Business ethics 88.
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A common theme of this column is the measurement of well-being. National output is commonly measured by Gross Domestic Product (GDP), but this measure captures only one part of our total welfare. It is only natural that strictly "economic" welfare should be of most interest to readers of the business section, but it is also appropriate that business people should have a meaningful perspective on the material contribution to overall welfare.
One interesting way of finding out how happy people are is to just ask them. While this column was a pioneer in discussing measures of welfare based on "subjective well being," these measures are gaining in popularity and prominence.
It's important to recognize that focusing on subjective well being doesn't in any way deny the importance of economic growth, because the level of material enjoyments has a profound impact on people's reported happiness.
Some scholars have suggested that this correlation is mostly an illusion. They claim that once a reasonable level of prosperity is reached, people with more income are really happier because of their increased social status, not because of their improved standard of living. If this is true, then the endless striving for economic advancement is no more than a rat race, a zero-sum game with no true progress.
My own research does not confirm this approach. I find that even among developed countries, life satisfaction shows a strong correlation with income level. Assuming people compare themselves to others in their own countries, this strongly suggests that "richer is better."
Even so, it's important to keep perspective. Non-economic factors have a profound contribution to well-being. I used the Israeli social survey to try and compare the impact of "love and money| on our inner glow. How much of our life satisfaction is explained by economic factors? How much by interpersonal ones?
The answer is, it's a close race. I examined the explanatory power of economic variables such as income, satisfaction with economic situation, satisfaction with one's apartment, etc. on life satisfaction. Afterwards I did the same thing with interpersonal variables - satisfaction with family life, with one's neighborhood, the impact of family structure and so on. Mathematically, this approach does not study how much each area contributes to total satisfaction, but rather how much each contributes to differences in satisfaction. If A seems happier than B, is that more likely to come from A's better economic circumstances or his greater enjoyment of human relations?
In my analysis, economic variables come out slightly ahead (25% vs 21%), but it is safe to say that the two have a comparable impact on the variability of well-being among Israelis. (If you throw in personal variables like health, the non-economic variables overall have more importance than the economic ones.)
Which brings us back to the subtitle of the article. It goes without saying that in our phone-crazy society, the Central Bureau of Statistics asked people how often they phone family members who don't live with them. Israelis are amazingly family-oriented; they call other family members on the average over twice a week, and this measure is highly correlated with overall satisfaction from family relations.
So if other articles in the business section can tell you how to feel better by increasing your income, my column gives you statistical evidence that you'll feel better if you call your mother. (She'll feel better too.)
The writer is research director at the business Ethics Center of Jerusalem (www.besr.org), an independent institute in t he Jerusalem College of Technology.
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