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December 14, 2023 by Jason Barr Leave a Comment

Our Economic Future (Part I): How Come We’re Not Getting Happier?

Jason M. Barr December 14, 2023

The Birth of Economics

Roughly speaking, the century from 1870 to 1970 can be called the Utopia-Was-Possible Century. By 1870, national incomes began rising faster than their populations; thus, economic growth was a fact of everyday life.

This improvement in our material lives was created by the switch to industrial-wage-based manufacturing, technological improvements and economics of scale, cheap fossil fuel-based energy, and the rise of global trade and finance.

The “fixed-pie-economics” of empire and mercantilism, where one nation gained at the expense of another, was now in its twilight, in the sense that economic growth through trade and mass production was to become the norm.

However, in the early years, all was not right in the Factory. Industrialization and trade produced a surfeit of darker sides. Workers toiled in miserable conditions for little pay; the urban air was darkened by thick clouds of smoke from burning coal; and the new technologies, like machine guns, could be used to unleash previously unimaginable waves of death to citizens and enemies alike.

The Dream of Utopia

From this era of promise and peril emerged a stew of ideas on how humanity could use its growing wealth to create paradise on Earth. Some nations took the socialist route and abolished private property, while others embraced market systems with varying degrees of government involvement.

By 1950, humanity developed a consensus that democratic capitalism, global trade, and a relatively benign global hegemon—the United States—would produce the most peace, the fairest allocation of resources, and, just as importantly, the greatest wealth of nations.

Though the Soviet Union and Communist China became immense forces, their experiences quickly revealed that they did not, in fact, hold the secret to utopia. The USSR became a totalitarian state, while Chairman Mao’s Great Leap Forward resulted in millions of deaths by starvation, and the Great Proletarian Cultural Revolution turned the citizenry against itself. By the end of the 20^th century, these socialist states had simply withered away.

The Failure of Our Utopian Future

And here we are in the 21^st century, some 150 years after humanity realized how to generate meaningful economic growth, but the promise of paradise never materialized. Today, the idea of utopia seems a distant, laughable dream. Rather, existential threats—economic, environmental, and political—hover above us like a cloud of killer bees.

Is Humanity Getting Happier?

Our failure to solve our economic problems is demonstrated by our life satisfaction. Since 2012, the United Nations (UN) has produced the World Happiness Report, which gives the average level of life satisfaction for each country’s residents, measured by asking people to rank on a scale of 1 (lowest) to 10 (highest) how satisfied they are with their life in general. A large body of research has demonstrated that the answer to this question is a useful predictor of the quality of our lives.

Across the Globe

Across the globe, humanity actually seems to be getting happier (the COVID-19 pandemic notwithstanding). Average national happiness can be seen from the figure below, which gives the average life-satisfaction levels of over 100 nations around the world since 2007.^[1]

Happiness was rising as the global economy in the 2000s was improving, and then the Global Financial Crisis put the brakes on things. But then, between 2016 and 2020, global happiness shot up. COVID-19 came along and misery ensued. Despite this, global life satisfaction will likely resume its upward trajectory when the aftermath of the pandemic dissipates.

The Happiness of Nations. This figure gives the average happiness level of countries around the world. Source: UN World Happiness Report (2023). Note: The black dashed line is a quadratic trend.

The Correlates of Happiness

When we look at the global averages since 2007, they range from just below 5.4 to slightly above 5.7. Developed countries typically score closer to 7, suggesting room for improvement for the developing world. But global happiness’s rise and fall begs the question: What makes us happy?

The UN report focuses on six correlates of happiness. First is real per capita GDP, which measures a nation’s income level. Second is the degree of social support, which is measured as the national average of the response to the (yes or no) survey question: “If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?”

The third element is a nation’s life expectancy at birth, which indicates health and healthcare quality. Next is the perception of residents’ freedom to make life choices, measured as the average of the response to the (yes or no) question, “Are you satisfied or dissatisfied with your freedom to choose what you do with your life?” After that is the measurement of generosity, measured by a country’s relative charitable giving rate. Finally, is the perception of corruption based on the average response to the (yes or no) question, “Is corruption widespread in your country?”

In short, these correlates look at income, the quality of people’s social experiences, their health, and their feelings of trust.

The Income Effect

Using their measures of the “inputs” to happiness, I find that GDP is the most important predictor of well-being around the globe (data and analyses are here). This makes sense as income—and the goods and services it buys—is first and foremost for survival. When a nation lifts itself out of poverty, its residents no longer worry about finding their next meal or a place to live.

And, around the world, income has been rising. In fact, between 2000 and 2022, Planet Earth’s real per capita GDP has risen by 43%. Many countries, such as China, Lithuania, Ivory Coast, and Uruguay, are developing rapidly, and their quality of life is improving (India’s happiness, however, has been falling from already low levels). To the extent that rising national incomes are channeled towards better health care, improved educational systems, and more life opportunities, the better people’s lives will be.

