Posts Tagged ‘Economics’

The Economic Power — And Pitfalls — Of Positive Thinking

Wednesday, May 7th, 2008

People who are optimistic are more likely than others to display prudent financial behaviors, according to new research from Duke University’s Fuqua School of Business.

But too much optimism can be a problem: people who are extremely optimistic tend to have short planning horizons and act in ways that are generally not considered wise.

Manju Puri and David Robinson, professors of finance at Duke, report in the October 2007 issue of the Journal of Financial Economics that the differences between optimists and extreme optimists provide important insights into the interaction between psychology and economic and lifestyle choices.

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Pursuit of happiness

Friday, April 25th, 2008

[...]Imagine you are a president or prime minister. It is imperative to keep your people happy because you hope to be re-elected in order to make your citizens happier and to run your country efficiently. You also know that people care about personal factors like health, income, education and development in general. You have an intuitive idea that they care also about external factors like inflation and security. But how do you work out the relative importance of all these things that constitute well-being which in turn translate to happiness? We are talking about happiness economics.

Historically, economists have said that well-being is a simple function of income. By their argument, happiness ought to be the preserve of the super rich— the Bill Gates and the Roman Abramovichs of this world. But the million dollar question is: Are the rich always happy?[...]

Rooted in this postulation is the thinking of happiness economics, which is the study of a country’s well-being by combining economists’ and psychologists’ techniques. The goal of happiness economics is to determine where people derive their well-being. Happiness economists hope to change the way governments view well-being and how to most effectively govern and allocate resources given this paradox.

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Will Raising the Incomes of All Raise the Happiness of All?

Wednesday, April 23rd, 2008

In a famous 1995 paper, Richard Easterlin asked: “Will raising the incomes of all increase the happiness of all?” His analysis involved studying the evolution of happiness through time in Japan, the U.S. and Europe. His answer? “No.”

Betsey Stevenson
and I recently returned to examining the evolution of happiness in these three important regions, and we conclude that the evidence is not so clear cut.

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Confirmed: Money really CAN’T buy happiness.

Saturday, March 15th, 2008

Italian researcher Luisa Corrado was among the those honored today at the European Science Awards Ceremony, for her work on whether wealth can bring happiness. Corrado received one of five Marie Curie Excellence Awards, which recognize excellent researchers who have participated in the EU’s researcher exchange program.

Working at the University of Cambridge Faculty of Economics, Corrado led research that maps European feelings of well-being. Her report confirms the old adage that money can’t buy happiness. In countries where the population said that they trusted the government and other institutions, a high income made people happier still, but in those countries where such trust was lacking, even the richest tended to be less happy.

The Danish emerged as the happiest people in Europe, while the British rank ninth. Dr. Corrado said, “One thing that is clear from the report is that it is not enough for governments to focus on improving wealth. Our well-being would be more likely to flourish in a mutually supportive and trusting society.”

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