Journalist and Writer
Hilary Wilce specialising in all aspects of education
Image of Hilary Wilce

Why Happiness Is Good For Business

Published By: The Independent - 03 Jun 2010

The world of economics and finance changed forever with the global crash of 2008, and Warwick Business School has planted itself firmly on the front line of the new order by appointing polymath academic Andrew Oswald as its new pro dean for research and professor of behavioural science.

He will be setting up a group looking at how behavioural science can be applied to business and finance, working in the area where psychology, organisational behaviour, neuroscience, sociology, management, economics and finance all meet. “It’s a really exciting opportunity to able to build a cross-disciplinary group hiring from a range of backgrounds,” he says.

This is the first academic appointment by the business school’s new dean, Mark Taylor, who comes from a high-flying asset management background and says: “It’s time to get real. My experience drove home to me that there are forces at work in the financial markets and in the economy more generally that just aren’t captured by traditional economic and financial models.” Andrew Oswald agrees. “It’s an interesting challenge to figure out why and where conventional economics went wrong. We have to change. Burying our heads in the intellectual sand and not budging will just end in us all being drowned.”

He is the ideal head of such a venture. Although trained as an economist, he has spent much of his career working on questions of human happiness and has always drawn widely on data from different disciplines. His lively and often iconoclastic writings encompass major topics such as student fees to job satisfaction, but also explore many unusual byways, such as the cleanliness of public toilets and whether parents who have daughters are more likely to be politically left-leaning than those who don’t.

In speech, though, he tends to be formal and guarded, and has something of a reputation for not suffering fools gladly -- not surprising for someone whose work has consistently placed him ahead of the curve. He was the original ‘Dr Doom’, predicting the house price crash years before it happened, and began to explore the subject of happiness decades before it edged into mainstream debate. “In fact this has happened more quickly than I expected and I believe it’s because most of us are becoming instinctively aware of the tremendous pressures we are under in our everyday lives.” Both his grandfathers were engineers at Rolls Royce, he says. “I’m probably five times better off than they ever were, but they never had the kind of mental pressures that we are all now under.”

His recent work includes an exploration of the links between happiness and productivity. “I believe we’ve developed the first really good test of the relationship between these two things. We gave some people a small ‘happiness shock’, by showing them a clip of a comedy. Others were the placebo group, and had no movie, and there was another group who had suffered what you might call major life shocks, such as illness or bereavement. Then they were all asked to do some white-collar problem-solving tasks.” The results showed clearly not only that the happier people were significantly more productive than unhappy people, but also that people who had been very unhappy slowly adjusted and grew more productive again over time.

Andrew Oswald was formerly professor of economics at the university and is just settling into his new home where there is business school jargon to learn “and where people come from a much wider range of backgrounds than where I was before.” But he does not anticipate coming up against commercial pressures on his work. “I’ve never been constrained in that way in the past, and I would have thought there are enough people in the world who are interested in findings that are generally useful to mankind for that not to be a problem.”

Last year he served on the Commission on the Measurement of Economic Performance and Social Progress, set up by French President Sarkozy and chaired by the Nobel Prize-winning economist Joseph Stiglitz, to investigate new and more holistic ways of measuring human development. He is also on the editorial board of the leading American journal Science, and expects that future significant developments are likely to emerge out of the coming together of the soft and hard sciences, as economists and social scientists start to look more closely at physiological data.

Over the years he has often been consulted by politicians “and I certainly understand the political process and how it works. At present one of our two new leaders is very interested in my work, but I wouldn’t want to say any more than that.”
Now he is starting to turn his attention towards questions of risk – “in particular what makes some people look after themselves for fifty years, so they are likely to get twenty more years of life as a result, while a lot of people repeatedly indulge in risky health behaviours.” Smoking, drinking, drug-taking and obesity could all be in his sights in coming years. “In the West we’ve solved all the old illnesses, but now we’ve got diseases of choice and I have a hunch it’s all to do with how human beings perceive their level of satisfaction. What I’m interested is the ‘rational carelessness’ with which some people live their lives.”

So how happy is he himself? A rare smile breaks through. “I feel I’m a very lucky man. I’m paid to think – and what could be better than that.”


Born 1953. Childhood in Australia and Scotland
Education: Stirling, Strathclyde and Oxford Universities
Career: Academic posts at Princeton, Stockholm, Dartmouth, LSE, Harvard, Oxford, Cornell and Zurich
Most recent post: Professor of Economics, University of Warwick
Likes: cliff walking in Wales, wine, racquet sports and debates
Dislikes: people who are grudging about the achievements of other
What reading now: ‘I work from eight to eight absorbing words and haven’t read anything for leisure for years.’
Relaxes by: watching football, chatting, exercise