Are Poor People Less Happy?Findings from Melanesia
Are Poor People Less Happy?Findings from Melanesia
Simon Feeny
School of Economics, Finance and Marketing
Building 80, Level 11
RMIT University
445 Swanston Street
Melbourne, VIC 3000
Australia
Lachlan McDonald
School of Economics, Finance and Marketing
Building 80, Level 11
RMIT University
445 Swanston Street
Melbourne, VIC 3000
Australia
Alberto Posso
School of Economics, Finance and Marketing
Building 80, Level 11
RMIT University
445 Swanston Street
Melbourne, VIC 3000
Australia
* Correspondence to Simon Feeny, School of Economics, Finance and Marketing, Building 80, Level 11, RMIT University, 445 Swanston Street, Melbourne VIC 3000, Australia. Tel: +61 3 9925 5901; Fax: +61 3 9925 5624; Email: .
Abstract
Happiness is increasingly being used to inform development policy. This is particularly true in Melanesian countries where linkages between income and life satisfaction are perceived to be weak. This paper examines the self-reported happiness of households in two Melanesian countries: the Solomon Islands and Vanuatu. The focus is on whether those living in poverty are less happy. Findings indicate that wealth, increases in income, relative income, and living on communally owned land are all positively associated with happiness.Household size and food insecurity have a negative association. There is also strong support for poor households being less happy.
Keywords:Happiness;poverty; Melanesia; Solomon Islands; Vanuatu.
Acknowledgements
This paper is part of a project funded by the Australian Agency for International Development through its Australian Development Research Award scheme. These views expressed in the paper are those of the authors and not necessarily those of the Commonwealth of Australia. The Commonwealth of Australia accepts no responsibility for any loss, damage or injury resulting from reliance on any of the information or views contained in the publication.
1. INTRODUCTION
Happiness, as a measure of well-being, has received great attention by policymakers in recent years. In 2011, the United Nations General Assembly adopted a resolution entitled ‘Happiness: towards a holistic approach to development’ and the 2012 World Happiness Report advocates for self-reported well-being and happiness to take precedence over GDP in policymaking (Helliwellet al., 2012).[i] Throughout the Pacific, happiness gained much interest when Vanuatu topped the New Economics Foundations’ Happy Planet Index (HPI) in 2006. Moreover, the MNCC (2012) focused on happiness in developing alternative indicators of well-being for Vanuatu. The report found that people living on custom land, that participate in traditional ceremonial activities and who are active members of their community are, on average, happier.
This paper seeks to identify the main determinants of happiness in two Melanesian countries: the Solomon Islands and Vanuatu. Communities in these countries are distinct, with the majority of households living semi-subsistence lifestyles on communally owned land in rural areas. Virtually all households have access to a garden on which to grow their food and systems of exchange, reciprocity and social networks are known to be very strong.
A specific objective of the paper is to examine whether there is a relationship between poverty and happiness. To the authors’ knowledge the relationship between the two has yet to be examined in a systematic manner since household surveys are usually designed to focus on one at the expense of the other.[ii] Given the focus of the international community on income poverty and the preference of policymakers in the region (and elsewhere) to find alternative indicators, it is important to determine whether the two are related.
Defining and measuring poverty in Melanesian countries such as the Solomon Islands and Vanuatu is a challenging task. One view is that poverty does not exist in these countries since communally owned land systems, subsistence or semi-subsistence lifestyles and strong social support networks prevent extreme hunger, homelessness and outright destitution. A similar view is that subsistence affluence prevails in these societies. The term, originally coined by Fisk (1971), relates to households being able to satisfy their needs with very little labour input.[iii] It is for these reasons that people have been very reluctant to refer to poverty when evaluating human well-being in these societies.
Yet lifestyles in these societies are changing and many households in these countries face a number of challenges akin to poor households across the world. Malnutrition and hunger exist, with households relying on cheap, sometimes poor quality imported food and sometimes skipping meals. Monetisation is increasing the importance of income to enable the payment of school fess and the purchase of basic household goods and services in order to meet the basic needs of the family. Urbanisation combined with very few employment opportunities has given rise to squatter settlements, high rates of unemployment, social tensions and crime. Moreover, climate change threatens to exacerbate the problems faced by these countries. Unfortunately, only a very limited number of surveys are conducted to provide insights into these issues. Assessing well-being in these contexts is therefore timely and important and can provide crucial information for policymakers and their social protection policies.
