The East-Asian Happiness Gap: Speculating on Causes and Implications*

YEW-KWANG NG

Abstract

Despite spectacular economic growth, most East Asian countries (especially those with the Confucian cultures) score very low in happiness surveys. This paper speculates on the reasons for this East-Asian happiness gap, including environmental disruption, excessive competitiveness, repressive education, excessive conformity, negative attitudes towards enjoyment, and the emphasis on outward appearance. Implications on the desired direction of future growth especially regarding the relative importance of public spending on the environment and research and the non-material aspects of life are also briefly touched on.

Keywords: Asia, environment, growth, happiness, public spending, quality-of-life.

1. INTRODUCTION

Asia, especially East Asia, has been growing rapidly despite the financial storm over 1997-98. I confidently said then that the RMB had no reason to depreciate and that East Asia will resume its rapid growth soon. (Keynote speeches at Conferences at Open University of Hong Kong, January 1998 and at University of Macau, March 1998.) I continue to hold such optimistic views. I also continue to believe that the Aussie, the Chinese, and the Malaysian dollars will all appreciate against the US dollar in terms of real exchange rates (nominal adjusted for differentials in inflation rates) in the medium to long terms, without ruling out short-term fluctuations. (I said that in 1993 regarding the RMB, which has appreciated much in real terms since. However, I did not make any money.) These predictions are based mainly on the relative purchasing power parity comparisons and the future growth prospects.

The East-Asian countries/regions referred to here includes Mainland China, Hong Kong, Taiwan, Korea, Japan, and Singapore. To some extent, it probably also applies to Malaysia and Vietnam, but not much to the Philippines (which has high happiness score), Thailand, and Indonesia (which is still beset with economic difficulties).

While East Asia (with the major exception of Japan in the last decade and the temporary slip around 1998 for the crisis-affected countries) has done extremely well economically, it has not done well at all in terms of the ultimate objective of life – happiness. In fact, a recent international comparison (Cummins 1998) puts East Asians as the very lowest group of countries. This should make us pause to reflect on some fundamental issues like the ultimate ends, the worth, and the costs of economic growth; the reasons for the relative failure of the East Asians in achieving happiness despite their economic success; the implications on ways to increase happiness and for public policies. Due to the unevenness of the level of economic progress, this paper is more relevant for the more developed parts of East Asia. (On the precise meaning of happiness, the argument that it is the appropriate ultimate objective, and related issues, see Ng 2000b.)

With the rapid growth in East Asia, researchers have discussed the effects of Confucianism on economic growth. However, the East-Asian happiness gap and its possible relation to the Confucian cultures have been largely neglected. I am quite aware that this is a sensitive area. I also do not have enough expertise in the area to give a scholarly discussion. However, since happiness is the most important and the ultimate objective in life, it is important to discuss this in the open so that perhaps suitable remedies may be forthcoming if more people become interested.

This paper may have touched on some sensitive issues. However, I am myself an East-Asian by birth, education, and culture. Thus, I hope that the paper will be taken as a self-examination aiming at improvement rather than as a criticism by an outsider.

2. THE FAILURE OF HIGH INCOMES TO INCREASE HAPPINESS AND THE EAST-ASIAN HAPPINESS GAP

Happiness is difficult to measure and compare interpersonally. Many economists are sceptical of the reliability of the measures of happiness that are largely based on self assessment. However, since happiness is the ultimate objective of life, it is extremely important. It is better to know roughly about something important than to have precise measurement of something irrelevant. (The square roots of the last 4 digits of people’s bank account numbers can be precisely measured and compared but are meaningless.) Happiness is cardinally measurable, at least conceptually (Ng 1997). A practical method has also been developed and used to measure happiness cardinally and interpersonally comparably (Ng 1996a). Though most existing measures of happiness have some problems with their comparability, they are not completely useless. Different researchers come up with largely consistent results (Fordyce 1988), which also correlate well with the frequency of smiling (Pavot 1991), with the reports of friends and family members (Diener 1984), with recalls of positive versus negative life events (Seidlitz, Wyer & Diener 1997), with physical measures like heart rate and blood pressure measures (Shedler, Mayman & Manis 1993), and with EEG measures of prefrontal brain activity (Sutton & Davidson 1997). If one wants to be pedantic in insisting on perfect accuracy, even the measurement of GDP is open to query on its accuracy and comparability.

Studies by psychologists, sociologists, and a small but increasing number of economists show that, both within a country and across nations, the happiness level of people increases with the income level, but only slightly. For example, using regional and cultural classifications, the Northern European countries with high incomes score top on happiness, followed by the group of English-speaking US, UK, Australia, and Ireland. Central and South-American countries including Brazil come next, followed by the Middle East, the Central European, Southern and Eastern European (Greece, Russia, Turkey, and Yugoslavia), the Indian Sub-continent, and Africa which does not, however, come last. Southern and Western European (France, Italy, and Spain) score significantly lower than Africa. And the last group is East Asia (including Japan, the country that leads in income, Korea and China). Singapore has an income (per capita) level 82.4 times that of India. Even in terms of purchasing power parity instead of using exchange rate, Singapore is still 16.4 time higher than India in income. However, the happiness scores of both countries are the same, both significantly higher than that of Japan. (See Cummins 1998. Cf. Diener & Suh 1999; Inglehart et al. 1998, Table V18. The frustration from high expectation from the transition makes many former Soviet countries having very low happiness scores in the last few years.)

