1. ‘Happy Policies’: Achieving Happiness through Policy Implementation
Introduction
There has been extensive academic research within the fields of psychology and
economics in trying to establish if, and how, the subjective feeling of happiness, (also
referred to as well-being and life satisfaction) can be measured. Empirical evidence
and theoretical study has formed considerable conjecture on what causes one to feel
happy, and, maybe more significantly, what causes a sense of unhappiness. This
insight has prompted much speculation as to whether or not politicians should
attempt to optimise happiness as the strategic goal of certain policy implementation,
as opposed to more one-dimensional and quantifiable targets such as economic
growth.
This paper analyses varying factors that make the concept of increasing happiness
through policy implementation, an implausible one. Research by various scholars will
be drawn upon within two defined sections. Section one will focus on the problematic
modelling of how policymakers may define happiness, referring to the ‘Easterlin
Paradox’ (1974, 1995, 2009), Sen’s ‘capability approach’ (1985), and the ‘utility
function’ supported by Frey and Stutzer (2002) as starting points. Section two will
explore the methodologies that have been incorporated to measure happiness and
why these could be determined unreliable for policymakers to use as guidelines. This
will include analysis regarding the level of ambiguity in available data, acknowledging
the ‘focusing illusion’, as hypothesised by Kahneman et.al (2006). In addition the
confusion of causality between factors (Helliwell 2003; Frey & Stutzer 2002), that
could negatively affect the policymaker’s judgement and result in questions over
morality, democracy and paternalism, (Johns and Ormerod 2007) is also examined.
To conclude, a summary of the key points will substantiate why, in their own self-
interests and of those they serve, policymakers should avoid focusing on increasing
happiness as their main strategic goal.

2. What is ‘happiness’ ‘well-being’ ‘life satisfaction’?
It seems obvious to suggest that a government should consider what ‘happiness’
may mean to those governed before it attempts to increase their ‘well-being’ through
certain policy implementation. What defines and encompasses ‘life satisfaction’ is a
broad topic of discussion, one that is beyond the scope of this analysis. However, it
is the vagueness in being able to define what happiness is, that remains one of the
fundamental problems in implementing a successful ‘happiness focused’ policy.
It is still commonly ‘believed’ that an individual’s well-being lies in the things that they
do not yet have but could acquire in the future (Gibert 2006), examples including
one’s level of income (Kahneman et.al 2006) or utility (Frey & Stutzer 2004), and the
assumption that happiness levels will increase as income or utility rises. Various
studies have observed what does or does not determine one’s well-being, with the
explicit conclusion that the factor of income growth does not. Easterlin’s research
(1974, 1995, 2009), in particular, is perceived as pioneering in validating this claim.
In conducting several cross country analyses of multiple data, he observed that there
is no long term correlation between income growth and levels of happiness, thus
dismissing the notion that individuals are more satisfied the more money they have.
Additional empirical research within the USA by Kahneman et.al (2006) further
substantiates this theory, stating that after an income threshold of $50,000 is
surpassed, there is no significant increase in an individual’s level of happiness
(ibid.3). Other research, regarding social comparisons, by Layard (2005, 2006) has
revealed the paradox that a rise in income for the individual can cause unhappiness
among those around them and with everyone striving for higher levels of income,
they effectively engage in a ‘race’ to unhappiness.
Diverting away from income, Frey and Stutzer (2002) acknowledge the work of
various psychologists in identifying ‘utility’ as a way of defining happiness. They
proposed the possibility of assessing one’s level of utility (and thus well-being)
through a single or series of questions through representative surveys. They argue
that collecting data related to various other aspects of life that contribute toward
one’s level of happiness, can further support analysis of the ‘Easterlin Paradox’ as
well as research carried out by Myers and Deiner (1995). Their study evidences that
a higher average Gross Domestic Product (GDP) within a country correlates to a

