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Comments on: Happiness, policies, and economics http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/ The Visible Hand in Economics Wed, 27 Aug 2008 20:04:38 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2259 Wed, 27 Aug 2008 20:04:38 +0000 http://tvhe.wordpress.com/?p=984#comment-2259 Thanks Jo, looks really interesting – I will have a closer read over it today 🙂

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By: Jo http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2258 Wed, 27 Aug 2008 12:26:52 +0000 http://tvhe.wordpress.com/?p=984#comment-2258 Matt, this article was posted today. A linear model linking economic development to happiness.

http://pos-psych.com/news/bridget-grenville-cleave/20080826990

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By: Matt Nolan http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2257 Wed, 27 Aug 2008 04:14:12 +0000 http://tvhe.wordpress.com/?p=984#comment-2257 Hi,

Thanks for the replies everyone, very interesting stuff.

I think everyone agreed, in one way or another.

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By: Happy One... http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2256 Tue, 26 Aug 2008 20:45:16 +0000 http://tvhe.wordpress.com/?p=984#comment-2256 Another take on happiness…

Above all else…
Guard your heart…
For it is…
The wellspring of life…

Proverbs 4:23

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By: Pakistani ISI http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2255 Tue, 26 Aug 2008 10:07:45 +0000 http://tvhe.wordpress.com/?p=984#comment-2255 Drink provokes the desire but takes away the performance.WilliamShakespeareWilliam Shakespeare

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By: Jo http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2254 Tue, 26 Aug 2008 09:18:51 +0000 http://tvhe.wordpress.com/?p=984#comment-2254 @the author and hello economists at Canterbury

To answer the author’s question, why are we talking about happiness now? Because we can!

a) Suddenly psychology (cf Seligman), management (cf David Cooperrider) and psychiatry (cf Kay Jamison) are talking about the mechanisms underlying positive phenomena. An economist might say that we can now afford to attend to what is good and true rather than what is threatening and to be avoided.

b) Positive psychology is a form of complexity/chaos theory. We have empirical demonstrations in psychology (Fredrickson and Losada, 2005, American Psychologist), active research in psychology (Psychology Today, bottommost Self Development blog) and new management models (cf Gary Hamel and google Steve Jurvetson with keyword Hamel at Flickr).

c) The population will not put up with less – the rise of stakeholder influence and the resurgence of hope politics (as of last night “the choice of hope over fear” Michelle Obama).

The penultimate paragraph of the original post spells out the key psychological principles of happiness.

“A society that gives people choices, security, and a voice (in some measure) is the type of society that will maximise the happiness of its citizens. This idea is not novel – and it provides the fundamental motivation behind pretty much all social sciences.”

The key characteristics of a successful social organization are always
trust,
belonging and
personal control.
There are many models and variations on the theme as the author says starting with good old Maslow.

If we were to construct a linear model, wealth, happiness and the features of society would be three different sets of variables. You can argue which are mediators and moderators (hence the preference for non-linear dynamical models). They are evidently all necessary and rather in the category of motherhood and apple pie.

Economists might like to scour the Economist for an empirical study on voting behavior in Switzerland where there is direct democracy. People who vote (i.e., exercise control) are as happy as people one economic step higher. In simple terms, giving people control saves money! This is the essence of what is taught in management. If you want a successful organization, make sure the ordinary employee has control.

Quite obviously in competitive societies, there are winners and losers and as in every Olympic race, more disappointment than glee. It is obvious that the bottom half to two-thirds will be unhappy -bringing us back to economic and other policy – your territory.

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By: Hone http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2253 Tue, 26 Aug 2008 06:32:08 +0000 http://tvhe.wordpress.com/?p=984#comment-2253 Even if we accept that average happiness doesn’t increase with wealth (and I understand that the surveys being referred to consider average happiness and the argument is that they tend to show no increase in happiness rather than a decrease), increasing aggregate wealth is still desirable because it means:
(1) An economy can accommodate more people in the manner to which the constantly happy have become accustomed (more people x constant rate of happiness = more happiness)
(2) An economy can afford more/better health care such that people live longer (more years of functional life x constant happiness = more years of happiness).
Looks like a winner to me.

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By: Eric Crampton http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2252 Tue, 26 Aug 2008 03:45:50 +0000 http://tvhe.wordpress.com/?p=984#comment-2252 There’s good evidence that being unemployed makes us very unhappy: more unhappy than being working but poor. So, we need to get rid of policies that make us more likely to be unemployed poor rather than working poor.

There’s also decent evidence (Wolfers et al) that the evidence for happiness being very concave in income is wrong: happiness does continue to increase with income.

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By: Paul Walker http://www.tvhe.co.nz/2008/08/26/happiness-policies-and-economics/#comment-2251 Tue, 26 Aug 2008 01:35:47 +0000 http://tvhe.wordpress.com/?p=984#comment-2251 The short response would be that GDP and happiness are positively correlated. See the discussion of literature by Justin Wolfers at the Freakonoimcs blog.

Here he discusses his research with Betsey Stevenson showing that there is no Easterlin Paradox. The Easterlin Paradox is the juxtaposition of three observations:

1. Within a society, rich people tend to be much happier than poor people.
2. But, rich societies tend not to be happier than poor societies (or not by much).
3. As countries get richer, they do not get happier.

Here he discusses the new evidence that rich countries are happier than poor countries.

Here he discusses the historical evidence on the fact that rich countries are happier than poor ones and how this fact remained hidden in the data for several decades.

Here he discusses the question, Are Rich People Happier than Poor People?

Here he discusses the question, Will Raising the Incomes of All Raise the Happiness of All?

Here he goes, Delving Into Subjective Well-Being

A report in the New York Times suggests that Maybe Money Does Buy Happiness After All. Or is it just more evidence of the ongoing collapse of the Easterlin paradox. A quick summary of the main point of the article,

Economic growth, by itself, certainly isn’t enough to guarantee people’s well-being — which is Mr. Easterlin’s great contribution to economics. In this country, for instance, some big health care problems, like poor basic treatment of heart disease, don’t stem from a lack of sufficient resources. Recent research has also found that some of the things that make people happiest — short commutes, time spent with friends — have little to do with higher incomes.

But it would be a mistake to take this argument too far. The fact remains that economic growth doesn’t just make countries richer in superficially materialistic ways.

Economic growth can also pay for investments in scientific research that lead to longer, healthier lives. It can allow trips to see relatives not seen in years or places never visited. When you’re richer, you can decide to work less — and spend more time with your friends.

By and large affluence is a pretty good deal.

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