Erzo Luttmer wrote an acclaimed paper in 2005 called 'Neighbors as Negatives: Relative Earnings and Well-being' in the Quarterly Journal of Economics.  He defends the stance that our neighbours affect our happiness because they are the reference group to whom we compare ourselves, and therefore they are the people we believe ourselves either inferior or superior to (subconciously or not).  Everyone, it seems, wants to be above average to be happy. Luttmer...

Today I comment on a chapter by Stefano Bartolini in the Handbook of the Economics of Happiness.  He discusses the role of economic growth in our understanding of subjective well-being and particularly the role that money plays for happiness. He considers trends in expectations about leisure and money, trends in saving and in labour markets. He explains some of the reasons behind these trends. Historic TrendsDuring the 70s economists were debating the coming 'leisure...

Alois Stutzer's paper 'The role of income aspirations in individual happiness' forms the basis for my commentary today.  Stutzer's research  provides a few specific messages: People experience lower subjective well-being when they have higher income aspirations, controlling for their income level.  People adapt to their income levels and adjust their aspirations upwards according to their new, higher levels of income. The average income of an individual's...

My recent course on sustainable development included a module on the growing literature of happiness economics.  It was included in a sustainable development course because of the trends that are observed in the 'happiness economics' literature regarding dissatisfaction with GDP as an index of human welfare and thus GDP growth as a measure of a society's advancement.  I will attempt to deal with some of the questions that we covered in our class as prep for...

In a recent article, Geoffrey K. Pullum (one of the authors of the recently published rants against Strunk & White's The Elements of Style. Pullum brings up several points, many of which are 'correct' but often they are weak and smack of envy. For example, Pullum takes issue with 'Omit needless words' one of Strunk's famous dictums. Pullum claims that the student who understands the command doesn't need it. Strunk & White, however, go on to tell you that...

Take a look at this Scientific American Interview with Judith Rich Harris (author of The Nurture Assumption and No Two Alike). The central question of the interview is 'Do Parents Matter?' According to Harris's theory parents matter because of their genetic contribution to their children, which affects personality and physicality, and because of their role in nurturing specific behaviour patterns at home. But parents do not matter much for behaviour outside the home...

In The Wealth of Nations Adam Smith argued that various institutions need to be in place before a commercial system will function well.  Moreover, these same arguments are applied to most forms of capitalist production and to most modern forms of market capitalism.  The conditions for capitalism's success include rule of law, well-defined property rights, and many others. These conditions have been elucidated by many researchers such as Douglas North and others. ...

I have had Anatole Kaletsky's article 'Goodbye Homo Economics' sitting in my opened tabs for a couple of weeks now.  I found his commentary germane, though not always accurate. First, I am regularly annoyed by people using the word 'economists' to denote macroeconomists, specifically of the theoretically and policy-oriented bent.  I am an economist, but I focus on microeconomic behaviour and evolutionary economics.  It annoyed me that Kaletsky subscribed...