Justin Wolfers’ column titled “Debunking the Easterlin Paradox, Again” dismisses Richard Easterlin’s work as just plain wrong. I argue here, as I have elsewhere, that where you come out on the Easterlin paradox depends on the happiness question (and therefore the definition of happiness) that you use, as well as the sample of countries and the period of time.

Richard Easterlin finds no clear country-by-country relationship between average per capita GDP and life satisfaction (among wealthy countries), despite a clear relationship between income and happiness at the individual level within countries. Easterlin also found – and continues to find, based on methods different from Wolfers’ – an absence of a relationship between life satisfaction and long-term changes in GDP per capita.

Different well-being questions measure different dimensions of “happiness”, and, in turn, they correlate differently with income (something they themselves show at the end of their last paper, and admit that the relationship between income and well-being is complex). The best possible life question – which Justin Wolfers and Betsey Stevenson primarily use in the first work, and also in the second – asks respondents to compare their life today to the best possible life they can imagine for themselves. This introduces a relative component, and, not surprisingly, the question correlates most closely with income of all of the available subjective well-being questions. Life satisfaction, which they use in the second work, also correlates with income more than open-ended happiness, life purpose or affect questions, but not as closely as the best possible life question.

Wolfers and Stevenson used the most recent and extensive sample of countries available from the Gallup World Poll, and, as the measure of “happiness”, the best possible life question therein, and challenged the Easterlin paradox. In more recent work, with Stevenson and Dan Sacks (2010), referenced in this blog, the authors look at the relationship between life satisfaction and economic growth, based on the World Values survey and GDP levels and the best possible life question, based on the Gallup World Poll. They isolate a clear relationship between life satisfaction and GDP levels, and their statistical analysis is spot on.

Recent studies by Kahneman and Deaton (2010), and Diener and colleagues (2010), for example, find that happiness in a life evaluation sense (as measured by the best possible life question) correlates much more closely with income than does happiness in a life experience sense (as measured by affect or more open ended happiness questions). This holds within the United States (Kahneman and Deaton) and across countries (Diener et al.).

My own work on Latin America, with Soumya Chattopadhyay and Mario Picon, tested various questions against each other and finds a similar difference in correlation, with affect and life purpose questions having the least correlation with income and the best possible life question the most. My work on happiness in Afghanistan found that Afghans were happier than the world average (on par with Latin Americans) as measured by an open ended happiness question, and 20 percent more likely to smile in a day than Cubans. Yet they scored much lower than the world average on the best possible life question. This is not a surprise. While naturally cheerful and able to make the best of their lot, the Afghans also know that the best possible life is outside Afghanistan.

Thus the conclusions that one draws on whether there is an Easterlin paradox or not in part rest on the definition of happiness, and therefore the question that is used as the basis of analysis. Wolfers and co-authors find a clear relationship between GDP levels and life satisfaction and best possible life – clearly important dimensions of well-being. Yet in the same paper they find much less clear relationships when they use happiness, affect and life purpose questions.  

There is also the question of the sample of countries, and whether one is examining cross section or time series data. The most recent debate with Easterlin is about the trends over time rather than cross-sectional patterns. Dropping the transition economies, as Easterlin does, may be a mistake, as Wolfers contends. But it is also important to recognize the extent to which including a large sample of countries that experienced unprecedented economic collapse and associated drops in happiness alters the slope in the cross-country income-happiness relationship (making it steeper). Wolfers also criticizes Easterlin for relying on financial satisfaction data for his Latin American time series sample (because there is not enough life satisfaction data); financial satisfaction correlates closely, but not perfectly, with life satisfaction. Easterlin’s technique allows for the inclusion of a much larger sample of middle income developing countries, a sample of countries that one can imagine is very important to the growth and happiness debate. Wolfers and co-authors use far fewer Latin American countries because comparable life satisfaction data is limited. Either approach is plausible and, as with all work with limited data, is not perfect. But I would not go as far as calling one or the other “plain wrong”.

Finally, there is the simpler question of giving credit where credit is due. We would not be having this debate, nor would we have a host of analysis on well-being beyond what is measured by income, had Easterlin not triggered our thinking on this with his original study of happiness and income over three decades ago (and his patient and thoughtful mentoring of many economists since then). In the big picture of things, Easterlin had the idea.

Justin Wolfers, professor of Economics and Public Policy at the University of Michigan, re-joins Brookings, Vice President and Economic Studies Co-Director Karen Dynan announced today.  Wolfers was a visiting fellow from 2010-2011.

A world-renowned empirical economist, Wolfers will continue in his role as co-editor, along with David Romer of the University of California, of the Brookings Papers on Economic Activity (BPEA), the flagship economic journal of the Institution.  He will continue his focus on labor economics, macroeconomics, political economy, economics of the family, social policy, law and economics, public economics, and behavioral economics. His appointment as senior fellow will last 13 months.

