Sunday, June 21, 2009

Are socialists happier than capitalists?

The research, forthcoming in the August 2009 issue of the Journal of Economic Behavior and Organization, expands our understanding of the correlation between happiness and democracy — and whether economic concerns outweigh political reforms in their impact on subjective well-being.

"Although one might suppose these questions are of interest — some might even say fundamental interest, considering that they involve comparing capitalism and socialism — they have received little attention in the voluminous literature on transition economies," says Richard Easterlin, USC University Professor and professor of economics at USC.

Easterlin examines life satisfaction in thirteen countries in the so-called communist-bloc using self-reported data from a range of sources, particularly the World Values Survey. Communist-bloc countries first appeared in the large-scale Survey in 1989, when a representative population in each country was asked to rate "life these days, as a whole" on a scale of 1 (dissatisfied) to 10 (satisfied).

Other surveys before and after the fall of the Soviet Union in 1991 asked similar questions about specific aspects of life — such as work, health, and standard of living — and about "the way democracy works in (your country)."

"The dissolution of the police states and increase in political and civil rights in many of the transition countries might have been expected to increase life satisfaction," Easterlin says. "The sharp decline that initially occurred suggests that adverse economic and social conditions trumped the political in their impact on subjective well-being."

The study finds that the trend in overall satisfaction with democracy is actually slightly negatively correlated to the trend in reported happiness after the fall of the Iron Curtain. This correlation is not statistically significant, according to Easterlin, but undermines the assertion by some scholars that democratization in these countries significantly increased happiness.

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