“Economic decline affects happiness much more than economic growth does” explains winner of the Veenhoven Award 2015, Jan-Emmanuel De Neve
Erasmus Happiness Economics Research Organisation (EHERO) has granted the first Ruut Veenhoven Award for happiness studies to dr. Jan-Emmanuel De Neve, associate Professor in Economics and strategy and fellow at the University of Oxford. He received the prize for his outstanding and innovative research, and the jury praised the originality, rigor, and breadth in his work, which has been published in top journals such as Science, Psychological Science, and Proceedings of the National Academy of Sciences.
During his acceptance speech for the Award, De Neve presented his recent study on the subjective experience of economic growth. For this study, De Neve and his team used subjective wellbeing data from several cross-sectional surveys, together covering more than 150 countries and four million respondents over more than four decades. In all samples, they found that measures of life satisfaction and affect are at least twice as sensitive to negative economic growth as compared to positive growth.
As such, this study demonstrates a societal example of loss aversion; the tendency of people to be more sensitive to losses than to equal gains, a phenomenon first demonstrated by Nobel-prize winner Daniel Kahneman. On a societal scale, this means that even a short period of recession can cancel out the positive effects of a longer period of economic growth on happiness. These findings might therefore explain the apparent absence of a correlation between increased economic welfare and happiness, known as the Easterlin paradox.
This study carries important lessons for public policy. Because, from a happiness-centred perspective, it shows that modest, sustainable economic growth without too many periods of economic decline should be favoured to a high-growth, high-risk economic strategy. ‘Steady positive growth that minimises the risk of economic contraction seems the most likely route to improving general wellbeing,’ concluded De Neve.
Such recommendations on how to increase happiness seem to be in growing demand, explains prof. dr. Ruut Veenhoven himself. ‘The supply of empirically sound research on happiness is growing, as well as interest in the topic among policy-makers, organisations as well as individuals. Therefore, the current wave of interest in the study of happiness will probably continue’.
Likewise, De Neve states that the Ruut Veenhoven Award symbolises and contributes to the emancipation of happiness research. ‘I feel very honoured to be receiving the Veenhoven Award. I see it as a sign that the economic study of human wellbeing is maturing and I am pleased to have been able to play a role in that process. I look forward to continuing to develop this research agenda and translating it into policy impact in order to raise wellbeing and reduce misery.’
You can also read the announcement by the Saïd Business School at Oxford University here, and a report on the Veenhoven Seminar on the webpage of the Geluksdoctorandus here (in Dutch).