Wolfers is also a research associate with the National Bureau for Economic Research, a research affiliate of the Centre for Economic Policy Research in London, a research fellow of the German Institute for the Study of Labor, and a senior scientist for Gallup, among other affiliations. He is a contributor for Bloomberg View, NPR Marketplace, and the Freakonomics website and was named one of the 13 top young economists to watch by the New York Times.  Wolfers did his undergraduate work at the University of Sydney, Australia and received his Master’s and Ph.D. in Economics from Harvard University.  He is a dual Australian-U.S. national and was once an apprentice to a bookie which led to his interest in prediction markets. 

“We are pleased to re-welcome Justin back to Economic Studies,” said Dynan. “His work continues to challenge the conventional wisdom, and we look forward to collaborating with him once again.” 

“Justin is outstanding at communicating economic ideas to a wide audience, as evidenced by his regular writings for media as well as his large social media presence,” added Ted Gayer, co-director of Economic Studies.

“I have enormous affection for the Brookings Institution, which provides not only a home for deep scholarly research, but also an unmatched platform for engaging the policy debate,” said Wolfers.  “The Economic Studies program has a rich history of being the go-to place for policymakers, and I look forward to coming back and engaging in debate with my colleagues there.”

The horrible tragedy in Orlando is rightly focusing attention on the threat posed by lone wolf terrorists—that is, radicalized individuals or couples who carry out attacks like those in Boston, San Bernardino, and Orlando. Yet there is a greater threat to the national well-being from small groups of terrorists, we can call them wolf packs, that could bring much greater carnage. If America's Muslim community is scapegoated and ostracized, the wolf pack threat will grow.

The idea of lone wolf attacks goes back well before the emergence of the self-styled Islamic State two years ago. The New Mexico-born radical Anwar al Awlaki urged individual Muslim Americans to carry out mass casualty attacks years ago. His English-language web magazine “Inspire” was the vehicle for self-radicalized extremists to learn how to make bombs and conduct violent jihad. The Fort Hood shooter was his disciple. Awlaki's message is still virulent despite his death by drone in Yemen in 2011.

More recently, Hamza bin Laden, the son of al-Qaida's founder, has issued two messages from his hide-out in Pakistan urging lone wolf attacks in Europe, America and Israel. The first came out a year ago and included the endorsement of Ayman Zawahiri. The second came out last month.

The Orlando shooter paid little attention apparently to the differences between radical Islamic organizations. He reportedly praised the Shiite Hezbollah, Sunni al-Qaida, and the Islamic State. The message of jihad is so pervasive now that has become a part of the global dialogue.

As deadly as the Orlando shooting was, it is not hard to envision worse given the horrific attacks in Paris and Brussels this year. Organized conspiracies of a relatively small number of extremists prepared to die in their attacks can do far more damage than individuals or couples.

Organized conspiracies of a relatively small number of extremists prepared to die in their attacks can do far more damage than individuals or couples.

The role model of a wolf pack attack was the November 26, 2008 attack in Mumbai. A pack of ten well-armed and trained Pakistani terrorists attacked simultaneously and sequentially luxury hotels, fancy restaurants, a train station, and a Jewish hostel. Westerners and Israelis were singled out for attack but the majority of victims were innocent Indians. The operation even had a secure command post back in Pakistan where the terrorist handlers from Lashkar e-Tayyeba and Pakistani intelligence coordinated the plot by cell phones.

The Paris attacks imitated many of the Mumbai tactics and added suicide vests to the mix. The Islamic State took the Mumbai model to Europe. It no longer required a foreign base like Pakistan, the conspiracy operated in the depressed Islamic slums of Brussels and Paris where the security services had few sources. 

The closest to a wolf pack attack in the United States was an al-Qaida plot in 2009 to attack the New York City subway system. That was foiled because our intelligence services detected the conspiracy. 

Islamophobia is the path to more catastrophic violence.

By definition, conspiracies involving even small numbers of plotters are easier to detect than lone wolves. The first line of detection is the local Muslim community where the plot is hatched. When local communities become angry pockets separated from the rest of the nation, it is much harder to find and foil conspiracies. In Europe, unfortunately, there are many such disaffected Islamic communities. America doesn't have them, at least not yet.

That fastest and surest route to wolf pack conspiracies in America is to scapegoat all Muslims and create an angry jihadist sub-culture. That is why calls for prohibiting Muslim travel to America are so dangerous and counter-productive. It will inevitably create a backlash. Islamophobia is the path to more catastrophic violence.

The man who drove a truck through packed crowds celebrating Bastille Day, killing more than 80, may have acted alone, according to the early reports. We don't know if he was inspired by a jihadist ideology or linked to any specific group. In any event, these extremist groups are increasingly embracing a "lone wolf" approach, and the West should prepare for more such attacks.

