Happiness

Question 1

What is the difference between the ways that economics, psychology and neuroscience view happiness?

Answer 1

Econ - stresses money makes you happy

Psychology - each person has a fixed set point of happiness, from which they temp. deflect due to life events - a hedonic adaptation is whe there’s a change in this fixed point

Neuroscience - more activity in LHS pre frontal cortex tf happier, smile more, RHS opposite

Question 2

Describe the World value survey?

Answer 2

Measures happiness by asking participants questions like how happy are you?

Questions normally Likert scale (polarised ends with number of middle responses) rather than y/n

Question 3

Describe mood fluctuation survey and results?

Answer 3

1000 women asked to divide their day into episodes of how they felt:

Sex liked most, commuting least

Company: friends most, boss least

Question 4

US survey on income and happiness?

Answer 4

Found rich are happier than poor on average

Question 5

Income and happiness cross country comparison?

Answer 5

Found above $15000 per capita, happiness becomes independent of income

Question 6

Income and happiness survey in poor countries findings?

Answer 6

Found if near bread line, clear +ve effect of income on happiness

Question 7

Western flat time series finding?

Answer 7

Last 50 years people no happier despite:

Higher GDP/capita, less working hours, longer holidays, longer life expectancy

Question 8

What is the Easterlin paradox?

Answer 8

Happiness rises with income up to a point; after this they no longer correlate

Question 9

Explanations for Easterlin paradox? (3)

Answer 9

Other factors (health and marriage)
Methodological issue (bounded scale for measuring happiness)
Assumes constant tastes

Question 10

2 reasons assuming constant tastes is unrealistic?

Answer 10

Rivalry

Habituation

Question 11

What is meant by rivalry?

Answer 11

If others get better off and I compare myself to them, I will need more in order to feel as good as before

Question 12

What is meant by habituation?

Answer 12

Above subsistence level, wants derived from our experience tf as my standards rise, this reduces enjoyment from any given standard of living

Question 13

What is the hedonic treadmill?

Answer 13

Increase living standards -> SR satisfaction -> LR adjustment tf any loss in SofL is harder

Question 14

How does job satisfaction relate to wage level?

Answer 14

It’s unrelated - it depends only on the rate of wage change (UK)

Question 15

What is the money illusion?

Answer 15

Due to habituation and rivalry, people overestimate the power of money to make them happier

Question 16

Read policy implications

Answer 16

Now and stuff below too

Question 17

What are dynamic studies?

Answer 17

Changes over time recorded tf can see effects of policies (panel data)

Question 18

Advantages of panel data? (3)

Answer 18

High n
Can analyse changes over time
Can control for individual differences

Question 19

Negatives of panel data? (3)

Answer 19

High cost and time consuming
May get no response
Tracking same individuals is difficult

Question 20

4 uses of happiness economics?

Answer 20

Setting socio-economic policies
Prioritisation of issues
Evaluation of costs of life events
Understanding people’s motivations

Question 21

See flat time series and flat cross sectional findings

Answer 21

Now