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There are two main routes to happiness, one linked with modernization and another with traditional belief systems. In so far as modernization brings greater income, and political and personal freedom, it is conducive to rising subjective well-being — and in recent decades, it has actually made people happier. Economic development helps but its impact follows a curve of diminishing returns and rising social tolerance and political freedom played even more important roles in the global rise of subjective well-being that occurred from 1981 to 2007. Belief systems also shape subjective well-being, and religion has traditionally helped offset the effect of poverty. Thus, within most countries religious people are happier than non-religious people, although they tend to have lower incomes. And cross-nationally, the people of strongly religious low-income countries are substantially happier than the people of less religious low-income countries. Ideologies also help shape subjective well-being. Today, the publics of most ex-communist countries show weak or negative correlations between religion and subjective well-being. This seems to reflect a recent influx of unhappy people, who have turned to religion following the collapse of faith in communist ideology, which once provided a sense of meaning and certainty for many people.

This chapter examines the potentially best fitting cognitive and affective positive capacities for being included in the future. Specifically, cognitively-oriented creativity and wisdom, and the affective, emotionally-oriented positive strengths of subjective well-being, flow, and humor are selected. Each of these potential psychological capital (PsyCap) capacities is analyzed in terms of the criteria of valid measurement, development, and performance impact. Except for empirically demonstrating performance impact in the workplace, these are judged to generally meet the PsyCap inclusion criteria. The concluding section notes some needed future research for these cognitive and affective positive capacities to more fully meet the PsyCap criteria.

Based on point-of-time comparisons of happiness in richer and poorer countries, it is commonly asserted that economic growth will have a significant positive impact on happiness in poorer countries, if not richer. The time trends of subjective well-being (SWB) in thirteen developing countries, however, are not significantly related to predictions derived from the cross sectional relation of happiness to GDP per capita. The point-of-time comparison leads to the expectation that the same absolute increase in GDP per capita will have a bigger impact on SWB in a poorer than a richer country. In fact there is no significant relation between actual trends in SWB and those predicted from the cross sectional relationship. Nor is a higher percentage rate of growth in GDP per capita significantly positively associated with a greater improvement in SWB. In the developing countries studied here a greater increase in happiness does not accompany more rapid economic growth. These conclusions hold true for two measures of SWB that are separately analyzed, overall life satisfaction and satisfaction with finances. The two SWB measures themselves, however, typically trend similarly within a country, providing mutually supporting evidence of the trend in well-being.

This chapter examines and presents the influence of social context on subjective well-being. Based on related research and literature, subjective well-being is affected by genetics, personality, physical health, and social factors. The chapter focuses on the latter, specifically on the direct effects of a person's social circumstances on one's subjective well-being. Social factors identified include relative wealth, marital status, race, education, employment, age, and social capital, which is a term applied to the powerful effect of social networks and human capital on the levels and efficiency of production and well-being. Prior to the discussion of the findings, a section is devoted to several methodological stumbling blocks encountered during the course of the study. The evidence gathered supports the claim that social capital is strongly correlated with subjective well-being through many channels and forms, such as marriage and family, ties to friends and neighbours, workplace ties, civic engagements, and trustworthiness.

This chapter reviews the various definitions of well-being, and their advantages and disadvantages. Well-being is defined as an overall evaluation that an individual makes of his or her life in all its important aspects, and is often called “subjective well-being.” This definition is contrasted with objective evaluations, which require judgments that are independent of an individual’s values and desires. The definition of well-being advanced in this book is based on an individual’s own interests, needs, preferences, and desires, and is therefore similar to the concept of “utility” in economics. The well-being indicators advocated here include both people’s judgments of their lives and their emotions and moods. The differences in preference realization reflected in economic indicators and subjective reports of well-being are described, and the advantages and disadvantages of each are reviewed.

Evidence is presented that measures of subjective well-being vary along a dimension anchored at the two ends by evaluative judgments of life and experienced affect. A debate in recent decades has been focused on whether rising income increases the experience of well-being. This chapter found that Judgment is more strongly associated with income, and with long-term changes of national income. Measures of feelings showed lower correlations with income in cross-sectional analyses, and lower associations with long-term rising income. Furthermore, income showed very similar regression lines with the judgment of life at the two times of the surveys, suggesting that a common standard was used. Measures of concepts such as “Happiness” and “Life Satisfaction” appear to be saturated with varying mixtures of judgment and affect, and this is reflected in the degree to which they correlate with income. This chapter's findings are relevant to Easterlin’s hypotheses about income and well-being. Income and income change were associated with judgments of life and national increases in them, whereas the associations of income and feelings were less robust.

