment of their well-being, social well-being and ecological well-being.

    You may think this sounds a culturally specific idea of happiness that applies to Western consumerism and you may recall the example from Chap. 2 which points to the dangers of assuming how people value things, comparing a TV to a photo album. You may also be thinking of criticisms of economists’ ideas of ‘preference satisfaction’ from Chap. 3, as well as those who disapprove of applying Western values, and valuation techniques to developing contexts, as we discussed was the case with the Human Development Index (HDI). You may also note that this idea of people as individual consumers seeking personal gratification is at odds with many societies that operate as collectives and, indeed, many of the values of societal well-being that the well-being agenda appeals to. These are not the only contradictions in the well-being agenda and we will continue to explore value judgements of what happiness is, and for who (especially if what we do, or are able to do is a driver of happiness) in further chapters.

    John Stuart Mill was Bentham’s godson and another key figure in the story of happiness and economics. He is said to have disagreed with the idea of general happiness as something universally experienced. He believed that happiness from a game of ‘pushpin’ was not comparable to that from poetry; that without the idea of higher and lower forms of happiness, we should have to believe that a dissatisfied Socrates was worse off than a satisfied fool ((Layard 2006, 22; 118[]

  21. Layard 2006, 7[]
  22. For a comprehensive engagement with how the logic of competition has bled into all aspects of everyday life, see Davies, W. 2014. The Limits of Neoliberalism: authority, sovereignty and the logic of competition. London: Sage.[]
  23. 2014[]
  24. See particularly Chapter 1.2 ‘Assessing the sustainable competitiveness of nations’.[]
  25. Will Davies describes the cherry picking in the well-being agenda succinctly in this 2015 interview, see Oman (2015b) https://theconversation.com/why-government-issued-well-being-may-not-make-ushappier-42153[]
  26. Layard 2006, 197[]
  27. 2002[]