November 29, 2012
The Economic Case Against Winning a $500 Million Lottery (Seriously.) It’s all about the psychological power of adaptation and relativity with money. Adaptation: At first, the thrill of becoming millions of dollars richer is, well thrilling, but after a while, the thrill wears off. Relativity: Winning the lottery creates an indelible memory, a comparison point, that makes typical life events seem disappointing and boring. Money can buy happiness, if you know how to spend it, but the incidence of winning the lottery does not, on its own, buy much happiness at all. In the long-term, it can be a net cost to life satisfaction. Read more. [Image: Reuters]

The Economic Case Against Winning a $500 Million Lottery (Seriously.)

It’s all about the psychological power of adaptation and relativity with money. Adaptation: At first, the thrill of becoming millions of dollars richer is, well thrilling, but after a while, the thrill wears off. Relativity: Winning the lottery creates an indelible memory, a comparison point, that makes typical life events seem disappointing and boring. Money can buy happiness, if you know how to spend it, but the incidence of winning the lottery does not, on its own, buy much happiness at all. In the long-term, it can be a net cost to life satisfaction.

Read more. [Image: Reuters]

11:17am
(Notes: 66)
  
Filed under: Lottery Economics Business Happiness 
August 14, 2012
Iceland: Superlative Happiness on a Cold Little Rock Icelanders have been resilient and stoic in the face of disasters like volcanic eruptions, earthquakes, and the 2008 financial collapse that hit this tiny country hard. “The stoicism is important to deal with the randomness of nature and the recent financial crash,” Iceland embassy counselor Erlingur Erlingsson told me in Washington, D.C. Beyond stoicism, though, Iceland ranks as the third happiest country in the world — just behind Denmark and Costa Rica, according to the World Database of Happiness through 2009. […] How do Icelandic people find the mental and physical resilience, in the face of winter darkness, volcanic eruptions, and financial disaster, to be among the first in global measures of happiness? Read more. [Image: Reuters]

Iceland: Superlative Happiness on a Cold Little Rock

Icelanders have been resilient and stoic in the face of disasters like volcanic eruptions, earthquakes, and the 2008 financial collapse that hit this tiny country hard. “The stoicism is important to deal with the randomness of nature and the recent financial crash,” Iceland embassy counselor Erlingur Erlingsson told me in Washington, D.C. Beyond stoicism, though, Iceland ranks as the third happiest country in the world — just behind Denmark and Costa Rica, according to the World Database of Happiness through 2009. […]

How do Icelandic people find the mental and physical resilience, in the face of winter darkness, volcanic eruptions, and financial disaster, to be among the first in global measures of happiness?

Read more. [Image: Reuters]

4:02pm
(Notes: 116)
  
Filed under: Iceland Happiness 
June 1, 2012
The 10 Things Economics Can Tell Us About Happiness 1) Generally speaking, richer countries are happier countries (see above). But since many of these rich countries share other traits — they’re mostly democracies with strong property rights traditions, for example — some studies suggest that it’s our institutions that are making us happy, not just the wealth. More on that in a second. 2) Generally speaking, richer people are happier people. But young people and the elderly appear less influenced by having more money. 3) But money has diminishing returns — like just about everything else. Satisfaction rises with income until about $75,000 (or perhaps as high as $120,000). After that, researchers have had trouble proving that more money makes that much of a difference. Other factors — like marriage quality and health — become more relatively important than money. Read the rest. [Image: new economics foundation]

The 10 Things Economics Can Tell Us About Happiness

1) Generally speaking, richer countries are happier countries (see above). But since many of these rich countries share other traits — they’re mostly democracies with strong property rights traditions, for example — some studies suggest that it’s our institutions that are making us happy, not just the wealth. More on that in a second.

2) Generally speaking, richer people are happier people. But young people and the elderly appear less influenced by having more money.

3) But money has diminishing returns — like just about everything else. Satisfaction rises with income until about $75,000 (or perhaps as high as $120,000). After that, researchers have had trouble proving that more money makes that much of a difference. Other factors — like marriage quality and health — become more relatively important than money.

Read the rest. [Image: new economics foundation]

10:39am
(Notes: 128)
  
Filed under: Economics Money Happiness Graphs Charts Jobs 
May 17, 2012
What We Know Now About How to Be Happy Are “happy” people set up differently to begin with? For example, their physiologies seem to be different from those of less happy people, with lower levels of the stress hormone cortisol, reduced inflammatory biomarkers, and even changes in the wiring of the brain. All of these differences might make happy people better able to deal with the adverse events that life throws at them, and less likely to feel the effects of stress, which takes a toll on everybody’s health. The happiness-health relationship is at the very least a two-way street. But what is happiness in the first place? Is it about seeking out activities that make us feel good - indulging a fancy car or going out for a satisfying dinner - or does it have to do with a deeper sense of personal satisfaction over the course of a lifetime? Read more. [Image: skippyjon/Flickr]

What We Know Now About How to Be Happy

Are “happy” people set up differently to begin with? For example, their physiologies seem to be different from those of less happy people, with lower levels of the stress hormone cortisol, reduced inflammatory biomarkers, and even changes in the wiring of the brain. All of these differences might make happy people better able to deal with the adverse events that life throws at them, and less likely to feel the effects of stress, which takes a toll on everybody’s health. The happiness-health relationship is at the very least a two-way street.