The low ranking of East Asian countries in happiness is consistent with some other measures. For example, according to the survey of 18 thousand adults in 27 countries and regions by Durex reported in the mass media world-wide on 17-18 October 2000, Japan also has the lowest average number of sex over a year, 37, far behind the second lowest (Malaysia) of 62 and the low figures for other East-Asian regions (China 69, Taiwan 78, Hong Kong 84). In comparison, the overall average of 96 is exceeded by, among others, India (95), Brazil (113) and U.S. (132, the top figure). (Document available at http://library.northernlight.com/FB20001017290000041.html.) For another example, according to a measure of life satisfaction, East-Asian regions score rather low (China 4.00, Korea 4.98, Hong Kong 5.07, Japan 5.14, Singapore 5.72) in comparison to countries of lower per-capita incomes (Nigeria 5.11, India 5.15, Pakistan 5.49, Peru 5.77, Egypt 6.14, Colombia 6.20, Australia 6.23). (See Diener & Suh 1999, p.444.) The study of Furnham and Cheng (1999) also shows that Japan and Hong Kong score significantly lower in happiness than Britain. Also, according to a survey by a media research agency Optimum Media Direction (reported in China Post in Taiwan late in 2000), ‘only five percent of young people surveyed in Hong Kong said they felt happy. … 47 percent of the 504 respondents in the territory [Hong Kong] said they considered themselves either “a bit fat” or “too fat”. This compares with … Only 15 percent of young people in India felt uneasy about their weight.’

Taken together, the evidence suggests that income matters more for happiness at very low levels of income but it still accounts for less than 2% of the overall variance in individual happiness (Diener et al. 1993). The positive relationship vanishes intertemporally within the same country (at least for the advanced countries which have such data). For example, from the 1940’s to 1998, the real income per capita of the US nearly trebled. However, the percentage of people who regard themselves as very happy fluctuated around 30%, without showing an upward trend; another measure of average happiness fluctuated around 72%. Over the period 1958-88, the per-capita real income level in Japan increased by more than five times. However, its average happiness measure fluctuated around 59%, also without an upward trend (Diener & Suh 1997; Myers 1996; Frank 1999; Blanchflower & Oswald 2000; Veenhoven 1993). In fact, ‘if there is any causal relationship in rich countries, it appears to run from happiness to growth, not vice-versa’ (Kenny 1999, p. 19). Happier persons may be more able to get and keep well-paying jobs; conference organizers may be more willing to invite jolly keynote speakers and pay them more.

Recent research suggests that individuals who strongly value extrinsic goals (e.g. fame, wealth, image) relative to intrinsic goals (e.g. personal development, relatedness, community) have less happiness (Ryan, et al, 1999). ‘Materialism, a preoccupation with economic well-being, is negatively correlated with SWB [subjective well-being], and especially so in those that believe that more money would make one happier’ (Offer 2000, p.20, reviewing Ahuvia & Friedman 1998, p.154, 161).

Kenny (1999, pp. 4-5) also puts the point of fast diminishing marginal utility of income in more objective terms thus: ‘Compare Mozambique, China and the USA. In turn, the countries’ GNPs per capita in 1992 were $80, $470 and $24,740. Infant mortalities were 145.6, 30.5 and 8.6 per 1,000 live births, respectively. Life expectancies were 47, 69 and 76 years. Thus, going 1.6 percent of the distance between Mozambique and the United States in terms of wealth, so reaching China’s income, we move 84 percent of the distance in terms of infant mortality and 76 percent of the distance in terms of life expectancy.’

On the other hand, there are factors that affect or at least correlate with happiness much more significantly than income, including being married or single (Myers 1996, p. 510), being employed or not (Winkelmann & Winkelmann 1998), and having a religious belief and church attendance. (See Veenhoven 1984 and Kahneman et al. 1999 for factors associated with happiness.)

Furthermore, the picture is not much different even if we use more objective indicators of the quality of life. Analyzing a panel data set of 95 quality-of-life indicators (covering education, health, transport, inequality, pollution, democracy, political stability) covering 1960-1990, Easterly (1999) reaches some remarkable results.

While virtually all of these indicators show quality of life across nations to be positively associated with per capita income, when country effects are removed using either fixed effects or an estimator in first differences, the effects of economic growth on the quality of life are uneven and often nonexistent. It is found that ‘quality of life is about equally likely to improve or worsen with rising income. … In the sample of 69 indicators available for the First Differences indicator, 62 percent of the indicators had time shifts improve the indicator more than growth did’ (Easterly 1999, p. 17-8). Even for the only 20 out of the 81 indicators with a significantly positive relationship with income under fixed effects, time improved 10 out of these 20 indicators more than income did.

The surprising results are not due to the worsening income distribution (there is some evidence that the share of the poor gets better with growth). Rather, the quality of life of any country depends less on its own economic growth or income level but more on the scientific, technological, and other breakthroughs at the world level. These depend more on public spending than private consumption. Many studies (e.g. Estes 1988, Slottje 1991; see Offer 2000 for a review) show that measures of social progress strongly correlates with income level at low incomes (to around US$3,000 at 1981 prices) but the correlation disappears after that. Others (e.g. Veenhoven 1991, Diener & Suh 1999) show a similar relationship between happiness and income.

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