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MONEY, SEX AND HAPPINESS AN EMPIRICAL STUDY

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NBER WORKING PAPER SERIES MONEY, SEX AND HAPPINESS: AN EMPIRICAL STUDY David G. Blanchflower Andrew J. Oswald Working Paper 10499 http://www.nber.org/papers/w10499 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2004 For helpful suggestions, we thank three referees and James Konow, Ri..

    NBER WORKING PAPER SERIES

    MONEY, SEX AND HAPPINESS: AN EMPIRICAL STUDY

    David G. Blanchflower

    Andrew J. Oswald

    Working Paper 10499

    http://www.nber.org/papers/w10499

    NATIONAL BUREAU OF ECONOMIC RESEARCH

    1050 Massachusetts Avenue

    Cambridge, MA 02138

    May 2004

    For helpful suggestions, we thank three referees and James Konow, Richard Layard and Lynne Segal.The views expressed herein are those of the author(s) and not necessarily those of the National Bureau of Economic Research.

    ?2004 by David G. Blanchflower and Andrew J. Oswald. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including ? notice, is given to the source.

Money, Sex, and Happiness: An Empirical Study

    David G. Blanchflower and Andrew J. Oswald

    NBER Working Paper No. 10499

    May 2004

    JEL No. I1, J3

    ABSTRACT

    This paper studies the links between income, sexual behavior and reported happiness. It uses recent

    data on a random sample of 16,000 adult Americans. The paper finds that sexual activity enters

    strongly positively in happiness equations. Greater income does not buy more sex, nor more sexual

    partners. The typical American has sexual intercourse 2-3 times a month. Married people have more

    sex than those who are single, divorced, widowed or separated. Sexual activity appears to have

    greater effects on the happiness of highly educated people than those with low levels of education.

    The happiness-maximizing number of sexual partners in the previous year is calculated to be 1.

    Highly educated females tend to have fewer sexual partners. Homosexuality has no statistically

    significant effect on happiness. Our conclusions are based on pooled cross-section equations in

    which it is not possible to correct for the endogeneity of sexual activity. The statistical results should

be treated cautiously.

David G. Blanchflower

    Department of Economics

    6106 Rockefeller Hall

    Dartmouth College

    Hanover, NH 03755-3514

    and NBER

    blanchflower@dartmouth.edu

Andrew J. Oswald

    Department of Economics

    Warwick University

    UK

    andrew.oswald@warwick.ac.uk

    Money, Sex and Happiness: An Empirical Study

1. Introduction

    An emerging branch of economics has begun to examine the empirical determinants of

    happiness (for example, Easterlin 2001 and Frey and Stutzer 2002). This paper continues that

    avenue of research in a different sphere. It focuses on the -- still relatively unexplored -- links

between income, sexual activity and wellbeing.

    Human beings are interested in sex. There are also scientific reasons to study it. For

    example, recent work by Daniel Kahneman, Alan Krueger, David Schkade, Norbert Schwarz and

    Arthur Stone (Kahneman et al 2003) finds, among a sample of 1000 employed women, that sex

    is rated retrospectively as the activity that produces the single largest amount of happiness.

    Commuting to and from work produces the lowest levels of psychological wellbeing. These two

activities come top and bottom, respectively, of a list of 19 activities.

    In this paper we estimate what may be the first econometric happiness equations in which

    sexual activity is an independent variable. Like the rest of the recent wellbeing literature, we

    study the numbers that people report when asked questions about how happy they feel with life.

    Our data set is a randomly selected group of approximately 16,000 Americans. Although, for the

    sake of persuasive identification, it would be desirable to have instrumental variables for sexual

    activity, in this paper we follow the simpler route of providing single-equation estimates with no

    adjustment for possible endogeneity. Our instinct is that solving the endogeneity problem --

    working out whether sex causes happiness or causality runs in the reverse direction -- will be

particularly difficult here. Future work will have to return to this issue.

    There are limitations to wellbeing statistics. An inquiry in this field also faces the

disadvantage that controlled experiments cannot be done. To understand the connections

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    between happiness and intimate behavior such as sexual activity is likely to be particularly

    difficult. Nevertheless, it seems implausible that happiness can be understood without, in part,

    listening to what human beings say about their own lives and levels of happiness. This paper

examines such data.