I've argued that such lone wolf" attacks are deadly but often fail in the long-term. Part of the reason is that historically many are poorly prepared and incompetent, bungling the attack or at least not killing as many as a more skilled and trained individual might.

Yet the horrific body count in Nice, along with the 49 dead in recent Orlando nightclub shooting, shows how deadly even an unskilled loser like Omar Mateen can be.

This deadliness is not new – Timothy McVeigh and Terry Nichols, largely acting alone, killed 168 people when they bombed the Alfred P. Murrah Federal Building in Oklahoma City in 1995 – but it suggests the potential lethality of lone wolves.

A Weaker Islamic State

The Islamic State is putting more emphasis on lone wolves out of desperation.

In the past, it urged its sympathizers to go to Syria to help the fledgling state defend itself and expand. However, the United States, France, and other countries and local fighters hitting hard at the Islamic State's core in Iraq and Syria. Other major areas of operations, like the Islamic State's "province" in Libya, are also under siege. The self-proclaimed state is short of funds, and the number of foreign recruits is declining.

Like all terrorist groups, the Islamic State needs victories to inspire new recruits and prevent existing members from losing hope. CIA Director John Brennan foresaw this in testimony and warned, "as the pressure mounts on [ISIS], we judge that it will intensify its global terror campaign to maintain its dominance of the global terrorism agenda."

A silver lining is that lone wolf terrorism, even if lethal, usually fails in a strategic sense. As one IRA terrorist said, "you don't bloody well kill people for the sake of killing them."

Violence with no strategy behind it terrifies, but it can backfire against a group and the cause it embraces. McVeigh and Nichols, for example, discredited other far right movements. McVeigh claimed he was dealing a blow against a tyrannical government, but the death of 19 children and three pregnant women in the bombing made it hard even for anti-government zealots to defend him.

In Nice, the driver killed children out to watch the fireworks, and the dead included innocent Muslims, like the grieving young man asking Allah to accept his mother into heaven may (and should) become the face of the attack, hardly a heroic move in a holy war that would inspire others.

Although the Islamic State's moves smack of desperation, that is no comfort to anyone concerned about terrorism.

Difficult To Prevent

Terrorist groups that draw on foreign fighters or otherwise are organized tend to be more deadly and dangerous in the long-term, but lone wolves are exceptionally hard to stop. The very organizational connections that give most terrorism direction are by definition lacking, and thus it is harder to find and disrupt the attacks. So more attempts, and likely some successful ones, seem inevitable.

One clear recommendation – and the one least likely to be heeded in the aftermath of a terrorist attack – is to ensure community support. If a community has good relations with the police and society in general, it has fewer grievances for terrorists to exploit and is more likely to point out malefactors in their midst.

Even though he was never arrested, Mateen came to the FBI's attention because a local Muslim found him worrisome. In France in particular, however, relations between the Muslim community and the government are often poisonous, and a terrorist attack will probably make this worse as France's already popular far-right movement becomes strong. And this will only mean more lone wolves will slip through in the future.

This piece originally appeared on NPR's Parallels.

Justin Wolfers, professor of Economics and Public Policy at the University of Michigan, re-joins Brookings, Vice President and Economic Studies Co-Director Karen Dynan announced today.  Wolfers was a visiting fellow from 2010-2011.

A world-renowned empirical economist, Wolfers will continue in his role as co-editor, along with David Romer of the University of California, of the Brookings Papers on Economic Activity (BPEA), the flagship economic journal of the Institution.  He will continue his focus on labor economics, macroeconomics, political economy, economics of the family, social policy, law and economics, public economics, and behavioral economics. His appointment as senior fellow will last 13 months.

Wolfers is also a research associate with the National Bureau for Economic Research, a research affiliate of the Centre for Economic Policy Research in London, a research fellow of the German Institute for the Study of Labor, and a senior scientist for Gallup, among other affiliations. He is a contributor for Bloomberg View, NPR Marketplace, and the Freakonomics website and was named one of the 13 top young economists to watch by the New York Times.  Wolfers did his undergraduate work at the University of Sydney, Australia and received his Master’s and Ph.D. in Economics from Harvard University.  He is a dual Australian-U.S. national and was once an apprentice to a bookie which led to his interest in prediction markets. 

“We are pleased to re-welcome Justin back to Economic Studies,” said Dynan. “His work continues to challenge the conventional wisdom, and we look forward to collaborating with him once again.” 

“Justin is outstanding at communicating economic ideas to a wide audience, as evidenced by his regular writings for media as well as his large social media presence,” added Ted Gayer, co-director of Economic Studies.

“I have enormous affection for the Brookings Institution, which provides not only a home for deep scholarly research, but also an unmatched platform for engaging the policy debate,” said Wolfers.  “The Economic Studies program has a rich history of being the go-to place for policymakers, and I look forward to coming back and engaging in debate with my colleagues there.”