But what is happiness in the first place? Is it about seeking out activities that make us feel good - indulging a fancy car or going out for a satisfying dinner - or does it have to do with a deeper sense of personal satisfaction over the course of a lifetime?

Read more. [Image: skippyjon/Flickr]

2:20pm
(Notes: 146)
  
Filed under: Happiness Science Biology Mood Emotion 
February 21, 2012
Your Sugar Addiction is Killing You Substances of abuse used to be the subject of much hand-wringing. It started with opium dens, moved to speakeasies, then to crack houses, then to “smoking permitted” anterooms. Since Nancy Reagan’s “Just Say No,” the war on drugs has taken a back seat, but not because it has been won. Rather, because a different war has cluttered the headlines — the war on obesity. And a substance even more insidious, I would argue, has supplanted cocaine and heroin. The object of our current affliction is sugar. Who could have imagined that something so innocent, so delicious, so irresistible — just one glucose molecule (not so sweet) plus one fructose molecule (very sweet) — could propel America toward economic deterioration and medical collapse? Read more. [Image: Larina Natalia/Shutterstock]

Your Sugar Addiction is Killing You

Substances of abuse used to be the subject of much hand-wringing. It started with opium dens, moved to speakeasies, then to crack houses, then to “smoking permitted” anterooms. Since Nancy Reagan’s “Just Say No,” the war on drugs has taken a back seat, but not because it has been won. Rather, because a different war has cluttered the headlines — the war on obesity. And a substance even more insidious, I would argue, has supplanted cocaine and heroin. The object of our current affliction is sugar. Who could have imagined that something so innocent, so delicious, so irresistible — just one glucose molecule (not so sweet) plus one fructose molecule (very sweet) — could propel America toward economic deterioration and medical collapse?

Read more. [Image: Larina Natalia/Shutterstock]

11:47am
(Notes: 177)
  
Filed under: Health Sugar Obesity Drugs Happiness Science 
March 21, 2011
The Case for Happiness-Based Economics: In 2008, economists Betsey Stevenson and Justin Wolfers painstakingly converted incomes to purchase price parity, normalized different scales for happiness, and even re-interpreted survey questions in other languages. They then reexamined Easterlin’s claims and found that they didn’t hold up. Their conclusion: Absolute income matters. Life satisfaction continues to increase with greater income, after all. Neoliberal economists cheered. Angus Deaton said wryly, “As an economist I tend to think money is good for you, and am pleased to find some evidence for that.” Stevenson and Wolfers wrote triumphantly that their findings “put to rest the earlier claim that economic development does not raise subjective well-being,” and all but broke out the green pom-poms to cheer for GDP. Their research, however, also emphasizes something that most economists are less eager to discuss. Central to Stevenson and Wolfers’s analysis is the use of a logarithmic scale to relate happiness to income. What correlates with a fixed increment of happiness is not a dollar increase in absolute income (e.g., an additional $1000), but a percentage increment (e.g., an additional 100%). So, going from a $5000 annual income to $50,000 links with as much additional happiness as going from $50K to $500K, or from $500K to $5 million, or even from $5 million to $50 million. To put it another way, as income rises, every additional dollar represents a smaller increment of happiness. At one level, this is perfectly obvious. The first increase of $45K — from $5K to $50K — would take a family from hunger and homelessness to being well-fed in an apartment, probably with a TV to boot. An additional $45K of income to $95K might allow for a few luxuries, but certainly nothing close to the difference between starvation and the middle class! Economists know this at some level, but they largely neglect it in their models. Read on at The Atlantic.

The Case for Happiness-Based Economics:

In 2008, economists Betsey Stevenson and Justin Wolfers painstakingly converted incomes to purchase price parity, normalized different scales for happiness, and even re-interpreted survey questions in other languages. They then reexamined Easterlin’s claims and found that they didn’t hold up. Their conclusion: Absolute income matters. Life satisfaction continues to increase with greater income, after all.

Neoliberal economists cheered. Angus Deaton said wryly, “As an economist I tend to think money is good for you, and am pleased to find some evidence for that.” Stevenson and Wolfers wrote triumphantly that their findings “put to rest the earlier claim that economic development does not raise subjective well-being,” and all but broke out the green pom-poms to cheer for GDP.

Their research, however, also emphasizes something that most economists are less eager to discuss. Central to Stevenson and Wolfers’s analysis is the use of a logarithmic scale to relate happiness to income. What correlates with a fixed increment of happiness is not a dollar increase in absolute income (e.g., an additional $1000), but a percentage increment (e.g., an additional 100%). So, going from a $5000 annual income to $50,000 links with as much additional happiness as going from $50K to $500K, or from $500K to $5 million, or even from $5 million to $50 million.

To put it another way, as income rises, every additional dollar represents a smaller increment of happiness. At one level, this is perfectly obvious. The first increase of $45K — from $5K to $50K — would take a family from hunger and homelessness to being well-fed in an apartment, probably with a TV to boot. An additional $45K of income to $95K might allow for a few luxuries, but certainly nothing close to the difference between starvation and the middle class!

Economists know this at some level, but they largely neglect it in their models.

Read on at The Atlantic.

9:27am
(Notes: 36)
  
Filed under: Business Economics Research Happiness Science 
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