A simple measure of life quality is the so-called Human Development Index (HDI), compiled by the UN, which is based on life expectancy at birth, average educational levels, and per capita gross national income. We can see a strong relationship between a nation’s happiness and how it scores on the HDI. Though a strong predictor, it’s not 100%. Other factors are clearly at work.

The Inputs to Happiness. Clockwise from Upper Left: National happiness vs. the Human Development Index (HDI), happiness vs. ln(GDP per Capita), happiness vs. freedom to choose response, happiness vs. social support response. Sources: Happiness, GDP, Social Support and Freedom from the World Happiness Report. HDI from the UN. Black lines are trends (quadratic or linear).

Anxiety in the Developed World

Each year, when the UN Happiness Report is released, the press focuses on the “Happiest Country on Earth.” Usually, the top one is from the Nordic zone, with Finland winning the prize in the last five years. But little attention is paid to the trends—what’s happening over time? In 2012, 2013, and 2016, Denmark was the happiest country in the world. But its happiness level has dropped in the last decade. Finland has done something right, allowing it to take the top slot. But if Denmark’s experience is any guide, being king of the hill may be unstable.

More broadly, what’s happening in the developed world? For simplicity, I focus on what I call the OECD+ countries—a group of 23 nations that represents the developed world (the original 20 Organization for Economic Co-operation and Development (OECD) countries plus three more, Australia, Japan, and New Zealand), which include the Anglo countries of North America and Oceania, Western Europe (including Türkiye), and Japan.

The data strongly suggest that once a country hits a certain wealth threshold, its overall well-being stays flat and often declines. Additionally, responsiveness to the happiness inputs generally falls. That is to say, rises in income and social support seem to matter less—or not at all—for increasing happiness.

The Delta

Looking at the changes from 2009 to 2019, we see that 17 of 23 of this group saw their happiness decline, while two were flat, and only three saw measurable rises. What drove these countries to reduce their life satisfaction? It’s not income. All these countries experienced net income growth (despite the Global Financial Crisis), and it wasn’t because of health and life expectancy, which also improved.

Instead, many of these countries experienced a drop in social support and generosity measures. Retrenchments along the social dimension appear to be driving the decline in happiness.

The Happiness Delta. Changes in happiness for 23 developed countries from 2009 to 2019. Source: World Happiness Report. Note: Happiness for each year is taken as three year average (i.e., 2009=average of 2008, 2009, 2010; 2019=average of 2018, 2019, 2020). Note: the list is original is the OECD members plus Australia, New Zealand, and Japan.

The United States

Telescoping onto the United States can shed more light on what’s happening with happiness in the developed world. If there’s one country where life should be improving, it’s the United States, with low unemployment and relatively rapid economic growth. Nonetheless, one fact stands out: American happiness has declined in the 21^st century.

We can take a longer-run perspective thanks to data collected since the early 1970s from the University of Chicago’s National Opinion Research Center (NORC), which conducts its General Social Survey (GSS). Since 1972, the GSS has regularly asked people, “Taken all together, how would you say things are these days—would you say that you are very happy, pretty happy, or not too happy?” From this, we can create an index of average happiness (with 3 = very happy, 2 = pretty happy, and 1= not too happy).

The index reveals that American happiness peaked before the new millennium. The 21^st century has been sad and grumpy so far. I don’t want to overstate the case. In the World Happiness Report, the U.S. typically lists around 15^th in the rankings—with averages typically around 7 out of 10. Nonetheless, the data suggest that America is losing the happiness battle.

Declining American Happiness. Left: Average happiness index value from 1972 to 2022 from the General Social Survey (GSS) (left axis), along with average happiness value from World Happiness Report (right axis). Right: GSS Happiness Index (left axis) and US real per capita GDP (right axis) (source: MeasuringWorth.com). Linear trends included on left graph.

The Happiness Paradox

Part of the problem, in most developed countries, is that increases in income fails to cure our happiness blues. In 1974, economics professor Richard Easterlin discovered something about income and happiness. After a nation grows its economy to a certain level, there’s little apparent relationship between GDP and happiness. We can see this in the United States. Since 1972, real GDP (in $2017) per person has grown from $27,500 to $65,400, or 137%, while happiness levels have declined.

The reason for this lack of relationship is that what makes people happier within a nation is not their absolute income but rather their relative income. Most people compare their income level to those of their neighbors and social groups. And when their income is lower than the typical comparator, they feel worse.

The problem from a societal view is that the ranking is a zero-sum game. When one person rises in the rankings, someone else falls—thus, they switch happiness levels, and the total societal happiness level doesn’t change.

