Subjective well being, or happiness, has been analyzed in detail by psychologists for decades. Yet only recently has it become the subject of economic analysis. In Happiness and Hardship, Carol Graham and Stefano Pettinato provide a new conceptual framework for analyzing the relationship between subjective well being and the political sustainability of market-oriented economic growth in 17 Latin American countries and Russia. Several variablessuch as marital status, employment, and inflationare known to influence happiness. Graham and Pettinato have identified other variables that have important effects on how individuals perceive their well being: macroeconomic volatility, globalization of information, increasing income mobility, and inequality driven by technology-led growth. The authors begin by explaining data and measurement problems involved in studying mobility, and they summarize general trends in developing countries. Second, they provide new data on subjective well being for Latin America and Russia. They find that the socio-demographic determinants of happinesssuch as the effects of age and unemploymentare very similar to those in the U.S. and Europe. They also find that relative income differences have important effects on how individuals assess their well being. Those in the middle or lower middle of the income distribution are more likely to be dissatisfied than are the very poorest groups. Third, the authors find that volatility in income flows can have negative effects on perceived well being, even among upwardly mobile individuals. Finally, the authors explore the relationship between social capital and mobility. They distinguish between participation driven by economicnecessitysuch as soup kitchensand voluntary participation in civic organizations. They find that different objectives underlying civic participation can result in different effects on individual mobility rates, on perceived well being, and on aggregate growth. An age-old puzzle is why some societies seem to tolerate significant degrees of economic hardship and yet retain political and social stability, while others break out into violent protest as a result of much smaller economic declines or shocks. Happiness and Hardship sheds new light on factors that can increase mobility and provide new opportunities for low-income people in developing economies, and possibly improve perceived, as well as actual, well being.
"Recommended for economics and political science collections." --R.S. Rycroft, Mary Washington College, Choice, 9/1/2002 "[Graham and Pettinato] shed penetrating light on a highly topical question: does one's overall level of subjective satisfaction- 'happiness' determine popular support for economic reform?" --John Starrels, Senior Public Affairs Officer, IMF External Relations, Finance & Development, 9/1/2002 "An excellent review of a complex subject..." --Richard N. Cooper, Foreign Affairs, 9/1/2002 "Carol Graham and Stefan Pettinato provide a thorough and illuminating examination of how economic conditions in emerging market countries affect peoples' happiness. In particular, the authors explore how economic mobility, opportunity, and relatively low income levels affect life satisfaction. Graham and Pettinato have much to offer on several levels. First, Happiness and Hardship provides an accessible and thorough introduction to connections between economic conditions and happiness, while breaking new ground by focusing on emerging markets... overall, this work adds up to a valuable analysis of the determinants of happiness in a small set of less developed countries -- useful knowledge for students, scholars, and policymakers." --Adam Resnick, Western Washington University, American Political Science Associatin, Perspectives on Politics