A very interesting post! Thanks for sharing.
I understand that the main objective of this post was to demonstrate a proof of concept and not to argue that the WELLBY approach should be used. If you are planning to do some work on the latter I would personally suggest looking closely at the literature around the suitability of using SWB scores in low-income settings. My understanding is that the consensus view amongst economists is that alternative approaches, such as the capability approach or multi-dimensional poverty indices, are preferable to SWB in such contexts. I should say that I’m currently fairly agnostic on this issue and could be swayed either way, which is why I would love to see a review and philosophical discussion of the literature. If HLI is looking to focus on LMICs, I personally think such a review would be important.
One of the main points of contention is that of “adaptive preferences”. The idea can probably be best be summed up in this quote by Amartya Sen:
The utilitarian calculus based on, say, happiness can be deeply unfair to those who are persistently deprived, such as the traditional underdogs in stratified societies, oppressed minorities in intolerant communities, precarious sharecroppers living in a world of uncertainty, sweated workers in exploitative industrial arrangements, subdued housewives in deeply sexist cultures. The hopelessly deprived people may lack the courage to desire any radical change and often tend to adjust their desires and expectations to what little they see as feasible. They train themselves to take pleasure in small mercies. The practical merit of such adjustments for people in chronically adverse positions is easy to understand: this is one way of making deprived lives bearable. But the adjustments also have the incidental effect of distorting the scale of utilities.
Sen, A. K. 2008. “The Economics of Happiness and Capability.” L. Bruni, F. Comim, and M. Pugno, eds., Capabilities and Happiness, 16–27. New York: Oxford University Press.
Of course you can bite the bullet and say that there is no morally significant difference between a highly deprived person who has adapted to their environment and rates themself at a 5, versus someone materially well off who also rates themselves at a 5. This doesn’t seem to me to be an obviously repugnant view to take, but it is something that I think should be discussed.
I should note that it isn’t immediately clear to me to what extent adaptation could be a problem for your analysis in this post. After all, your analysis around the doubling of consumption considers changes in life satisfaction as opposed to say comparing levels between the poor and rich world for the purposes of optimising resource allocation between them. In addition I did find it interesting in your WELLBYs lost from death analysis, that the happiness scores you cite for the LMIC world are pretty low, which might imply that such adaptation hasn’t occurred to a meaningful extent. Even so, I would say that using life satisfaction scores in a low-income context in the first place requires some acknowledgement of the literature that is critical of doing so. Also, when I saw that the IDinsight beneficiary survey estimated the neutral point at 0.56, whilst the UK study found it at 2⁄10, this flagged to me the possibility of some adaptive preferences at play.
I just want to reiterate that I’m not saying using SWB measures in LMICs is inappropriate, I just think it might be helpful to have greater scrutiny of doing so.
P.S. Apologies if all of the above was entirely obvious to you and you already have / are planning to look into this topic. Also apologies if I have exaggerated the potential scale of the issue—I’m not an expert when it comes to the economics of LMICs by any means. Having said that I can point you in the direction of some relevant reading if you’re interested in investigating further.
Hello Jack, thanks for the comment. As you note, the document doesn’t attempt to address the issues you raised. We’re particularly interested to have people engage with the details of how we’ve done the analysis, although we recognise this will be far too far much ‘in the weeds’ for most (even members of this august forum).
I’d like to reply to your comment though, seeing as you’ve made it. There are quite a few separate points you could be making and I’m not sure which you mean to press.
You wonder about the suitability of SWB scores in low-income settings and raise Sen’s adaptive preferences point.
One way to understand the adaptive preferences point is as an argument against hedonism: poor people are happy, but their lives aren’t going well, so happiness can’t be what matters. From this it would follow that SWB scores might not be a good measure of well-being anywhere, not just in low-income contexts. Two replies. First, I’m pretty sympathetic to hedonism: if people are happy, then I think their lives are going well. Considering adaptive preferences doesn’t pull me to revise that. Second, as an empirical aside, it’s not at all obvious that people do adapt to poverty: the IDInsight survey found the Kenyan villagers had life satisfaction of around 2⁄10. That’s much lower than life satisfaction on average in Kenya of around 4.5. A quick gander at the worldwide distribution of life satisfaction scores (https://ourworldindata.org/happiness-and-life-satisfaction) tells you the poorer people are less satisfied than richer ones. The story might be interestingly different for measures of happiness (sometimes called ‘affect balance’).
