Before revision: Econometric analyses in the happiness literature typically use subjective well-being (SWB) data to compare the mean of observed or latent happiness across samples. Recent critiques show that comparing the mean of ordinal data is only valid under strong assumptions that are usually rejected by SWB data. This leads to an open question whether much of the empirical studies in the economics of happiness literature have been futile. In order to salvage some of the prior results and avoid future issues, we suggest regression analysis of SWB (and other ordinal data) should focus on the median rather than the mean.
After revision: The mean rank of happiness outcomes between groups has often been estimated using ordered probit and logit models. However, it has recently been highlighted that such ranking is not identified in most applications. Can we then learn anything from a mean rank between groups that is reported by standard statistical softwares such as STATA? We argue it can instead be interpreted as the median rank, which is identified even when the mean rank is not. We thus suggest focusing on ranking happiness outcomes (and other ordinal data) should focus on the median rather than the mean.