Another way to put this is that we can’t rely on economic growth to stimulate our happiness. Rather, we need rising incomes to ensure we don’t lose happiness (through unemployment or lower wages). In this sense, economic growth is a treadmill. If it stops, we fall off the machine. Otherwise, we keep running in place.

And just as important, we cannot use economic growth to only allow for greater consumption. Instead, some of the additional income needs to be employed for things that truly make us happy: healthier lives, higher quality social interactions, and fewer anxieties about life’s vagaries.

Why Did America Lose its Happiness Mojo?

Using the GSS data sets, we can make some inferences by looking at the statistical correlates of happiness. However, we first need to control for individual-level characteristics (via regression analysis, with results here). For example, the very young and very old tend to be happier than their overworked middle-aged counterparts. The rich tend to be happier than the poor. Those with higher educational obtainment tend to be happier than those with fewer years of schooling. Employed people tend to be happier than the unemployed, and so on. This exercise shows that happiness has been declining even after controlling for personal characteristics. So, the drop is not a statistical artifact due to sampling issues.

Declining American Trust. The blue line an index of social trust (right axis) and the orange line is the % of Americans who say other people can be trusted (left axis). Source: General Social Survey.

Drop in Trust

Let’s turn to trust. Since 1972, the survey has asked people, “Generally speaking, would you say that most people can be trusted or that you can’t be too careful in dealing with people?” The responses can be used to gauge national trust levels.

A large body of literature shows that social trust is a key component of happiness. If people trust their neighbors and their government, they will suffer less anxiety. They will have less fear of being ripped off and more comfort that the government will step in to provide needed services. And they will also be more socially engaged.

However, the response to the trust question has been worsening in the United States. In the 1970s, 40% of respondents typically said they can trust people. By 2018, it was down to about 21% (with shocking drop during COVID).

Including the trust variable in statistical (regression) analysis reveals two things. First is that declining trust is a factor in reducing happiness. On average, people who say they can trust people are about 0.1 “happiness points” higher than those who don’t (out of a maximum of 3). So, the declining share of those who say yes to that question leads to declining happiness in the population.

Party Affiliation

However, including the trust variable in the statistical analysis still does not “explain away” the negative happiness trend. Given the political polarization, I included people’s political party identification, which ranges from strong Democrat to independent (which includes people in neither party or who do not respond) to strong Republican.

One finding that pops out is that independents are less happy than their Democratic or Republican counterparts. I must caution, however, about the direction of causality. Are party members happier because they joined the party and feel a sense of belonging in the organization, or does dissatisfaction with the party system and modern government make people become independents? We can’t answer that here. Nonetheless, the data show that party support on both sides of the political spectrum has been declining, which is associated with lower national happiness.

American Happiness Trends. The blue line shows the happiness trends after controlling for individual characteristics. The orange line also includes a trust indicator. The gray line adds in political party affiliation. The yellow line adds in newspaper reading measures. Source: here.

News Media Consumption

Still, even including the party affiliation variable does not make the negative trend disappear. The next variable I included was the responses to the question, “How often do you read the newspaper?” While the question does not seem to explicitly state a physical paper version, it certainly suggests that. Starting in 2005, the number of people responding “never” shot up. Before then, the average was about 5%; by 2018, it was nearly one-third.

And just as importantly, those who responded that they rarely or never read a newspaper report lower happiness levels. Again, the direction of causality is unclear, but it suggests that due to the internet, media outlets have become more fragmented. We have fewer, if any, news sources that can act as national uniters, and little sense that reporting is done for the national good. Rather each highly specialized (and opinionated) outlet caters to its own tribe, which implicitly helps to separate us and engender distrust. Reading the news, it seems, gives us greater civic purpose.

In fact, when I include these three variables in the analysis: the trust measure, the party affiliation indicator, and the frequency of newspaper reading, the yearly downward trend flattens out. In other words, these three indicators seem to account for much the drop in American happiness in the 21^st century.

A Broader View: What We Haven’t Solved

What happened to the dream of peace and property? While I will have more to say in the next post on this topic, I will offer a few thoughts here. If we take a long-run view of humanity since 1870, we can see that while we have come a long way, there’s still much to be done.

Constant Wants

To the extent that economic growth generates the impulse for more consumption, we are constantly replacing our old goods with new ones. There is never a sense that we “have enough.”

Technological Insecurity

Related to our constant wants is the evolution of technology. As the current debate about artificial intelligence demonstrates, we find ourselves uncertain if new technologies will bring happiness or obsolescence and addiction (enslavement?). There’s every reason to believe that the “internet-ization” of society has increased our anxiety and reduced our self-esteem.^[2]

Economic Uncertainty

The Global Financial Crisis of 2007-8 and its aftermath have demonstrated that we have not eliminated the business cycle or financial crises, and the severe dislocations that they create.

