Each issue provides curious insights into happiness and how we might integrate happiness into measures of social progress.

Let’s begin with income growth. According to classical economics, more money allows for more consumption and this leads to higher utility. In studies of numerous countries using the World Values Survey and other large data sets, income and life satisfaction have a consistent relationship. Yet in China, the tremendous growth rates of 1990–2010 have actually seen self-reported life satisfaction scores decline. Trends suggest that people in China had higher life satisfaction in the aftermath of the nationwide uprisings and crackdowns of 1989 than in the next two decades of rapid growth.

Large-scale structural reforms to the Chinese economy between 1990 and 2010 resulted in substantial increases in unemployment that correlate neatly with trends in self-reports of diminished life satisfaction. This suggests that unemployment might be offsetting the gains from income growth. China’s contemporary urban environments also confront the relatively poor, including millions of rural migrant workers, with the reality of how poor they are, potentially resulting in unhappiness even as absolute incomes rise. Finally, there is adaptation, which is basically just the idea that we get used to things.

These explanations are reasonable but there is another more simple explanation for the counterintuitive result that income does not produce happiness: the data is bad. One explanation for this perplexing conclusion is rescaling. Life satisfaction is typically measured on scales, such as from one to 10. These scores are tracked over time. But no information is taken on the qualitative meaning of each number on the scale. It is possible that people are getting happier but are unable to communicate this because they cannot report changes in the meaning of these scales.

A study of Tongan migrants to New Zealand provides powerful evidence of rescaling. Before a visa lottery, all applicants are interviewed about their life satisfaction, reporting an average of about 8 out of 10. Two years after migration, those who moved to New Zealand and those who stayed behind are interviewed. Both groups report still being 8 out of 10 on average. But this study also asked respondents to reflect on how they felt two years before the lottery. Those who had to stay in Tonga say they were also 8 out of 10 at that time, whereas the migrants say they were 6 out of 10.

This suggests that the scales used by the migrants have changed. Their current 8 may be meaningfully higher than their previous 8, but they struggle to communicate this within the strictures of the scales. The enormous structural changes that take place during double-digit growth could be resulting in rapid rescaling. This might explain why income growth in Asia doesn’t seem to result in big changes in life satisfaction.

Asia also raises questions about the impact of collectivism on individual happiness. Self-determination is often foremost among postulates regarded as necessary for holistic wellbeing. This is achieved by orienting oneself towards those activities and values for which one possesses an intrinsic motivation. Meaning arises even more forcefully out of the affirmation of intrinsic values, such as in political action or principled living. But how can intrinsic motivations, which are grounded in individualism, satisfy such a social, even collectivist, need? The answer might lie in the importance of collective action for affirming intrinsic values.

While intrinsic values and motivations originate in the individual, their articulation and enactment is dependent on others. Consider the case of a vegetarian. While becoming a vegetarian is a personal decision, the process of refining this value requires a complex network of vegetarian industries and may involve social efforts to promote such a lifestyle. All of these actions depend on others even though the original motivation was personal. So in order to fully realise one’s intrinsic motivations it is necessary to engage in collective processes within a profoundly social world.

This is where individualism intersects with collectivism. The relatively more collectivist cultures of Asia provide some very important insights into these dimensions of wellbeing. Several studies, notably a recent investigation in Bangladesh, have underlined the importance of subjective psychological processes in collectivist cultures. Even individuals who place a strong importance on family, tribe, village and group identity nonetheless express a need for autonomy, voice and individual dignity. Yet the balance between individualism and collectivism in determining intrinsic aspirations can change across cultures.

How might these nascent ideas in wellbeing research be used to more efficaciously measure social progress? Perhaps we could use something like the gross national happiness (GNH) measure of the small Asian nation of Bhutan. GNH is comprised of a battery of metrics including income, culture, environmental quality, social capital, education and health. The drawback of GNH is that it is substantially just GDP with extra bells and whistles. It is not grounded in a theory of subjective wellbeing and remains oriented towards objective indicators of welfare. It is therefore open to the same criticisms as any wide-ranging collection of objective measures of welfare, such as the UN’s sustainable development goals.

Two criticisms of GNH are particularly telling. First, it is expensive to collect data on a myriad of objective development indicators and these additional indicators are very closely correlated with income growth. It is unclear that there is much of a net benefit to these complex metrics over and above simply measuring GDP. Second, turning a large range of metrics into a single value, as in GNH, requires the state to make value judgements about how to weight each input. This is open to political abuse. The propensity for such abuse is mitigated in Bhutan only by its small population, Buddhist monoculturalism and seemingly benevolent elites.

Wellbeing emerges out of psychological processes within individuals. Wellbeing research will therefore make its best contribution to metrics of social progress if we can develop a broad understanding of the subjective causes of wellbeing. This is a more effective goal than simply measuring an ever-expanding collection of objective things that are correlated with wellbeing, but do not cause it.

Mark Fabian is a doctoral candidate in economics at the Crawford School for Public Policy, The Australian National University.

A version of this article appeared in the most recent edition of East Asia Forum Quarterly, ‘Reinventing Japan’.