The Chinese Are Becoming Wealthier, So Why Aren’t They Happier?

This is the question raised in a recent article in the Journal of Happiness Studies: “The China puzzle: falling happiness in a rising economy”, by Hilke Brockman, Jan Delhey, Christian Weizel and Hao Yuan (V10, 4, 2009).

The focus of the study is the decade from 1990 to 2000. Even though real per capita GDP in China was 2.8 times higher in 2000 than in 1990, the percentage of Chinese describing themselves as very happy declined from 28 percent to 12 percent and the average life satisfaction rating fell from 7.3 to 6.5 (on the WVS 10 point scale).

The authors consider three possible explanations: anomie (powerlessness), political disaffection (declining trust in government) and relative deprivation (frustration because increased income inequality resulted in a higher proportion of the population with below average incomes). Anomie is measured by survey data on the lack of a feeling of free choice and control over the way you live your life. Political disaffection is measured by survey data on lack of trust in the government and parliament. Survey data on financial dissatisfaction (dissatisfaction with the financial situation of your household) is used as a proxy for relative deprivation.

To cut a long story short, the authors conclude that relative deprivation provides the best explanation because the decline in life satisfaction is strongly associated with a decline in financial satisfaction. (A fuller summary of the article is available on Psyblog )

The main problem I have with this conclusion is that data presented in the article suggests that average life satisfaction of high income earners declined along with the life satisfaction of those on lower incomes. There was no reason for the high income earners to feel relative deprivation.

When I look closely at the data it seems to me that the main puzzle is not why average life satisfaction in China was lower in 2000 than in 1990, but why such a high proportion of Chinese were recorded as satisfied with life in 1990. This figure, 68 percent, was higher than in such high income countries as Austria, France, Germany and Japan.

When you look at average life satisfaction of people in different age groups (Fig. 1) older people seem to have been much happier than young people in 1990 and the situation has been partially reversed since then. A comparison of Figure 1 and Figure 2 shows similar patterns for life satisfaction and financial satisfaction. This suggests to me that the apparent decline in average life satisfaction between 1990 and 2000 might possibly be attributable to perceptions by older people that their financial security had declined for some reason e.g. concerns that as a result of social changes young people might be less likely to support them in their old age.

Even if we disregard the 1990 data, however, it is apparent from the Figures that we are still left with the problem of explaining why average life satisfaction and financial satisfaction has not increased since the mid 1990s. The decline in consumption as a percentage of GDP from about 50 percent around 1980 to about 32 percent in recent years cannot provide a complete explanation, because this has not prevented real per capita consumption from increasing substantially.

My guess is that the failure of average life satisfaction to rise in China is associated with a change in the benchmarks that people use to assess their current well-being. In 1990 many people in China may have been using past living standards as the benchmark in assessing their current satisfaction with life. Since then, however, their aspirations have probably risen as they have come to view the living standards enjoyed in high income countries as attainable in the foreseeable future. If I am right most Chinese people would probably agree that “they have never had it so good”, to borrow an unsuccessful political slogan. But those old enough to remember what life was like 30 years ago would probably rather forget about that.

Note: The subjective well-being data referred to above is from the World Values Survey. Gallup data also shows no increase in subjective well-being in China. See:

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10 comments to The Chinese Are Becoming Wealthier, So Why Aren’t They Happier?

  • Hilary

    Why aren’t they happier? Capitalism imposed at the barrel of a gun is no reason to celebrate.

  • The Gallup poll suggests that the Chinese are about as satisfied with the amount of freedom in their lives as the French, and not too far behind the Americans in that respect.
    If you say that the Chinese have been brainwashed, I agree. But that is not consistent with the view that they feel that the government is imposing capitalism on them and that is making them unhappy. I think the evidence suggests that most Chinese actually like the limited economic freedom they have been given – and they like economic growth.
    This is more apparent in a follow-up post, which can be found here:

  • Happiness research vainly tries to measure the unmeasurable, much like macroeconomics. There is no objective happiness or misery, any more than there is an objective utility or value.

    The fact is that most societies throughout history have liked the security of slavery once they have been subjected to it for long enough. It takes a courageous and self reliant population to rise to the challenges of personal freedom. Freedom means responsibility and many people would rather be told what to do, especially if they have gotten used to it..

    What China is imposing cannot really be called capitalism if there is no real economic freedom, because that is the very essence of capitalism. Private property and the opportunity to reap the benefits of using it for personal gain is the only way for a society to share real long term growth and prosperity. Wishy Washy capitalsm of the European variety, and the new American variety, is the way to make people dependent and unhappy. They get the responsibility without reaping the benefits.

  • Dan: You are right that happiness is subjective. But that doesn’t mean that the information that people give in response to surveys is of no value. Some private firms actually buy the information from other private firms e.g. Gallup.

  • My wife is chinese and she was never happy living in Bejing because the rush by the Chinese government to embrace their form of western capitalism left many regions in despair. Buildings would be put up within weeks not years and the toll it took on the environment and in particular, rural village life was and is immense. The chinese by their very nature are a frugal people and capatilism (in my view) does not work for them.

  • Mark:
    Capitalism seems to have worked quite well for the Chinese in Hong Kong.

  • George Thistle

    China will soon take over the world, mark my words ;)

  • Victor

    Well i believe the Chinese are working like Americans. Their governments have set goal and they are slowly and steadily moving towards it, no matter if they are not able to generate common conscience among citizens. I guess what they plan is their supermacy over the world; economically and militarily . Could be the main country leading world war 3 :)

  • Amanda Gillam

    I agree completely with Dan’s earlier post, trying to accurately measure happiness is an impossible task. Significant finance without economic freedom isn’t conducive to making anyone happy!

  • The fact that feelings are subjective doesn’t mean that they can’t be revealed to other people and compared. We do it all the time when we greet people. When you ask some how they are feeling today you are inviting them to reveal a subjective state and make a comparison with how they have felt at other times.

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