Income and Wealth Inequality

Economic inequality is getting worse in the 21st century. Inequality engenders unhappiness when we compare our incomes to the increasing number of one-percenters and social media “influencers.” Additionally, extreme inequality is associated with a loss of opportunities, which can be immiserating.

War, Conflict, and Hate

As the experiences in Ukraine and Israel and Palestine keenly demonstrate, war and conflict remain an ever-present reality. The political divisions exacerbated by Donald Trump show that we are a house divided, while media hate entrepreneurs peddle hate and misinformation for their own profit, with little concern for how its damaging the commonweal.

Pandemics

Not much needs to be added here, but only to say that something we thought was a distant memory may now be part of our future.

Climate Change

Every year that we delay weaning ourselves off of fossil fuels means greater and greater damage, suffering, and uncertainty. The Climate Kraken has been released.

Looking Ahead

What happened along the way to end the dream of peace, prosperity, and happiness–the striving for utopia? This will be the subject of my next post. Stay tuned.

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^[1] Note for simplicity, I take the average national happiness. To get the average individual happiness would require weighting the national averages by their respective populations.

^[2] It seems anyone with a Twitter account is instantly an expert on everything, and they are all too quick to tell you that you are wrong and they are right, which is not good for our perceptions of self-worth.

March 26, 2018 by Jason Barr 13 Comments

Incentivizing YIMBY: Greasing the Wheels to Improve Cities and Happiness

Jason M. Barr March 26, 2018

First, answer this survey question:

On a scale of 0 to 10, please rate your satisfaction with life in general, where 0 means completely dissatisfied, 5 means neither satisfied nor dissatisfied, and 10 means completely satisfied.

What number did you say? If you are the “average” American, you would have answered “6.87,” which means somewhat satisfied overall. If you were the average Italian you would have said “6.00,” or if Russian you would have likely said “5.55.” If you live in one of the Nordic countries, your answer would be closer to “7.5” (placing you in the happiest countries on the planet).

The response to this survey question has become increasingly used as a measure of human well-being. Over time, and across many research studies, it has proved to be a strong indicator of the quality of people’s lives.

Happiness Studies

As the field of Happiness Studies has taken off, a deeper understanding of what makes us content has emerged. First, is people’s innate personalities. Some are born optimists while others pessimists. Studies that compare identical to fraternal twins find more variation in happiness ratings from the fraternal twins, demonstrating a substantial genetic component to life satisfaction. When big events occur, say winning a lottery or losing a loved one, the strong emotions from these are mostly fleeting; within a few months, people return to their baseline levels.

But, just as important is the social dimension to happiness. Despite our fascination with the lone hero (or antihero) traveling the countryside rescuing people from their misfortunes, the vast majority of us need to be around other humans.

Even free market capitalism, which pits all against all, depends on cooperation—that we will play by the same rules and neither steal, cheat, nor lie when competing against each other. That homo sapiens sapiens can achieve such vast quantities of wealth is a testament to its construction of what might be called a City of Trust—a vast complex of rules and social structures that allow us to live our lives with the belief that, on average, things will go as planned. More trusting societies are happier and happier people contribute more to the community.

The physical city—the places where we live, work, and play—is the great mediator between happiness, our social and economic needs, and trust.

The Policies of Immiseration

Ironically, the policies that we have demanded from our government may, in fact, be subsidizing our own immiseration. The promotion of single family, owner-occupied housing in the suburbs was originally an attempt to allow each family a tiny plot of utopia, separated from the chaos of the overcrowded city. Thus, modern living is characterized, for many people, by a dependence on the automobile and the hyper-separation of activities into many smaller segregated spheres—reside in one place, work in another, and play somewhere else.[1]

Take commuting. Economic theory says that long commutes will be tolerated because they allow for larger and cheaper housing in the suburbs. But, when shopping for a house, studies have shown, that people consistently make a mistake: they overestimate the satisfaction they will get from the larger house and undervalue the dissatisfaction they will get from commuting. When people realize their mistake, it is too late. They jointly sit alone in traffic—stuck in a Prisoner’s Dilemma of congestion.

Homeownership

Then there is the government promotion of homeownership. Owning a home is supposed to generate a bevy of socially desirable outcomes. In theory, homeowners are more likely to stay put and create more stable communities; and they are more likely maintain their housing and help preserve the physical quality of the neighborhood.

However, owning a home changes the way people feel about their house. No longer are they just concerned with shelter, but are also worried about preserving the value of their investment, which for many is their largest form of savings. Encouraging homeownership turns households into mini-investment corporations, who do not want to see any real or perceived threats to the value of their asset.