    Surveys have for many years recorded individuals' responses to questions about well-

    being. They have been studied by psychologists1, sociologists and political scientists2, and

    more recently economists3. As yet, however, there seems to have been little attempt to link

happiness surveys to information on sexual behavior.

    There are similarities between our work and the earlier research of Edward Laumann4

and coauthors (Laumann et al 1994, Michael et al 1994). Laumann, Robert Michael and

colleagues collected sexual data on 3400 Americans at the start of the 1990s. Laumanns seminal

    research does not estimate the kinds of equations we do, nor focus on happiness data, but a

    number of our findings on sexual patterns -- particularly on frequency and numbers of partners --

replicate his research teams conclusions5.

2. Measuring Happiness

    How should we conceptualize happiness? One definition is the degree to which an

    individual judges the overall quality of his or her life as favorable (Veenhoven 1991, 1993).

1 Earlier work includes Andrews (1991), Argyle (1989), Campbell, Converse and Rodgers (1976), Campbell (1981), Chen and Spector (1991), Diener (1984), Diener et al (undated, 1999), Douthitt et al (1992), Fox and Kahneman (1992), Frisch et al (1992), Larsen et al (1984), Morawetz et al (1977), Mullis (1992), Shin (1980), Veenhoven (1991, 1993), Van Praag, Bernard and Kapteyn (1973), and Warr (1980, 1990).

    2 For example, Inglehart (1990) and Gallie et al (1998).

    3 However, see especially the modern work of Andrew Clark, Bruno Frey and Yew Kwang Ng (Clark, 1996; Clark and Oswald, 1994, 1996, 2002a; Frey and Stutzer, 1999, 2000; Ng, 1996, 1997). Blanchflower and Oswald (2004) is on some decades of British and US data. See also Easterlin and Schaeffer (1999), Frank (1985, 1997), Blanchflower (2001), Blanchflower and Oswald (1998, 2000), MacCulloch (1996), Di Tella and MacCulloch (1999), Oswald (1997, 2003), Di Tella et al (2001, 2003), and Winkelmann and Winkelmann (1998). Other recent work has been done by Graham (2001), Graham and Pettinato (2002), Gardner and Oswald (2001), Hollander (2001), Helliwell (2001), Johansson-Stenman et al (2002), McBride (2001) and Selnik (2002). Clark and Oswald (2002b) is a review written for epidemiologists.

    4 We thank referees for drawing our attention to this work.

    5 Other modern research by economists on sex includes Black et al (2003) and Moffat (2000).

    2

    Psychologists draw a distinction between the well-being from life as a whole and the well-being

    associated with a single area of life: these they term "context-free" and "context-specific".

    Our approach is to assume that people can decide for themselves how happy they feel.

    There has been debate in the psychology literature on whether a well-being measure can be -- in

    that literatures terminology -- reliable and valid. Self-reported measures are recognized to be a

    reflection of at least four factors: circumstances, aspirations, comparisons with others, and a

    person's baseline happiness or dispositional outlook (e.g. Warr 1980, Chen and Spector, 1991)).

    There is known to be a connection between the subjective and the objective. Konow and Earley

(1999) describes evidence that a persons recorded happiness levels are correlated with factors

such as:

1. Objective characteristics like unemployment.

2. The persons recall of positive versus negative life-events.

3. Assessments of the persons happiness by friends and family members.

4. Assessments of the persons happiness by his or her spouse.

    5. Duration of authentic or so-called Duchenne smiles (a Duchenne smile occurs when both the

    zygomatic major and obicularus orus facial muscles fire, and human beings identify these as

genuine smiles).

    6. Heart rate and blood-pressure measures responses to stress, and psychosomatic illnesses such

as digestive disorders and headaches.

7. Skin-resistance measures of response to stress

8. Electroencephelogram measures of prefrontal brain activity.

    As in Blanchflower and Oswald (2004), we refer readers to the checks on self-reported

happiness statistics that are discussed in Argyle (1989) and Myers (1993), and to psychologists

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    articles on reliability and validity, such as Fordyce (1985), Larsen, Diener, and Emmons (1984),

Pavot and Diener (1993), and Watson and Clark (1991).