Another way to understand the force of adaptive preferences is about what we owe one another. Here the idea is that we should help poor people even if doing so doesn’t improve their well-being (whatever well-being is) - the further thought being that it won’t improve their well-being because they’ve adapted. I don’t find this plausible. If I can provide resources for A or B, but helping A will have no impact on their well-being, whereas B will have their well-being increased, I say we help B. (To pull out the intuition that adaptive preferences is really about normative commitments, note we might think it makes sense for people in unfavourable circumstances to change their views to increase their well-being, but that there’s something odious about not helping people because they’ve managed to adapt; it’s as if we’re punishing them for their ingenuity)
A different concern one might have is that those in low-income contexts use scales very differently from those elsewhere: someone who says there are 4⁄10 but lives in poverty actually has a very different set of psychological states from someone who says they are 4⁄10 in the UK. In this case, it is mistaken to take these numbers at face value. The response to this problem is to have a theory of how and why people differently interpret subjective scales so you can account for and adjust the score: e.g. determine what the true SWB values are on the same scale. This is one of the most important issues not adequately addressed by current research. I’ve got a (long) paper on this I’ve nearly finished. The very short answer is that I think the answers are (cardinally) comparable and this is because individuals try to answer subjective scales in the same way as everyone else in order to make themselves understood. On this basis, I think it’s reasonable to interpret SWB scores at face value.
Thanks for your response. Apologies that I chose to sidestep the actual analysis itself. For what it’s worth I was very impressed when I was reading through it. I might revisit at some point to see if there are any specific comments I can provide on the analysis.
There are quite a few separate points you could be making and I’m not sure which you mean to press.
Apologies if I wasn’t clear. The main point I want to press isn’t that I disagree with the use of SWB in LMIC analysis, it’s actually just to highlight that, to my knowledge, this isn’t the preferred approach of economists to analyse wellbeing in LMICs. Therefore if such analysis is going to feature heavily in HLI’s work I personally think it would be worth your while to address this tension formally in some way. This could be by doing a write-up to justify your choice to use SWB rather than say the capability approach or multi-dimensional poverty indices. If you address this formally I think it would increase the probability that the work of HLI is taken seriously by economists, and you may even win over some converts to your cause. If you don’t address this I have a feeling many economists (and perhaps some other people of interest) would ignore your work citing concerns over adaptive preferences.
Of course I’m not an expert so if I were you I’d test this with some academic economists. The director of The Oxford Poverty & Human Development Initiative, Sabina Alkire, is a leader in multidimensional poverty and the capability approach. She would be a brilliant person to talk to get a clearer sense of the current views of economists regarding the use of SWB in LMIC. It may well be the case that economists are more accepting of this approach than I realise.
A different concern one might have is that those in low-income contexts use scales very differently from those elsewhere: someone who says there are 4⁄10 but lives in poverty actually has a very different set of psychological states from someone who says they are 4⁄10 in the UK.
For what it’s worth I think that this might be the most prominent concern. I look forward to seeing your paper arguing for cardinal comparability. If your paper covers cardinal comparability between those in low-income and high-income contexts, then I think it would go some way to addressing the tension that I have raised.
Glad you were impressed! Would welcome any suggestions on how to improve the analysis.
Thanks for clarifying. Yes, I understand that economists lean towards a desire satisfaction theory of well-being and development economists lean towards Sen-style objective list theories. We’re in discussion with a development economist about whether and how to transform this into an article for a development econ journal, and there we expect to have to say a lot more about justifying the approach. That didn’t seem so necessary here: EAs tends to be quite sympathetic to hedonism and/or measuring well-being using SWB, and we’ve argued for that elsewhere, so we thought it more useful just to present the method.
Oh that’s great. I very much hope that goes well! I hope I didn’t give the wrong impression from my comments, I would love to see SWB be taken more seriously in the development economics literature.