As a result, homeowners in residential neighborhoods have elected officials to represent their interests. The policies enacted come in the form of zoning regulations. As I have discussed elsewhere, in vast swaths of New York City, for example, it against the law for a homeowner to tear down her house and build an apartment building. Outside of the city, in the suburban hinterland, building restrictions are even more severe, often having rules that require quarter-acre minimum lot sizes.

In essence, the laws designed to protect the value of homes have locked-in a suburban, car-based status quo. Though homeowners sought this, they, perhaps unwittingly, have voted reduce their own happiness. (Not to mention the degree to which suburbanites disproportionately contribute to climate change.)

Happy Cities

A large body of research shows that the foot is the route to happiness. Living the bipedal life, it turns out, leads us to live as our evolution intended. We all know that walking is good for our health, but a life spent upright also enhances the quality of our social interactions. By slowing us down, walking forces us to stop whizzing past each other, and increases opportunities to get know our neighbors and generates more resources near our homes. Physical activity, it turns out, can also increase trust.

As discussed in the article, “Neighborhoods and Social Interaction,” by Scott Brown and Joanna Lombard, residents of mixed-use neighborhoods, for example, are more likely to walk than residents of residential-only neighborhoods. Research also suggests that young people in cities who live on blocks with more varied uses perform better in school. And just as importantly, increased walkability is associated with greater social connectedness. (I will also have more to say in future posts about the role of tall buildings in promoting well-being; though the issue remains controversial).

There is no shortage of good policy ideas that can help promote healthier and happier cities. Enrico Moretti, for example, stresses the need to improve educational access. Those with more skills obtain better jobs and increase their economic and social mobility. Richard Florida advocates for investments in public transportation and the densification of the city via changes in zoning rules. Charles Montgomery argues for improved urban design: that we can structure our physical environment to promote better social interactions, such as “pedestrianizing” busy streets, “bucolicizing” green spaces, and infilling in single family residential neighborhoods.

Incentivizing YIMBY

Ultimately, however, these plans may be doomed to remain in the bucket of good ideas. The biggest obstacles to reform are the fear of change, and the ever-looming prospect that this change will land somewhere near or in our backyards. This means that no reform is possible until those who are harmed by change are compensated or are incentivized to embrace it. In short, cities and states should adopt policies that grease the wheels of reform. Once households reduce their fears, the bigger ticket items will be easier to implement.

Here are a few suggestions to get the conversation started.

Not in My Backyard (NIMBY) Insurance

One policy proposal, put forth by William Fischel of Dartmouth College, is what I would call NIMBY Insurance. Homeowners should have the ability to buy an insurance policy that pays out if the value of their house declines because of changes in the neighborhood (and not from drops in the macroeconomy), independent of the actions of the homeowner. If a neighborhood is rezoned for say apartment buildings, people will have confidence that their investments are safe (though chances are their land values will rise from densification as a result and insurance wouldn’t be necessary anyway).

Renters Savings Accounts

Renting is often poo-pooed because people think they are wasting their money on shelter without getting any savings out of it. Despite this belief, there are mixed findings on whether owning a home is a better use of money. The costs of the mortgage, property taxes, and upkeep means that buying is not always a great deal.

One way to incentivize the demand for renting is through the use of tax-free renters savings accounts. The “nudge” literature shows that if you create a default option to contribute, people will not opt out. The idea here is that renters contribute say 3% of the rent bill to a savings account (and is embedded directly in the rent bill). The money can be used to help pay for college tuition or for covering the rent in case of a temporary loss of job (thus also reducing homelessness).

Eviction Vouchers

Densifying neighborhoods means getting people to move out of lower-density homes or apartment buildings so developers can build more housing at those locations. If a property owner empties her rental building to tear it down and erect a denser structure, the evicted occupants should get a voucher or payment from the municipality to move to another location in the same city (say the equivalent of one month’s rent), thus offering some compensation to make the move less of a burden.

Density Payments

Finally, another idea is that if a homeowner increases the number of units on his lot, say through subdivision, infill, or building a new structure, he can qualify for a density payment from the city or state, which can help defray the cost.

In short, until cities and states come up with some ways to make transitioning less painful, we will remain mired in the ocean of great policies without a way to swim to the happy shore.

What are your ideas? Feel free to offer them in the comments section below.

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[1] A whole genre of Hollywood movie depicts the quiet desperation of the middle-aged suburbanite including “The Graduate,” “American Beauty,” “The Ice Storm,” and “Polyester.”

