Economics of happiness

So, Wolfblogs just let me know that it is really going off-line at the end of the month.  I went through and recovered about 20 or so draft ideas for blog posts that I never did and brought them over here (also dumped another 30-40 that were simply no longer relevant).  This one I really liked…

A nice summary in the Post of the economics of happiness and how it relates to government policy.  Here’s the key portions:

Wherever I look, some simple patterns hold: A stable marriage, good health and enough (but not too much) income are good for happiness. Unemployment, divorce and economic instability are terrible for it. On average, happier people are also healthier, with the causal arrows probably pointing in both directions. Finally, age and happiness have a consistent U-shaped relationship, with the turning point in the mid- to late-40s, when happiness begins to increase, as long as health and domestic partnerships stay sound.

All of this seems rather logical, suggesting that if a government wants to get into the business of promoting happiness, it can pursue some straightforward policy goals, such as emphasizing health, jobs and economic stability as much as economic growth.

If I’m getting towards the bottom part of the U (about 10 years or so away), I’m sure doing great.  When we got back from a terrific beach vacation this weekend I posted “Back to reality” as my facebook status update.  Kim pointed out, my reality’s pretty damn good, and she’s right.  Nothing like a great marriage (rewarding, though certainly exasperating kids), good health, good friends, and economic stability.

The article also makes the important point, though, that in many ways this is all relative:

But here’s the complicated part. While there are stable patterns in what leads to happiness, there is also a remarkable human capacity to adapt to both prosperity and adversity. Thus people in Afghanistan — a war-stricken country with poverty like that of sub-Saharan Africa — are as happy as people in Latin America, where typical social and economic indicators are a good deal stronger. Kenyans, meanwhile, are as satisfied with their health care as Americans are with theirs. Being a victim of crime makes people unhappy, but the impact is smaller if crime is a common occurrence in their society; the same goes for corruption and obesity. Freedom and democracy make people happy, but the effect is greater when they’re used to such liberties than when they’re not.

In other words, it’s what your used to and how you fare compared to those you know.  We know from various experiments that most people would be happier living in a $200K house in a $150K neighborhood than a $250K house in a $300K neighborhood.  So, stop being jealous of your neighbors 🙂 and be happy about the good things.

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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