Posts Tagged ‘Income’

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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Money Can’t Buy Happiness?

Wednesday, April 16th, 2008

 

Last month the Journal’s Jonathan Clements that money alone doesn’t buy a lot of happiness. Here, happiness blogger Gretchen Rubin takes a different point of view.

Money can’t make people stay in love, connect with friends or enjoy a hike in the woods. But money, spent wisely, can contribute greatly to happiness.

Recent articles in the news media tackle the money-happiness connection. A study this summer in Science magazine showed that when participants were asked to record the previous day’s activities and describe their moods, being wealthier didn’t have great impact on their moment-to-moment experience.

A different sort of study presents another picture. According to a Pew Research Center 2006 report, the percentage of people who declare themselves “very happy” goes up as family income rises. People were asked: “Taken all together, how would you say things are these days, would you say that you are very happy, pretty happy, or not too happy?” Twenty five percent of people with incomes of $30,000 or less said they’re “very happy.” That compared with 50% of people with incomes of $150,000 or more.

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Crib Sheet: Your Guide To Money and Happiness Studies

Wednesday, April 16th, 2008

 

Confused by recent headlines about money and happiness? Here’s a quick cheat sheet summarizing recent academic studies on the link between the two. Click on the links below to read summaries of the studies.

Plus, see full coverage of “Making the Move for Money.”

 Relative income and happiness

 Would you be happier if you were richer?

 Money and income: a correlation, not a cause

 Money and the blues

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Happy is enough

Friday, April 11th, 2008

Luckily the annual Australian Unity wellbeing index – the statistical smile tracker – was released this week, which helped shed some light on this consumerist conundrum.

The what-makes-us-happy report discovered that happiness starts to stall as household income passes $100,000.

According to the authors, once you crack six figures “money loses its ability to reliably raise wellbeing and does not increase in line with increasing income”.

Which makes perfect sense. It’s a fancy way of describing what I call the economics of enough.

Click here for the full article.