January 31, 2018 by Jason Barr 4 Comments

The High Life? On the Psychological Impacts of Highrise Living

Jason M. Barr January 31, 2018

As the income of Planet Earth continues to rise, the construction of tall buildings proceeds apace. Many cities around the world are increasingly housing their residents in highrises. Skyscrapers are seen as way to provide shelter to growing urban populations without resorting to sprawl and which can potentially provide more park space, and other urban benefits.

In China, for example, the economic reforms instituted in 1978 have unleashed the greatest internal migration in world history. Millions of rural residents have moved to cities seeking employment in factories and the growing service sector. The city of Shenzhen in the Pearl River Delta was mostly farmland in 1980 and today is one of the world’s largest cities.

Highrise living in four Chinese cities. Clockwise from top left: Shenzhen, Changchun, Shanghai and Hong Kong. Photos by Jason M. Barr

In the United States, large cities, like New York and San Francisco, suffer from affordability problems; highrise construction offers a possible solution, as well as opportunities to make these cities more resilient against climate change.

Though highrise living can provide benefits to societies across the world, it begs the questions: what is it like to live in one, and is the experience positive or negative? Here, I aim to focus on one particular angle—the psychological dimension.

The Perceptions of Highrise Living

The perception in the United States about highrise living is decidedly mixed. On one hand, living in skyscrapers is seen as a status symbol. That one could afford to live in luxury apartment building in New York, Chicago, or San Francisco suggests power and status. As income inequality rises, tall living is increasingly used to show off wealth.

On the other hand, experiences in public housing projects have driven the perception that tall buildings for the poor are an unmitigated disaster. The Pruitt-Igoe complex, completed in St. Louis in 1956, looms large in the public consciousness. The segregation and concentration of the urban poor into the housing complex, combined with mismanagement, created an even worse environment than the old tenements they replaced. All 33 buildings—each only 11 stories—were demolished in the mid-1970s.

The Pruitt-Igoe housing project, completed in 1956 in St. Louis, was demolished in the mid-1970s, after the complex suffered from many social and economic problems.

The Consequences of Highrise Living

In 2007, Professor Robert Gifford of the University of Victoria, published an article, “The Consequences of Living in High-Rise Buildings,” in the journal Architectural Science Review. Dr. Gifford’s interest was to review the literature on the psychological impacts of tall buildings on their occupants. His manuscript surveys nearly 100 studies that investigate whether highrises improve or diminish well-being and mental health.

Each study focuses on answering a question about whether tall buildings increase or diminish one of the following dimensions: housing satisfaction, psychological stressors (“strain”), suicide, behavior problems, crime and fear of crime, positive social relations, or helpful child rearing.

Dr. Gifford’s literature survey appears to be, if not exhaustive, then representative of the field up until 2002. Given this, I performed a kind of meta-review of the articles by grouping the listed studies into one of three categories, based on his description of each one.

First is the “positive” group, where a study concludes that highrise living offers some positive outcome in people’s lives. The second is the “negative” group, where highrise living is found to make residents lives worse off in some respect. Third is the “mixed or neutral” category, where the results suggest either a benign outcome, or both positive and negative outcomes.

The Findings

The results were not encouraging. Of the 99 studies reviewed, only 17 measured a positive outcome for the research question; 55 measured negative effects, and 27 were mixed or neutral. Across these different categories, a large number of studies found that people living in highrises suffer from greater mental health problems, higher fear of crime, fewer positive social interactions, and more difficulty with raising their children.

For example, on highrise living and depression, Gifford writes:

More serious mental health problems have tenuously been related to building height. In an English study, mothers who lived in flats reported more depressive symptoms than those who lived in houses (Richman, 1974). Rates of mental illness rose with floor level in an English study (Goodman, 1974). Psychological symptoms were more often present in high rises (Hannay, 1979).

And on child rearing, he concludes:

The problems range from fundamental child development issues to everyday activities such as play. For example, a Japanese investigation (Oda, Taniguchi, Wen & Higurashi, 1989) concluded that the development of infants raised above the fifth floor in high-rise buildings is delayed, compared to those raised below the fifth floor. The development of numerous skills, such as dressing, helping and appropriate urination was slower. Children who live on higher floors also go outside to play less often (Nitta, 1980, in Oda et al., 1989).

The Caveats

Certainly, there is much to be concerned about. However, several caveats must be applied to the overall conclusions from the article (and which are discussed in Dr. Gifford’s article). First is that the bulk of the research has studied highrise living in declining U.S. cities in from the 1960s to 1980s in public housing projects. Public housing was an attempt at both social engineering and government provision of affordable housing. The Federal government required that the housing was only for the poorest of the poor and encouraged racial segregation.

If you study occupants in Pruitt-Igoe, for example, how much of what you are seeing is from the nature of the height of the building itself versus other architectural aspects? Or how much comes from the much larger, and potentially more serious, issues of the extreme concentration of poverty in isolated urban pockets, where jobs are declining, educational opportunities are lower, and racism rears its ugly head?