    Although also based on the General Social Surveys, the Blanchflower and Oswald (2004)

study had no information on sexual activity. Generalizing that papers framework slightly, the

idea used here is that there exists a reported well-being function

    r = h(u(y, s, z, t)) + e (1)

    where r is some self-reported number or level (perhaps the integer 4 on a satisfaction scale, or

very happy on an ordinal happiness scale); u() is to be thought of as the persons true well-

    being or utility; h(.) is a function relating actual to reported well-being; y is real income; s is

    sexual activity; z is a set of demographic and personal characteristics; t is the time period; and e

    is an error term. As plotted in Figure 1, the function h(.) rises in steps as u increases. It is

    assumed, as seems plausible, that u() is a function that is observable only to the individual. Its

    structure cannot be conveyed unambiguously to the interviewer or any other individual. The

    error term, e, then subsumes among other factors the inability of human beings to communicate

accurately their happiness level (your two may be my three)6. The measurement error in

    reported well-being data would be less easily handled if well-being were to be used as an

independent variable.

    This approach is somewhat utilitarian, in the Benthamite sense, and is also reminiscent of

    the experienced-utility idea advocated by Kahneman et al (1997). The structure of equation 1

makes it suitable for estimation as, for example, an ordered probit or logit. In this way, true

    utility is the latent variable, and the subjectivity of responses can be thought of as going into the

6 We accept the social scientists traditional distrust of a persons subjective utility. An analogy might be to a time before human beings had accurate ways of measuring peoples height. Self-reported heights would contain information but be subject to large error. They would predominantly be useful as ordinal data, and would be more valuable when averaged across people than used as individual observations.

    4

    error term. For simplicity, this paper also reports various kinds of ordinary least squares

equations.

    It is possible to view self-reported well-being questions in the psychology literature as

    assessments of a persons lifetime or expected stock value of future utilities. Equation 1 would

then be rewritten as an integral over the u() terms. Nevertheless, this paper will use a

    happiness question that seems more naturally interpreted as a flow rather than a stock.

    Easterlin (1974, and more recently 1995, 2001) was among the first social scientists to

    study data over time on the reported level of happiness in the United States. One of his aims was

    to argue that individual well-being is the same across poor countries and rich countries. He

    suggests that we should think of people as getting utility from a comparison of themselves with

    others. Duesenberry (1949), Hirsch (1976), Scitovsky (1976), Layard (1980), Frank (1985,

    1999) and Schor (1998) have argued a similar thesis; see also Cooper, Garcia-Penalosa and Funk

    (2001), Ferrer-i-Carbonell (2002) and Keely (1999). A slightly different form of wellbeing data

has been used recently by Ravallion and Lokshin (2001).

    This paper draws upon the General Social Surveys of the United States. In order to

    obtain information on sexual behavior, income and reported happiness, we use cross-sections

    from the years 1988 to 2002 (though, because of missing variables, not every year is available

for regression equations). The key question asked is:

    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? (GSS Question 157)

    The same wording has been used in each year. It is known that there is a reasonable amount of

    stability in the proportion of people giving different well-being scores. The bulk of survey

respondents place themselves in the middle category pretty happy. Overall, approximately

    12% of Americans describe their lives as not too happy, while 56% say they are pretty happy,

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    and 32% say they are very happy. Most of our statistical work uses the ordering -- not a literal

or exact interpretation of the words.

3. Measuring Sexual Activity

    Before reporting the structure of the estimated happiness equations, it is useful to

describe the data sets information on sexual activity.

    This is a sensitive area about which to question people, but there is a body of knowledge

    on how best it can be done (see, for example, chapter 2 of Michael et al, 1994). Respondents in

    the GSS are asked how many sexual partners they had in the previous year, how many times they

    had sexual intercourse, and the gender of their sexual partners. The survey is confidential and

    face-to-face. As with other variables, there is likely to be measurement error in these sexual

    data. One bias might stem from bravado; people may wish to appear to the survey interviewer to

    be enjoying more sex than they do. Another might stem from modesty or a wish to conceal

    extra-marital affairs; this would tend to lead to under-reporting. Our instinct from examining the

    data is that, if anything, the former bias dominates, especially among men. Nevertheless, in this

    paper we take the numbers at face value and study the implied patterns in American society.