The challenges facing these countries are borne out by some of their official development indicators. While the World Bank classifies both the Solomon Islands and Vanuatu as middle income countries, other indicators reveal relatively low levels of development. Using basic needs poverty lines, in 2006, 23 per cent of the population of the Solomon Islands and 16 per cent of the population of Vanuatu lived in poverty (AusAID, 2009).[iv] According to the Human Development Index (HDI), the Solomon Islands and Vanuatu rank 143 and 124 respectively out of 186 countries (UNDP, 2013). Assessing progress towards the United Nations Millennium Development Goals (MDGs) is difficult due to a paucity of data but where data do exist they suggest that the Solomon Islands is unlikely to achieve any of the goals while Vanuatu is on track to achieve just two: reducing child mortality and combatting HIV/AIDS and other diseases (PIFS, 2012). Improving child health remains a challenge in both countries, with 26 per cent of children under the age of five in Vanuatu and 32 per cent of children in the Solomon Islands found to be stunted (AusAID, 2012).
Given the distinctive lifestyles of Melanesian communities, defining poverty in the region will always be controversial. There is however, a consensus that conventional measures of poverty based on income or consumption are considered inappropriate. Further, participatory poverty assessments conducted in these and other Pacific countries found that households preferred the term hardship over poverty and reported suffering from a lack of access to basic services, income earning opportunities and good governance.
In recognition that any measure of poverty in the countries is likely to be contentious, the focus of this paper is on the well-known Multidimensional Poverty Index devised by Alkire and Foster (2011). The index is arguably well-suited to Melanesian countries since it uses information on three non-monetary dimensions of well-being: health; education and living standards. The impact of relative poverty (how rich people feel relative to the rest of their community) on happiness is also examined.
The remainder of this paper is structured as follows. Section 2 summarises the existing literature which has sought to explain the determinants of happiness. Section 3 describes the data and methodology employed by the paper. Section 4 presents the findings from the empirical analysis and finally, Section 5 concludes.
2. LITERATURE REVIEW
There is now widespread recognition of the inadequacy of income as measure of well-being and a search for more appropriate measures. As noted above, this is particularly true in Melanesia where semi-subsistence livelihoods and very strong social support networks imply that the use of income-based measures of well-being is inappropriate.
The Alternative Indicators of Well-being report for Vanuatu emanated from the 2008 Melanesian Spearhead Group (MSG) Trade and Economic Officials Meeting (TEOM) and the MSG Leaders’ Summit. The leaders agreed that governments in the region need to do more to account for and measure the non-cash values that contribute to their peoples’ quality of life (MNCC, 2012). Findings suggest that people from Torba province are the happiest in Vanuatu and this is despite them having low incomes and being a long way from a major market. The report also demonstrated the importance of resource access, culture and community vitality, necessitating the inclusion of such factors in the investigation carried out by this paper. The remainder of this section summarises the determinants of happiness that have been identified by other studies.
(a) Income and happiness
The focus of many happiness studies has been the impact of income. Such investigations are motivated by the seminal work of Easterlin (1974) which presented a so-called paradox. He found that: (i) richer individuals in the US are happier than poorer individuals but; (ii) over time, as the US got richer, average happiness failed to increase. In fact, despite income levels increasing, levels of happiness in the US, Japan, UK and most European countries have been static since the late 1950s (Laynard, 2006). A number of explanations have been purported to explain this paradox.
The first is that individuals’ relative incomes are important for happiness, rather than actual income levels (Jiang et al., 2012).[v] Individuals compare themselves to others and feel happier if their relative circumstances improve. According to this theory, if all individuals’ incomes increase together, then their relative standing does not change and happiness remains unaltered. Secondly, as argued by Layard (2006), people adapt to higher incomes quite quickly, making it hard to secure permanent increases in happiness from increases in income. While a rise in income might therefore have an impact on happiness initially, this impact dissipates over the longer term. Thirdly, the World Happiness Reportargues that higher incomes can come at a cost, such as environmental degradation, an increase in insecurity, a loss of trust and reduced confidence in government. At a country level, it might also be the case that additional incomes only flow to the rich, doing little to increase the average level of happiness (Helliwellet al., 2012).
Another finding is that there is diminishing marginal utility of income with respect to happiness. In other words, the life satisfaction of the poor can be improved with small amounts of money while richer individuals require a much larger increase in absolute income to improve their happiness. At low levels of income, additional financial resources can secure basic needs such food, clothing, housing, health care, water and sanitation. At higher incomes, such needs have already been met (Helliwellet al, 2012).
(b) Non-income determinants of happiness
There is generally a consensus on the non-income determinants of happiness (Appleton and Song, 2008; Dolan et al., 2008; MacKerron, 2012). In particular, after basic needs are met, aspirations, relative income differences and the security of gains in well-being are all found to be important (Graham, 2005).[vi]
Helliwellet al (2012) categorise the main determinants of happiness into two groups. The first group includes external factors, which policymakers can change such as income, work, community and governance, and values and religion. Country level data reveals that happiness is highest in countries with a sense of community, trust and social equity – Denmark, Finland, Norway, Netherlands. The second group includes person factors such as mental health, physical health, family experience, education, gender and age.