3. higher level of well-being (ibid:13). However, it is noted that although the level of
well-being (utility) increases as income levels rise, it does so at diminishing rates and
only up to a certain amount. This observation supports the theory that it is the gain in
utility that an individual experiences from increased income that affects well-being,
not the level of income itself. Others argue that the level of utility itself increases at
diminishing rates regardless of income levels (Frey & Stutzer 2004). Myers and
Diener continue their argument stating that the well-being of any individual is
attached to the “…positive thoughts and feelings about one's life.” (ibid:12). In this
context, one’s life does not exclusively relate to oneself, a subject explored by Sen
(1985) in his functioning and capability research. Here, Sen identifies the need for
individuals to be endowed with the capabilities that enable them to function in a
given society. He theorises, that one’s sense of well-being increases through
functioning within society and the external benefits that this ‘mobility’ entails. Sen
exemplifies how his framework could assist policy makers in identifying ways in
which to increase well-being, albeit with difficulty (ibid:31).
The above ‘definitions’ of and ‘contributions’ to happiness illustrate the difficulties
governments face when trying to increase well-being of any target group. If
policymakers are unable to identify what happiness is, then is it possible for them to
increase it through policy implementation? Given the varying theories surrounding
the construction of well-being, it is unlikely that a particular policy that suits all or
most needs and desires exists.
Measuring Happiness: An improbable Task
"You cannot capture happiness on a spreadsheet any more than you can bottle it -
and if anyone was trying to reduce the whole spectrum of human happiness into one
snapshot statistic I would be the first to roll my eyes”
David Cameron (2010)
It is recommended (Frey & Stutzer 2002:1) that a nation’s progress should be
measured using more diverse indicators, such as well-being, alongside more
traditional economic factors such as GDP per capita, which has been identified as a
contributor to human happiness rather than the exclusive driver of happiness. A

4. concept supported by Layard (2006:8), stating that further consideration should be
given toward the measurement of well-being when implementing policy using a
traditional economic framework. Although the aforementioned suggestions are valid,
identifying the need for life satisfaction to be measured does not resolve the far more
problematic and contested matter of initiating reliable methods in which to do so.
There have been several academic and politically motivated approaches to
measuring happiness, but the most commonly used is by asking subjects:
“All things considered, how satisfied are you with your life as a whole these days?” or
“Taken all together, would you say that you are (3) very happy, (2) pretty happy, or
(1) not too happy?”
(Kahneman et.al 2006:1)
This method is highly unreliable in trying to ascertain an individual’s level of
happiness for varying reasons. Firstly, the scale (1-3) over simplifies the extremely
complex state of well-being and does not examine factors associated with
demographics, personality, economics and politics (Frey & Stutzer 2002); all of
which can play a key role in determining an individuals level of happiness. Without
consideration being given to these independent factors, policymakers are unlikely to
attend to the needs of wide sectors of society.
Previous research has indicated that age, sex, race and income (past a certain point)
does not significantly determine levels of well-being; whereas individualities such as
close supportive relationships, positively interpreted culture, job satisfaction, and
social support through faith networks are more closely linked to individual well-being
(Myers & Diener 1995). The complexity of happiness and how it is affected by so
many personal traits makes it extremely difficult for government to survey and
quantify, especially in highly diverse, multinational, multicultural and multi-faith
societies. Moreover, a problem with regards to flexibility and potential transition
between each state of happiness arises with the aforementioned three point scale.
The data shows an average score of ‘2.2’, implying that a certain percentage of
people must be ‘very happy’. Therefore, if their level of happiness increases, it will
not be represented by the data (Johns & Ormerod 2006:17). This poses the question

5. of whether policy should only target those who deem themselves unhappy, which, in
turn, could impact negatively on the well-being of those who are happiest and as a
result lower the well-being of society as a whole.
The all-encompassing three point scale mentioned previously has been noted to be
an unsatisfactory method of measuring happiness. Further data is available (OECD
2006; Helliwell 2003) looking at distinguishable factors measured against happiness
to determine what influences one’s level of well-being. Variables including marriage,
age, gender and employment are all considered by Helliwell, who concludes that
there are a number of individual and societal elements such as social capital, health
and education that can impact on individual well-being. Although he is able to explain
a substantial amount of variance in happiness levels across fifty countries using just
six variables (Layard 2006), Helliwell does not claim to provide conclusive enough
evidence that could support the implementation of public policy. He is justified in
remaining cautious as many other considerations exist that could distort his data,
one of them being the matter of causality.
It has been mentioned that well-being cannot be judged against an array of
independent variables that are believed to determine one’s level of happiness. This
is due to a lack of clarity as to which of those are independent and dependent of one
another (Diener et.al 1999). Does better health equate to more happiness or is it the
healthy active lifestyle that you lead or the social interaction you enjoy within that
lifestyle choice that induces happiness? Another example could be marriage; does
marriage create happiness or does the fact that you are happy make you a more
desirable person to marry and mitigate the chance of divorce? (Frey & Stutzer
2002:4; Johns & Ormerod 2006:24). It is important to identify the backward linkages
between individual factors before judging which policy may best increase happiness,
although to do so is highly improbable. From a psychological perspective, a
fundamental problem of measuring happiness is caused by the fact that individuals
themselves, are unable to correctly identify how they feel, captured by the concept
‘focusing illusion’.
“Nothing in life is quite as important as you think it is while you are thinking about it.”
Schkade and Kahneman, 1998

