Harvard Public Health Review
Summer Fall 2006

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HSPH Report: China and India

What Money Can't Buy

For millions of rural Chinese, there's more to well-being than income

By many economic yardsticks, China is thriving. Since the country introduced market reforms in the late 1970s, gross domestic product has increased tenfold, and national household income has more than doubled in the last decade. But when Associate Professor of International Health Policy and Economics Chi-Man "Winnie" Yip leaves the Harvard School of Public Health to visit China, she asks the question: "Is people's well-being improved?" Yip is skeptical of economists' assumption that higher income necessarily leads to greater happiness. Income is "only a means of getting there," says Yip, who conceptualizes well-being as total human welfare, of which health is an important component.

"Many Chinese say, 'Twenty years ago, I would never have dreamed I could eat meat every other day,' " says Yip. "But they have other worries now." Families, long the core of Chinese society, are breaking apart as millions of mostly young adults migrate from rural areas to cities in search of work. Social relationships are changing; consumer expectations are rising. Socioeconomic disparities are rapidly emerging, even within small villages, and sources of security, such as health insurance and pensions, are limited or non-existent. According to Western research, such variables are important determinants of well-being. Yip asks: If the goal is improving people's welfare, "Is income growth the only way to do it?"

Yip doesn't think so. She and a team of economists, anthropologists, psychologists, and sociologists are documenting the consequences of China's shift to a market economy on the rural Chinese, who earn less than U.S. $350 a year. Their data could help identify policies to cushion against negative side effects of economic reform on people's well-being--an important goal, Yip says, not least because discontent can threaten social and political stability.

PIONEERING SURVEY
In 2004, Yip led a survey of 2,400 adults in three rural counties in the Shandong province to document how well-being is affected by income, relative social position, collective action, shared trust, social networks (reflected in the frequency with which people see friends), and health. The researchers found that the last three factors were strongly associated with people's responses to general "satisfaction with life" questions that measure subjective well-being. To build trust, Yip says, "It's important to start early, through education." Local governments--non-governmental organizations as well--might do well to encourage the forging of civic organizations that emphasize common goals over individual interests.

Survey respondents ranked themselves on a "social-standing ladder," marking their place relative to others in the community. People who compared themselves to urbanites ranked themselves lower than those who compared themselves to their fellow villagers, despite higher absolute income, Yip reports. For people who see themselves slipping down the ladder compared to better-off neighbors, well-being is declining. Yip says China's leaders may find in the data incentives to narrow the gaps between "haves" and "have-nots."

Last summer, with funding from the National Science Foundation, Yip returned to China to study the effect of villagers' migration on the well-being of those left behind. This time, she employed a new well-being measurement tool developed by a collaborator, Princeton psychologist Daniel Kahneman, called the Day Reconstruction Method (DRM). Based on the economist Jeremy Bentham's concept of utility, DRM asks people to reconstruct a typical day's activities and report feelings associated with each. Yip is particularly eager to analyze DRM data from the elderly, whose adult children increasingly are moving to urban areas, leaving their parents to fend for themselves as well as young grandchildren. "In China, few have pensions; old people have traditionally relied on their children," Yip explains. Poor, overworked, and in poor health, many complain of loneliness and depression.

A MUSHROOMING FIELD
Having expanded her survey from Shandong to the Sichuan and Anhui provinces, Yip plans to track 5,000 respondents every two years. While her study is the first of its kind in China, psychologists have researched happiness elsewhere for decades. Economists have long shied away from measuring this subjective state, but methodologies like Kahneman's make this slippery task feasible. In the last five years, the number of articles on happiness has "mushroomed," says Carol Graham, a senior fellow in the Economic Studies Program at the Brookings Institution in Washington, DC, who has led happiness studies in Peru.

The integration of psychology into economics "has gone from the margin to a lot of people interested," Graham says. In 2002, Kahneman won the Nobel Prize in Economics for his contributions to the field. And in a 2004 paper, two leading U.S. psychologists proposed creating a "national well-being index" that goes beyond standard economic measures, which, they argue, neglect much of what society values. According to Graham, such an index "could be a complementary measure that would weigh into creating policy."

The well-being literature of Western societies suggests that income and material goods have little lasting effect on well-being, Yip says. The next step for rural China is to find out what will.

Katharine Dunn has written about science and health for Harvard Magazine, the Boston Globe, and Technology Review.

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