This chapter uses data from the Gallup World Poll and from the Demographic and Health Surveys to investigate how subjective well-being (SWB) is affected by mortality in sub-Saharan Africa, including mortality from HIV/AIDS. The Gallup data provide direct evidence on Africans’ own emotional and evaluative responses to high levels of infection and of mortality. By comparing the effect of mortality on SWB with the effect of income on SWB, monetary values can attached to mortality to illuminate the often controversial question of how to value life in Africa. Large fractions of the respondents in the World Poll report the mortality of an immediate family member in the last twelve months, with malaria typically more important than AIDS, and deaths of women in childbirth more important than deaths from AIDS in many countries. A life evaluation measure (Cantril’s ladder of life) is relatively insensitive to the deaths of immediate family, which suggests a low value of life. There are much larger effects on experiential measures, such as sadness and depression, which suggest much larger values of life. It is not clear whether either of these results is correct, yet the results here demonstrate that experiential and evaluative measures are not the same thing, and that they cannot be used interchangeably as measures of “happiness” in welfare economics.

Each of the four chapters of Part I of the book synthesizes one aspect that must be specified in the operationalization of the capability approach, then proposes a framework for doing so. The issue of this second chapter is how one ‘specifies’ the dimensions of valuable functioning or capability. Martha Nussbaum's work on central human capabilities and John Finnis's work on basic human reasons for action are both presented, and then alternative accounts of universal human needs and values are briefly considered. The theoretical conception of basic human values that has been developed by Finnis is proposed as being a conception that enables and requires participatory dialogue in application, has objective foundations, and can also coherently engage with and be refined by the large and growing empirical literatures on happiness, subjective well‐being, quality of life indicators, and views of the poor—which have not been well‐integrated with poverty reduction approaches. This conception can also mesh well with methodological literatures on participation, and be used by persons with diverse philosophical approaches and opinions. Ends with a table listing the dimensions of human development from 39 different disciplines.

This chapter examines the impact of the economic crisis on subjective well-being. The influence of the economic downturn is measured using current and past unemployment, partner’s unemployment, financial strain and deterioration in household economic circumstances. All are associated with lower life satisfaction. Financial strain accounts for almost half of the lower life satisfaction of the unemployed and all of the reduced life satisfaction of their partners. Social integration is lower among the unemployed but explains only a small part of the deficit in satisfaction. The relationship between unemployment and satisfaction varies little by welfare regime except that in the Southern regime there is a much smaller gap in the life satisfaction of the employed and the unemployed. We find that the overall level of unemployment makes little difference to how damaging unemployment is for people’s well-being. It is the personal experience of economic crisis such as unemployment, financial strain and insecurity that is critical for well-being rather than the person’s relative position compared to others in the wider society.

Although a disproportionate number of measures are used to assess the objective conditions of societies through social indicators, and ignore subjective well-being, there has been some progress in implementing subjective surveys of well-being. The chapter reviews instances where well-being is tracked on a broad basis. For example, the German Socio-Economic Panel Study assesses life satisfaction for a large and representative panel of Germans on an annual basis, as well as many other factors. Similar surveys in Australia and the United Kingdom reveal the potential implications that the initial attempts at assessing societal well-being can have for policy questions. The well-being measures allow a more in-depth understanding of how factors such as income and crime influence quality of life. The limitations of the existing surveys are reviewed, and recommendations for creating more sophisticated national accounts of well-being are advanced.

Happiness is loving one’s life, valuing it in ways manifested by ample enjoyment and a robust sense of meaning. This definition is in tune with predominant contemporary concepts of happiness as subjective, that is, as defined primarily in terms of emotions, attitudes, and other subjective states; yet it also makes reference to lives as unfolded as narrative histories in the world. Unlike normative definitions that stipulate that happiness centers on virtuous living, subjective definitions allow that we might be very happy but not very moral; indeed, there might be contented crooks, satisfied sociopaths, and even a happy Hitler. Nevertheless, happiness is one vital aspect of fully worthwhile lives, and it interacts in complex ways with other aspects, including moral decency, authenticity, mental health, self-fulfillment, and meaning in terms of justified values.