6. The ‘focusing illusion’ is a term discussed in depth by (Kahneman & Schkade 1998;
Kahneman et.al 2006), describing how an individual, when posed with a subject, will
give unbalanced and exaggerated attention to a particular aspect of that subject,
compared to other (often equally) defining aspects to arrive at their conclusion – thus
impairing their overall judgement. This ‘illusion’ is assumed to take course when
people are asked about their level of well-being, focusing on extremes as opposed to
more general aspects that contribute to life satisfaction. This poses problems for
governments trying to ascertain which policies may increase levels of happiness.
The first relates to the individual not being able to rationally identify what makes
them happy, thus weakening the reliability of the data collected (Kahneman &
Schkade 1998; Kahneman et.al 2006; Johns & Ormerod 2007). The second
complication is with regards to policy makers who, they themselves, may be affected
by the focusing illusion. They could direct attention to sectors of society that the
government believe to be in need of a ‘happiness boost’ based upon unreliable data
and their own pre-conceived ideas about how these people ‘must’ feel. They may
implement policy that targets reducing the ‘unhappiness’ of society, when those
problems have originally been over emphasised, and in being resolved do not raise
societies level of happiness and, in some cases, may even lower it.
At this point, Sen’s capability approach is reinforced with the example of an
individual that is suffering from a lack of nourishment (Sen 1985:31). Policy may be
introduced to support this individual to overcome their hunger; however, that
individual may hold more importance to something other than their hunger.
Therefore, the individual’s well-being in the eyes of the policymaker may have been
increased, but in reality, the reverse has occurred. This theory is supported by
Layard (2006) best described by the following quotation:
“At present our policies are based far too much on policy-makers judgements about
how they would feel in a given situation, rather than detailed studies of how people
actually feel.”
(Layard, 2006:6)
Conversely, a policymaker may be able to use the focusing illusion to their benefit by
suggesting a policy is vitally necessary, exaggerating the truth and misleading the

7. public to believe that its introduction will have a significant positive impact on their
well-being when it may actually prove to be detrimental to happiness levels amongst
society (Kahneman & Schkade 1998). This could cause much public discontent,
being deemed immoral, undemocratic, paternalistic having “…taken empiricism in
public policymaking to an extreme level” (Johns & Ormerod 2007:36).
Conclusion
This paper has considered the problematic concept of implementing policy to
increase happiness of a particular target group. Several complications regarding how
to define well-being have been analysed. It has been highlighted that although
income is key to a certain level of happiness, its role is less impacting as it increases
beyond a certain threshold. An optimal level of utility or capability and functioning
has also been suggested as what defines one’s level of well-being, argued to be
measureable by a series of questions in survey format. However, the process of
which government is expected to identify and measure these factors is problematic.
Noted problems include psychological factors such as the focusing illusion that can
distort data and mislead policymakers into creating policies based on their own,
misinformed judgement which, in turn, could lead to public discontent. Data is also
unreliable due to the disputable notion that people have difficulty in categorising what
induces happiness in their lives due to irrational thinking and social comparisons. In
addition it is improbable to ascertain the causality between variables due to the
complex set of linkages that exist in the construction of one’s well-being.
Therefore it is reasonable to suggest that although happiness is the goal of all
individuals and one that should be considered by politicians when implementing
policies, enhancing happiness should not be the sole focus of a government, nor the
main determinant behind policy implementation in place of other more quantifiable
determiners such as economic growth. This judgement is based upon the interests of
both the general public and those of the political party itself.
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