In fact, a review of the publication dates of the studies shows that the 1970s was a Golden Age for research on the psychological impacts of highrise living, just when the United States was realizing the horrible mistakes it made in its public housing policies. Now that many cities have stabilized their populations and reduced crime and urban blight, it is time to revisit the effect of building form on well-being. The increasing use of big data also offers tools not available in the first big wave of tall building research.

Number of studies on the psychological consequences of highrise living by decade, as discussed in Gifford, R. (2007). “The Consequences of Living in High-Rise Buildings.” *Architectural Science Review*, 50(1), 2-17. *Until 2002.

Disentangling Cause and Effect

Furthermore, the discovery of cause and effect between housing design and measures of psychological well-being is particularly challenging. People feel strongly about the kinds of housing they want, and, in general, they cannot be randomly assigned for experimental reasons. Randomly provided housing may engender a feeling of loss of control, which can diminish how they feel about that particular housing and about themselves.

As Professor Gifford points out, those groups subject to random assignment, such as members of the military and college students in dorms, are unrepresentative of the larger urban populations that we seek to understand. They know their housing is temporary and expect random outcomes as part of their personal experiences.

More broadly, when trying to tease out the effects of highrise living, we need to know how people acquired their housing in the first place. If public highrises, for example, are the most readily available form of cheap shelter, it may be that people chose to live in them, despite not preferring to be there. If lower income people have a higher proportion of mental health issues, then one might not able to disentangle whether highrise living was the cause or the effect of a particular problem.

Towards a More Livable Highrise

Despite these caveats, the literature on happiness and urban design, as well as the lessons learned from public housing, offer knowledge and experience for making cities more livable. Highrise living doesn’t need to be for everyone, but the key point is that, for many people, residing in the central city or close to transportation hubs, jobs, and urban amenities is important. A way to allocate these valuable locations is to build taller. Yet, if highrises are built only for the wealthy it contributes to the gentrification of neighborhoods and the loss of opportunities for those with lower incomes.

Dr. Gifford’s literature review also offers a useful guide to the things that are important to residents or that can promote suffering if not eliminated. People’s happiness and mental health depend on not only what happens in the street, but also what happens inside their residences, as well as the liminal spaces between street and residence.

First is a feeling of safety, as no one wants to live in a building that encourages criminal activity or violence within the structure. Just as importantly, is that people want their buildings or neighborhoods to foster positive social interactions—to have both a sense of community and social support in times of need. Children need access to play spaces, and other children. Residents also require proximity to nature and greenery.

Building the Future

Architects, engineers, and developers must work with government officials to find rules and inducements that can create highrises that satisfy people’s needs. Take child rearing, for example; as discussed above, many studies have shown that children have a harder time in highrises, presumably, because, by living higher up, they are farther away from the things they need for healthy development. Problems like this, through good design, could be mitigated, such as having community and play rooms spread throughout the building or encouraging mixed-use buildings that have schools and child-friendly resources on the lower (or upper) floors.

There is a growing awareness among real estate professionals that highrises need to provide not only shelter but also promote mental health and helpful social interactions. Architects are also trying to bring green spaces up into the buildings themselves. There is a nascent “greenwalls” movement, where plants and trees are attached to the facades of structures. The question becomes how to apply this technology across the income spectrum.

The aim of social science is not only to disentangle cause and effect, but also to learn from human actions and policies that worked and did not work. That the government’s experiences with the Projects backfired does not mean we should give up on public and/or highrise housing for lower income residents. Nothing is more important than housing that promotes good mental health, and we have an obligation to learn from our mistakes and make sure they don’t happen again.

December 10, 2017 by Jason Barr 1 Comment

Skyscrapers and Happiness: An International Comparison (Part I)

Jason M. Barr December 10, 2017

While skyscrapers are primarily built for their occupants, they, perforce, impose themselves on the urban fabric. We can, for example, look at the prices that people pay to rent or buy space within them to estimate their value to the tenants. However, what measures do we have about how they affect citizens more broadly?

It is important to know how skyscrapers contribute to the quality of life and our sense of well-being. Do they make us happy? While there are many angles to approach this question, the goal here is to take a “satellite view” and look at skyscrapers and the happiness of nations.

Economic Growth and Happiness

Arguably, the world’s first economist, Adam Smith, in 1776, advocated for individual entrepreneurship and competition as the road to national wealth. Since then, economists have seen their primary mission as understanding and promoting capitalism as the means to human prosperity. Of lesser concern has been that of happiness, and whether wealth leads to contentment.

