Life- satisfaction as a broad measure of subjective well- being has
been subject to a number of validity tests, via its relations to physio-
logical and neurological measures, and its predictive power regarding
future observed behaviors. Some of this validation work is described
in Clark, Frijters, and Shields (2008). The BCS life- satisfaction ques-
tion is a little different from that found in some other general- purpose
surveys, although we believe that this question behaves similarly to the
more standard question.
See Chapter 1, n. 3.
See, for example, Layard, Nickell, and Mayraz (2008).
We calculate equivalized household income using the OECD
equivalence scale. This scale gives the first adult a weight of one,
any extra adults a weight of 0.7, and children a weight of 0.5. A house-
hold consisting of one single adult earning 50,000 a year would thus
have an equivalent income of $50,000. The same income for a two- adult
household produces an equivalent income of 29,400 (= 50,000/1.7), and
for a two- adult two- child household an equivalent income of 18,500
(= 50,000/2.7).
The results are very similar if children are treated as a choice
variable and income is therefore measured as income per adult.
In 2012 pounds sterling the mean is £18,089, and the standard
deviation £14,728.
See online Annex 2.
α 1 Δ log Income = 0.20 × 0.7.
0.20 × 0.10. We have also examined whether this effect would
be larger at the lowest level of income and found no evidence of non-
linearity in the effect of log income (see Chapter 6 and Layard, Nickell,
and Mayraz [2008]).
Now known as Understanding Society.
All report disposable household income.
Online Table A2.1 repeats the analysis for 30- to- 45- year- olds
(the ages of the BCS), and the fixed effects estimates remain small.
For other data using Eurobarometer, see online Figure A2.1.
The Eurobarometer samples are much smaller than those in Figure 2.3.
For Britain, we also have the large ONS survey, which shows a steady
mild increase in life- satisfaction from 2011 to 2016.
Easterlin (1974).
For No, see Easterlin, Angelescu- McVey, Switek, et al. (2010), chap-
ter 5; and Easterlin (2016). For Yes, see Sacks, Stevenson, and Wolfers (2012).
For a summary of the debate, see Layard, A. E. Clark, and Senik (2012).
