David Blanchflower: Surprise, surprise: we're less happy under the Coalition

Economic Outlook: Individuals have a lower tendency to report themselves as happy as inequality rises

Our PM has made a big deal about developing measures of well-being or happiness, when he isn't putting his foot in his mouth about energy prices. The Office of National Statistics now has a website you can go to for details on how it intends to measure "the quality of life of people in the UK, environmental and sustainability issues, as well as the economic performance of the country"*. It goes on to say that "measuring national well-being will provide a more coherent measure of how the country is doing than standalone measures such as GDP".

It is well known, of course, that GDP hasn't grown for a long time. Four of the last five and five of the last seven quarters have been negative; not even half of the drop in output since the start of the recession in the second quarter of 2008 has been restored. So it would be good to look at other measures of the country's well-being: it turns out we have a lot of data to help us.

The ONS has made an initial start to its well-being programme by including four questions on happiness in one of its major surveys, the Annual Population Survey. The questions asked are: a) how satisfied are you with your life nowadays? b) to what extent do you feel that the things you do in your life are worthwhile? c) how happy did you feel yesterday? d) how anxious did you feel yesterday? Answers are coded on a scale from one to ten.

So what have they found? Most people are happy; more than half of respondents report scores from 8-10 on the happiness question, while fewer than 5 per cent report scores of 2 or less. Results are similar with life satisfaction and whether life is worthwhile. Just over 10 per cent of respondents report scores of eight or higher for being anxious.

I have taken a look at the micro data from David Cameron's study which confirms earlier studies showing that well-being is U-shaped in age, that is the young and the old are happiest, which means there is a mid-life crisis. This is true whichever of the four measures is used. It makes little difference what measure of happiness you use, and you get almost the flip image of happiness when you look at unhappiness. As you would expect, unhappiness, including being anxious, has an inverse U-shape in age; there is evidence of a similar U-shape in taking antidepressants or seeing a psychiatrist or psychologist. Unemployment makes people very unhappy; the reserve army of the unemployed is a conscript army, not a volunteer army. Being unemployed is horrid. Married people are happier than single people as well as people who live together. More educated people are happier than the least educated, and money does buy happiness. Women are happier than men, but the gap is narrowing over time – as it is in the health and life-expectancy data, as women spend more time in the workplace.

Money buys happiness. But life events give a lot of happiness, such that it takes a lot of money to compensate for a loss of happiness, eg from marriage or unemployment, say. Relative things do matter, as people compare themselves to others. Individuals have a lower tendency to report themselves as happy as inequality rises.

In new work with Andrew Oswald and Sarah Stewart-Brown of the University of Warwick, we have found that diet and exercise have major impacts on well-being in the UK.** We find evidence of a link between the consumption of fruit and vegetables and high well-being. Well-being peaks at approximately seven portions per day. The pattern is robust to adjustment for a large number of demographic, social and economic variables. People who exercise a lot are happier.

The Eurobarometer survey series has been running for many years in every EU country. The raw data on individuals are made available to researchers to examine within a year or so of being collected. Data are available on life satisfaction every year since 1973. Respondents are asked: "On the whole, are you very satisfied (=4), fairly satisfied (=3), not very satisfied (=2) or not at all satisfied (=1) with the life you lead? There is a consistent pattern in these data showing that the Nordic countries are the happiest and the East Europeans the least happy; the onset of high unemployment in several countries has hit their happiness levels hard. The first chart plots happiness scores from the most recently available Eurobarometer survey conducted in November 2011, which shows that the happiest European country is Denmark. The UK ranks seventh, and the least happy country is Greece. Happy countries have lower levels of inequality, along with low unemployment and inflation, high levels of democracy and democratic participation, as well as strong welfare states and high levels of public spending, so cuts in public spending are likely to lower happiness. There is growing evidence also that increases in unemployment have much larger negative impacts on happiness than do equivalent increases in inflation. So southern European countries most impacted by rising unemployment, such as Spain and Greece, have recently seen marked declines in happiness.

The second chart plots yearly averages for the UK from the Eurobarometers. One big finding is that life satisfaction remained broadly flat – with quite a lot of variation and noise in the data from the early 1970s through the end of the 1990s. Happiness then rose sharply under the Labour government from 1997-2007 and took a hit in 2008 as the financial crisis hit. As the economy grew under the Darling boom of 2009, happiness recovered again, as the chart makes clear, only to collapse in 2011 under the Coalition.

So the conclusion from this work is that Cameron, Osborne and Clegg have made the country less happy. So both GDP and happiness are down under the Coalition. Now that's a surprise.

* www.ons.gov.uk/ons/guide-method/user-guidance/well-being/index.html

** Is psychological well-being linked to the consumption of fruit and vegetables?, Social Indicators Research (forthcoming)