    According to our data, Americans have less dramatic sex lives than might have been

    imagined from television and other media. Table 1 provides cross-tabulations and describes the

    main patterns. The data set here is for a slightly longer span of years than in later regressions,

because not all survey questions are asked in every year.

    First, the median American adult has sex approximately 2 or 3 times a month (all the sex

    described in this paper refers to sex with a partner; masturbation is not discussed). Among those

    aged under 40 years old, the median individual has sex once a week. About 10% of under-40

    Americans say they have sexual intercourse at least 4 times a week. Approximately the same

    6

    proportion say they are celibate and have no sex. In the whole US population, 6% of adults say

they have sex 4 or more times a week, and 22% report having no sex.

    In the over-40 category, the frequency of sex is much lower. Among older women the

    median amount of sex is once a month, while for males it is 2-3 times a month (not shown

    separately in Table 1). We cannot tell whether this discrepancy is because males, relatively,

    have exaggerated memories, or have younger sexual partners, or visit female prostitutes. Among

    Americans over 40, 13% of women and 20% of men say they have sexual intercourse twice or

more times a week. A third of over-40s say they are celibate.

    Second, the modal and median American had one sexual partner last year. This is true

    for more than three quarters of both males and females (see Table 1). Although it might be

    thought that young people would have many more sexual partners than the old, only 11% of

    under-40 Americans reported themselves as having 3 or more sexual partners in the previous

    year. Subdividing this group by gender, among the under-40s 84% of US women and 70% of

    US men had at most one sexual partner in the previous year (not shown in the table). For this

    age group, 3% of US women and 10% of US men say they had 4 or more sexual partners in the

    previous year. Monogamy is dominant among the old. For those over the age of 40, 96% of

    women and 89% of men say they had at most one sexual partner in the last 12 months. And 40%

    of American females over the age of 40 did not have sexual intercourse in the previous year. The

figure for American males is 20%.

    Third, a small proportion of people in the GSS survey report homosexual activity.

    Among males, 2.6% say they had a male sexual partner in the previous year. Among females,

    just under 1.5% report having had a female partner. About 0.5% of females and 0.5% of males

report themselves as bisexual.

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    Fourth, Table 1 gives the happiness distributions for different groups in US society.

    Although it is not shown explicitly in the table, people who have no sexual activity are

    noticeably less happy than average. Happiness scores of people who had no sex last year (and

    are therefore classified as neither heterosexual nor homosexual) are: very happy, 23%; pretty

    happy, 60%; not at all happy, 17%. This contrasts with the numbers for the whole sample: very

    happy, 32%; pretty happy, 56%; not at all happy, 12%. We return to this issue, using regression

equations, in the next section.

    Fifth, a few men report large numbers of sexual partners (four males in our sample of

    approximately 7000 said they had more than 100 partners in the previous year, whereas no

    women said that, and only four women out of nearly 9000 reported having more than 20 partners

in the year). Taking the data set as a whole, almost the only way to make the mens and

    womens answers consistent is for there to be some women in the United States who have

    enormous numbers of sexual partners without reporting that fact in our survey data. It is

    possible that this is because of the existence of prostitutes. An alternative explanation is that

men tend to overestimate.

    Sixth, Table 1 does not find particularly strong correlations between sexual activity and

    education, nor between sexual activity and (perceived) high or low income. However, marriage

    and sexual frequency are highly correlated; unmarried people say they have much less sex than

    those who are married. Nine out of ten married Americans report a single sexual partner in the

previous year.

4. Happiness Equations with Sexual-Activity Variables

    Table 2 reports happiness equations for the United States using pooled cross-section data

    from 1988 to 2000. For simplicity, these assume cardinality and are Ordinary Least Squares

estimates where very happy is coded as 3, pretty happy is coded as 2, and not at all happy is

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