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A simple statistical method for measuring how life events affect happiness

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Clark, Andrew E. and Oswald, Andrew J. . (2002) A simple statistical method for measuring how life events affect happiness. International Journal of Epidemiology, Vol.31 (No.6). pp. 1139-1144. ISSN 0300-5771

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Official URL: http://dx.doi.org/10.1093/ije/31.6.1139

Abstract

Background Life events—like illness, marriage, or unemployment—have important effects on people. But there is no accepted way to measure the different sizes of these events upon human happiness and psychological health. By using happiness regression equations, economists have recently developed a method. Methods We estimate happiness regressions using large random samples of individuals. The relative coefficients of income and life events on happiness allow us to calculate a monetary ‘compensating amount’ for each kind of life event. Results The paper calculates the impact of different life events upon human well-being. Getting married, for instance, is calculated to bring each year the same amount of happiness, on average, as having an extra £70 000 of income per annum. The psychological costs of losing a job greatly exceed those from the pure drop in income. Health is hugely important to happiness. Widowhood brings a degree of unhappiness that would take, on average, an extra £170 000 per annum to offset. Well-being regressions also allow us to assess one of the oldest conjectures in social science—that well-being depends not just on absolute things but inherently on comparisons with other people. We find evidence for comparison effects. Conclusion We believe that the new statistical method has many applications. In principle, it can be used to value any kind of event in life.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Happiness
Journal or Publication Title:	International Journal of Epidemiology
Publisher:	Oxford University Press
ISSN:	0300-5771
Date:	2002
Volume:	Vol.31
Number:	No.6
Page Range:	pp. 1139-1144
Identification Number:	10.1093/ije/31.6.1139
Status:	Peer Reviewed
Access rights to Published version:	Restricted or Subscription Access
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URI:	http://wrap.warwick.ac.uk/id/eprint/343