Unemployment and less job security are found to impact negatively on happiness (Di Tellaet al, 2001; Frey and Stutzer, 2002) while trust, being part of a community, freedom, equality and religion all have a positive association (Helliwellet al., 2012). Better mental and physical health are found to be positively associated with happiness although these variables are often difficult to measure (Helliwellet al., 2012). Marriage is nearly always found to increase happiness but there is no strong evidence that having children is associated with happiness (Stutzer and Frey, 2006). The level of education is usually expected to increase an individuals’ income although there is relatively little evidence of this effect independent of income (Helliwellet al., 2012). With regard to gender, women are found to be happier than men in advanced economies but the reverse is sometimes found to be the case in developing countries (Graham and Felton, 2005; Blanchflower, 2008; Senik, 2004). The relationship between happiness and age is often found to be U-shaped with happiness declining for middle-aged individuals before rising in later life (Blanchflower and Oswald, 2004; Helliwell, 2003). These findings from the literature inform the specification of the empirical model specified in the proceeding section.
However, while studies have tended to focus on the relationship between income and poverty, there is little evidence of whether poverty (and non-income poverty in particular) is related to happiness. It is sometimes argued that the poor are happy possibly due to a focus on relationships and community vitality rather than on money and materialism with pictures of smiling people in remote areas of Africa providing testament to this claim.Conversely, it can be argued that such assertions are naive to the aspirations of the poor and their need for access to food and basic services for their survival.AmartyaSen notes that the some people can bear adversity cheerfully (although this does not mean there is no adversity and that we should ignore the depravity experienced by the poor (see Barford, 2011)). A related issue is whether there is a relationship between vulnerability and happiness. Vulnerability refers to the likelihood of being poor or becoming poor in the future. Graham and Pettinato (2002) find that the self-reported well-being of those who have escaped poverty can be lower than that of the poor due to an insecurity or risk of falling back into poverty. This paper contributes to the existing literature by examining these issues in greater detail.
3. DATA AND METHODOLOGY
(a) Data
The paper employs data from a unique household survey conducted in the Solomon Islands and Vanuatu in 2012-2013. A total of 619 households were surveyed (302 households in the Solomon Islands and 317 households in Vanuatu). Five locations were targeted in each country, which were selected based on criteria that sought to reflect diversities in remoteness, economic activity, and environmental differences.
In the Solomon Islands, communities on the two largest islands were surveyed: Guadalcanal and Malaita. In the capital, Honiara, two squatter settlements, White River in the west of the city and Burns Creek in the east, were visited. The former is a multi-ethnic settlement located in western Honiara while the latter consists mainly of Malaitans that were displaced during an ethnic conflict from 1999-2003. Two communities on the Weather Coast of Guadalcanal, Oa and Marauipa, were also surveyed. This is a region renowned for its geographical remoteness and its exposure to harsh climactic conditions. Finally, households were surveyed in the densely populated rural centre of Malu’u, which is located about 80 kms north of Auki, the country’s second largest city, on the island of Malaita.
Comparable communities were visited in Vanuatu. In the capital city, Port Vila, communities were visited in the squatter settlements of Ohlen in the north of the city and Blacksandsin the south west, both of which are home to migrants from outer islands. Two migrant communities in the country’s second largest city, Luganville, located on the island of Espiritu Santo, were also visited (Pepsi and Sarakata). While only separated by the Sarakatariver, these two communities enjoy very different access to government services since, at the time of the survey, Pepsi community was not considered to be under the auspices of the Luganville Municipal Council. The final survey location was Hog Harbour, also on Espiritu Santo, which is a rural village with good access to Luganville following the completion of the East Santo road, and also to tourism owing to its proximity to the well-renowned Champagne Beach.
The survey was designed following a literature review of poverty and happiness and their drivers in developing countries, particularly in the Pacific Islands. In order to capture potential gender differences, the research teams aimed for a 45 to 55 per cent gender balance in survey respondents. To measure happiness, household members were asked (in their local language) ‘On a scale of 1-10 (with 10 being very happy and 1 being not happy at all) how happy are you?’[vii] The happiness scores by community for each country are provided in Figure 1 below.
Figure 1: Happiness Scores by community in the Solomon Islands and Vanuatu
(b) Methodology
As outlined in Graham (2005), empirical models of happiness are usually specified in the same way. We follow this specification:
, (1)
where is self-reported happiness of household member i, is a vector of explanatory variables including socio-demographic and socio-economic characteristics. is a constant and is a vector of coefficients. Unobserved characteristics and measurement errors are captured in the error term ().