Monica Guillen-Royo

Happy Villages and Unhappy Slums? Understanding Happiness Determinants in Peru

Generally, people living in rural areas declare they are happier than people living in cities. This is particularly significant in Peru, a South American country with great levels of inequality and traditionally low levels of reported happiness. This chapter investigates differences in levels of reported happiness between urban and rural Peruvians using regression analysis to test two hypotheses. The first concerns the possibility that urban dwellers are unhappier because of their higher emphasis on social comparison. The second one is related to the different understandings people have about the meaning of happiness. It argues that people living in cities who do not internalise concepts of happiness linked to extrinsic or materialist values will be less happy than those who adapt to a materialist environment. Using data from seven communities in Peru, the study finds that the two hypotheses partially explain the differences in happiness between rural and urban Peruvians. Further research using country-representative data is needed to confirm these findings.

Economic Welfare, Poverty, and Subjective Wellbeing

This chapter explores empirically the relationship between indicators of economic wellbeing (principally household income) and subjective wellbeing (SWB). Past research indicates that at low levels of income the relationship between economic and subjective indicators of wellbeing is positive and strong (e.g., Veenhoven, 1991; Diener et al., 1999; Hirata, 2001). However, economic indicators, such as income, usually explain only a low proportion of the interpersonal variation in SWB: a correlation coefficient of 0.45, in their study of slum dwellers in Calcutta, being the highest encountered in the literature by Biswas-Diener and Diener (2001). Such research has also mostly been restricted to using standard measurses of global happiness or satisfaction with life (Frey and Stutzer, 2002a; 2002b; Kingdon and Knight, 2006), and this chapter points beyond this toward analysis of the relationship between economic indicators and a eudaimonic view of wellbeing based on satisfaction with achievement of locally defined goals. We start with a brief review of existing literature linking economic indicators and SWB in Peru. Section 4.2 then presents data on household income, expenditure, and head count poverty incidence in each of the seven research sites. Section 4.3 analyzes the relationship between household economic indicators and reported happiness of a subsample of adults belonging to the same households.

Wellbeing and Sustainable Consumption

This chapter challenges the apparent contradiction between wellbeing and ecological sustainability based on the non-satiation and individualist maximization assumptions in conventional economics. It focusses on sustainable consumption, first because consumption and wellbeing are intimately related and second because consumption in the rich and emerging countries is contributing to a number of serious environmental problems, including climate change. Evidence from wellbeing research suggests that the relationship between consumption and wellbeing is neither lineal nor positive, and that individual’s wellbeing is highly correlated with that of friends, family and the environment. This evidence supports a reconceptualization of the relationship between consumption and wellbeing that draws on an alternative approach that encompasses the social, economic, technological, natural and political contexts that support habitual behavior. Once the importance of habits is acknowledged, sustainability research and policy need to be rethought to investigate societal processes, such as the ones currently at work in transition towns, which have the potential to promote both wellbeing and the environment.