This chapter examines the relationship between disability and subjective well-being. The findings show that having a work-limiting disability is associated with lower levels of self-reported life satisfaction and subjective well-being. Although the effect is mitigated somewhat by employment, income, and wealth, it remains a salient determinant of differences in subjective well-being between those with and without disabilities.

This chapter investigates how subjective well-being is influenced by well-being in relation to different domains. It focuses on emotional and mental health. Additionally, the sources of data on children's subjective well-being are presented. The chapter then outlines the trends and prevalence of mental illness among children and young people in the UK, drawing mainly on findings from the Office for National Statistics (ONS) Mental Health of Children and Young People Survey reports for 1999, 2004 and 2007. Discussion of factors associated with the onset and persistence of mental health problems are provided. It further addresses suicide among children and young people, its prevalence in the UK and time trends in 15 European countries. There is good evidence that mental ill health is more common among children in families with lower incomes living in poverty than elsewhere. There is some very slight evidence that subjective well-being is also associated with socioeconomic status.

The field of positive psychology is a relatively recent addition to the research agenda of Indian psychologists. This chapter comprehensively examines the themes pursued in this field. It begins with an overview of the Indigenous Indian thought in terms of the insights it offers for positive psychology. Research studies on meanings and sources of happiness and interventions for the promotion of well-being are analysed. Key challenges to the growth of positive psychology are identified and a general framework for research is offered. In particular, attention is drawn towards the nature of research questions, scope for cultural contributions, nuances of research designs and expansion of the methodological repertoire. As the thoughts and intentions are coloured with the hues of emotions and get reflected in language, psychologists have to be sensitive to the linguistic diversity and nuances of verbal expressions across different regions of India.

This chapter examines whether lasting reductions in earnings and wealth due to job loss have consequences on well-being beyond financial concerns. In particular, the analysis uses data from the Health and Retirement Study (HRS) to examine the impact of job loss on two different measures of self-reported psychological well-being, one meant to capture life satisfaction and another that gauges a person's sense of purpose in life. The research indicates that job loss, independent of a variety of background factors, reduces satisfaction by roughly 25 to 50 percent and that self-assessments by individuals of their purpose in life also typically declines by roughly 15 percent. This work suggests that job loss takes a toll on the nonfinancial as well as the financial well-being of individuals.

This chapter analyzes the ethical underpinnings of subjective well-being indicators, their connections to psychological and philosophical background theories, their relation to economic concepts, and also the empirical strategies for possible improvements. It argues that happiness scores cannot be expected to reflect people’s values and goals in life directly, although they can provide useful information if properly handled. The chapter is organized as follows. Section 5.1 reviews the main arguments from the happiness literature in favor of shifting the focus from material to subjective aspects of well-being and relates them to the classical debate on welfarism. Section 5.2 proposes a theory of subjective well-being as it appears in questionnaires, in relation to the standard concepts of utility and preference orderings that economists are familiar with, but also taking account of perspectives and insights from psychology. Section 5.3 examines how the collection of data could be improved and how such data can be used for the empirical application of different conceptions of well-being.

Recent developments in literature regarding mental health show a shift from disorder and dysfunction to concepts of well-being and positive health. This chapter recounts existing knowledge on the factors that determine positive mental health and the potential benefits of this information for improving the mental health of individuals and entire populations. The opening section examines the individual differences in happiness or subjective well-being and focuses on the concept of a set point for happiness. The chapter challenges the traditional view that this set point is genetically determined and unalterable through the use of life-course research, as opposed to a cross-sectional approach. A section is devoted to exploring the benefits of this knowledge to develop interventions that alter the set point, external circumstances, and even attitudes and behaviours. The chapter concludes with a discussion on the broader impact of this knowledge from single individuals to entire populations.

This chapter deals with the implications of studies on subjective well-being in the fields of psychology, health, and social sciences. The knowledge derived from such studies enabled the creation of more relevant and effective interventions and social policies that prevent rather than just treat problems. The chapter opens with a discussion on the methodologies used and the subjects selected for study. The research deals primarily with disabled people and street children. The factors relevant to psychological studies on subjective well-being include subjective experience and social context. Notions of psychological selection and optimal experience are discussed in relation to well-being and social welfare. The subsequent sections discuss optimal experience in relation to the subjective experience of disablement and the stereotypes concerning street children. The final sections explore options for more effective intervention programs and social policies for these groups of people.