The missing piece is the effect of relative income. I assume this equation means the subject's income goes up and everyone else's stays the same? I expect the result would be different if by some fancy new technology everyone's material standard of living went up by the same percentage.
I don't see that you ever addressed the "a" part of the equation, but I assume that it must apply to some basic income that meets our basic needs. It seems obvious that people who really struggle to get by day-by-day are less happy than those who are comfortable, even if circumstances require them to be frugal.
Here is a link I read yesterday about the struggles of the poor.
the start of LN grows *extremely* quickly relative to the later parts
So those in poverty or extreme poverty would get *large* increases in happiness for small increases in wealth. Going from 1k/year to 3k/year is pretty large jump
I'd say going from 1k a year to 1.5k a year would be bigger even than going from 50k to 300k a year. When you're earning a few dollars a day, adding in even a little bit more can potentially be the difference between life and death, or at least treating potentially permanent health issues. But once you have food, medicine, and shelter taken care of, even in their most basic forms, every additional dollar doesn't do too too much. At least compared to what it was doing for people who couldn't afford food and medicine.
Very good, Bryan. The Wolfers equation leaves no doutb about money and happiness. But there is a slip in your exposition: Calling the "placebo effect". That´s what Epicurus does. Best regards.
Economic growth does tend to lead to things like lower infant mortality and other things that swing happiness. I don’t think most people take those into account when thinking about income and happiness because they are thinking about individuals, and individuals tend to take the level of technology as a given because their income affects how much they can get but the income of everyone determines what there is to get.
Nice. I had forgotten about this result. Further evidence that you need to go beyond statistical significance if you want to judge significance.
You scoff at the value of raising happiness by a mere single standard deviation, but I don’t know, that seems like a lot to me.
Anyone understand what are the units of measuring happiness here? Standard deviations of what?
The missing piece is the effect of relative income. I assume this equation means the subject's income goes up and everyone else's stays the same? I expect the result would be different if by some fancy new technology everyone's material standard of living went up by the same percentage.
I don't see that you ever addressed the "a" part of the equation, but I assume that it must apply to some basic income that meets our basic needs. It seems obvious that people who really struggle to get by day-by-day are less happy than those who are comfortable, even if circumstances require them to be frugal.
Here is a link I read yesterday about the struggles of the poor.
https://www.yahoo.com/news/people-lived-poverty-sharing-specific-033102127.html
There's a reason he used LN
the start of LN grows *extremely* quickly relative to the later parts
So those in poverty or extreme poverty would get *large* increases in happiness for small increases in wealth. Going from 1k/year to 3k/year is pretty large jump
but going from say 40k/year to 43k/year is tiny.
I'd say going from 1k a year to 1.5k a year would be bigger even than going from 50k to 300k a year. When you're earning a few dollars a day, adding in even a little bit more can potentially be the difference between life and death, or at least treating potentially permanent health issues. But once you have food, medicine, and shelter taken care of, even in their most basic forms, every additional dollar doesn't do too too much. At least compared to what it was doing for people who couldn't afford food and medicine.
Very good, Bryan. The Wolfers equation leaves no doutb about money and happiness. But there is a slip in your exposition: Calling the "placebo effect". That´s what Epicurus does. Best regards.
The link for "hard-line Epicurean" doesn't work.
Why is economic growth important then?
Look at effect on "happiness" of lowering income...
Great point. I was think that as well.
Economic growth does tend to lead to things like lower infant mortality and other things that swing happiness. I don’t think most people take those into account when thinking about income and happiness because they are thinking about individuals, and individuals tend to take the level of technology as a given because their income affects how much they can get but the income of everyone determines what there is to get.