The disconnects between objective metrics and happiness

There is an unexpected divergence between objective wellbeing metrics and self-reported happiness. But why might this be the case? And are policymakers missing the mark?

While exploring a model of individual and employee wellbeing that combines both objective and subjective indicators, I stumbled upon a fascinating master’s thesis that challenges the conventional wisdom about happiness and wellbeing. The most striking finding? A negative relationship between what policymakers traditionally consider objective indicators of wellbeing and how individuals perceive their own happiness. This divergence offers valuable insights into why more wealth, safety, or health doesn’t always translate into greater happiness

How individual domains affect wellbeing

The thesis, titled „Measuring Objective and Subjective Wellbeing in the Netherlands,“ by Ivelin Rusev and Bas van Groezen took a deep dive into the wellbeing of Dutch society over a span of nearly two decades. The research built two indices: one objective and one subjective.

The objective index included things you might expect – levels of education, crime rates, environmental quality, employment statistics, social inclusion, quality of institutions, health, income, and housing. The subjective index (ie. happiness), on the other hand, measured elements like trust, life satisfaction, perceived wellbeing, and social support. The idea was to see how these two indices danced together over time and the main findings are summerised in the table below.

Chart 1: Indicators of subjective and objective wellbeing (Rusev, 2023)

Lets first look at the main findings of the study and how individual domains of objective wellbeing influenced subjective happiness, and the results were eye-opening.

Education: More pressure, less pleasure?

Education is often hailed as the key to a better life. However, the study showed that as levels of education increased, subjective wellbeing didn’t necessarily follow. In fact, higher levels of education can sometimes lead to increased pressure, competition, and the constant burden of rising expectations. The more educated we become, the more we expect from ourselves and others, which can lead to dissatisfaction.

Safety and crime: The fear factor

Interestingly, even as crime rates decreased, people didn’t necessarily feel safer or happier. It seems that perceptions of safety are more influenced by what we hear and see in the media than by actual crime statistics. This suggests that even as our communities become objectively safer, our subjective sense of security might not improve—or could even decline—if we’re constantly bombarded with alarming news.

The environment: The invisible gains

Impro…