Over the last several decades, however, economists have turned to this topic after economist Richard Easterlin discovered, in 1974, the so-called Easterlin Paradox: once nations achieve a certain threshold of income, happiness levels flatten, even though their gross domestic products (GDPs) continue to grow. In other words, once the anxieties of procuring food, clothing, and shelter dissipate, more incomes does not translate into more happiness, on average.

In 2012, the first edition of the annual World Happiness Report was published. Each year it provides a Happiness Index that measures the average life satisfaction of citizens of nations around the globe. The index is derived from seven variables: (1) per capita GDP (average income), (2) amount of social support given to citizens, (3) healthy life expectancy, (4) freedom to make life choices, (5) national generosity, (6) lack of corruption, and (7) national base-line levels (culture). These seven factors are shown to each contribute to residents’ sense of life satisfaction (see Figure 1).

Every year, the Nordic counties score the highest. This year it is Norway, last year it was Demark. Why? Because, first, they are rich countries, but, just as importantly, they also score high on social services, generosity, and trust. Interestingly, however, these countries have no skyscrapers (buildings taller than 150 meters).

Figure 1: Top 20 happiest nations on planet earth (and their causes). Source: World Happiness Report (2017).

Skyscrapers and Happiness

Is there a relationship between happiness and skyscrapers? If so, what is the direction of causality? Do skyscrapers affect people’s sense of well-being? Or, does happiness (or sadness) drive people to choose some kinds of building types over others? Here, I aim to explore the possible relationships by looking at each nation’s Happiness Index value and the height of its tallest building. An additional post, will focus on national happiness and the number of skyscrapers. Future posts will zoom in to look at the evidence at the city or individual level.

A key point here is that we can see if there are patterns across the world that might allow us to make some inferences, and lead to more specific investigations based on what the data show.

I offer the following hypotheses, and will then discuss theories that lead to them: (1) taller buildings increase people’s happiness; (2) taller buildings decrease people’s happiness; (3) happier people build taller buildings; (4) happier people build shorter buildings; (5) there is no relationship between the two.

Figure 2: Height of the tallest buildings in each country around the world. Source: https://i.redd.it/rq7e73n7q5fz.png.

Let’s start with the hypothesis #1. Tall buildings may engender national pride, as do sports arenas and other local monuments. That a nation can muster the resources to have a very tall building may give people a sense of place, which enhances their happiness levels.

Regarding hypothesis #2, if tall buildings are wasteful or simply just for plutocrats, they might engender feelings of anger and shame (as seems to be a common emotion with the super-tall luxury condos going up in Manhattan).

What about the other way around? For hypothesis #3, presumably, happier people express themselves more freely, and, it may be that taller buildings are expressions of this happiness.

Finally, for hypothesis #4, perhaps happier people are less concerned with conspicuous consumption, and the consumption rat race; super-tall structures may be seen as a form of this type of investment. As a result, happier people might eschew them and use their resources for experienced-based activities, such as say going out with friends or traveling.

The Evidence

We now turn to the evidence. For the interested reader, I provide details of the data sources, preparation, and statistical analysis. First, Figure 3 shows there is, in fact, a positive correlation between measured happiness levels and the tallest building completed in each of 141 countries around the world.

Figure 3: Scatter plot of tallest building in each country (in natural logs) versus its Happiness Index value. Note the correlation coefficient is 0.47. Trend line in black. Sources: Skyscraper Center and Emporis (for building height) and World Happiness Report.

In other words, the Nordic countries notwithstanding, happier countries also tend to have taller buildings, on average. The relationship is not, of course, one to one, and there is a significant amount of variation around the trend line, but the trend is there. For example, we would predict that a 10% increase in happiness from one country to another would be associated, on average, with a 14.6% increase in the height of that nation’s tallest building.

However, correlation is not causation; the next step is to perform a deeper statistical (regression) analysis to see if this relationship still holds after controlling for other factors that might, in fact, be driving both happiness and height.

Take national income (as measured by per capita GDP). It is a strong possibility that income is the true causal variable. If richer countries, on average, are happier than poorer ones, and if richer countries build taller buildings, then happiness-height relationship might, in fact, be specious.

To this end, I collected data on several key variables that are related to either happiness and/or skyscraper height and included them in the statistical analysis. The idea is to see if, after controlling for other important factors, such as population, income, human development (the HDI), and regional differences, the happiness-height relationships still appears.

And the answer is “yes.” In fact, I find evidence for a positive, two-way relationship between the two. That is to say, after controlling for other important variables, and performing a series of tests to make sure I carried out the correct statistical procedures, I find that taller buildings are positively linked with happiness, and that happiness is also positively linked with building height, on average.

So let me conclude by offering a possible theory, which further analysis can help confirm or deny: happier countries, on averages, express themselves by building taller, which, then, in turn, gives them a sense of national pride, which increases their happiness.