Are we getting happier over time?
The field of happiness studies has moved out of psychology and into economics. It is folk wisdom that money is no guarantee of happiness. And arguably it is happiness that we care about, not wealth. So rather than looking at aggregate wealth, an alternative research strategy asks people if they are happy. This may sound naive, but in fact people’s answers are correlated with their health, how much they smile, whether their friends rate them as happy, and information from brain scans. We should not so hastily dismiss questionnaire evidence about happiness.
Andrew Oswald, of the University of Warwick, is one of the leading researchers in this area. His home page offers a good range of readings in the area. One forthcoming paper of his, for the Journal of Public Economics, addresses the question of whether we are becoming happier or not. He finds the following:
1. Americans as a whole have not become happier over the last several decades.
2. American blacks have become happier over the last several decades.
3. American women have been the biggest happiness losers since the 1970s.
4. Being unemployed has a “happiness cost” of about $60,000 a year.
5. Being black has a “happiness cost” of about $30,000 a year. Both these figures can be interpreted in terms of a low happiness value for extra dollars, rather than a huge happiness penalty for being unemployed or black.
6. A lasting marriage is worth about $100,000 a year in terms of happiness.
7. Happiness is U-shaped with age, with the minimum coming at about 40. (Hey, wait a minute, I am 41 and happier than ever before!)
8. Relative income matters per se.
My take: I find least persuasive #1 and #7. Americans are happier as a whole because they are living longer and have access to much better medical care. Your chance of dying of a heart attack at age 50 is much lower than before. That being said, if you take a pre-selected group living under normal circumstances, they may not come across as much happier as their predecessors from earlier decades. So many of the benefits of the modern world come in the form of avoiding tragedies.
By the way, this excellent book review defends the role of the market in bringing us happiness.
A richer world also makes us happier by giving us better jobs. Read Oswald on how to find a job to make you happy. Here is his advice:
1. Work for a non-profit
2. Be a woman.
3. Be old (he suggests that your earlier failures tame your expectations with age).
4. Don’t get overqualified.
5. Avoid a place where the boss controls the pace of the work.
I’ve got #1 and #5 down to perfection, and I am working on #3.
Thanks to Mark Brady for directing my attention to the paper and the links.
Is risk-aversion bad for you?
It is bad for rats, or so it seems:
…new research published in the Proceedings of the National Academy of Science shows that caution can actually kill you. Sonia Cavigelli and Martha McClintock of the Department of Psychology and Institute for Mind and Biology at the University of Chicago found in a recent experiment that individuals who fear novelty–a condition scientists have named “neophobia”–are likelier to die at an earlier age than those who are unafraid of change. It is the first time, says Cavigelli, that a study has demonstrated that an emotional trait that shows up in infancy can shorten life span.
For this research, Cavigelli and McClintock followed the lives and fortunes of pairs of rat brothers for several years. The scientists chose their subjects by first establishing which of the rats were neophobic. To do this, they placed the young rats inside a bowl in a small room. Objects the rats hadn’t seen before–a rock, a metal box, and a plastic tunnel–were placed in each corner of the room. The rats the scientists deemed neophobic either stayed hunkered down in the bowl or left it only hesitantly, with hunched backs, stilted walks, and bristling fur. The rats who left the bowl quickly to explore the room and the various unfamiliar objects were dubbed neophilic.
And the results? These risk-averse rats showed a consistent pattern of stress throughout their lives and died at earlier ages. What does this mean for people?
A number of parallels exist between humans and their rat surrogates. Neophobia shows up in human infants as early as 14 months of age, and like the rats, fearful children have a faster and stronger hormonal response than children who are not afraid of new situations. It’s also been shown that if you are neophobic at a young age, you tend to remain that way throughout childhood. Cavigelli suggests, however, that individuals may develop strategies to avoid the negative effects of neophobia. “If you are a neophobic-type person, you might avoid any novel situations thereby minimizing that stress,” she says. Staying away from stressful situations could be a form of “self-medication.”…The wear and tear of stress hormones can cause neophobes to get sick more quickly, suggests Cavigelli. So if you know you’re a neophobe–and therefore more vulnerable to any bug going around–you might want to be seek medical intervention promptly in the case of illness.
Although it looks like the neophiles have an unfair advantage, they may not have it as good as it seems. In the experiment, Cavigelli and McClintock played God by controlling the environment of their subjects and essentially creating a safe universe where being brave didn’t get you into trouble. But real life, with its car accidents, plane crashes, and human predators does not always reward the fearless. Human neophiles might also have longer lives if we were all just rats in a cage.
The researchers suggest that it makes evolutionary sense for mothers to have emotionally diverse litters. In other words, there is an evolutionary reason why some but not all teenagers can act like such foolish idiots. See Slate.com for the full story.
Reaganomics
The National Center for Public Policy Research has begun a series of briefs on “What Conservatives Think” in order to “help bridge the gap between rhetoric and reality.” Yes, but in which way are they crossing the bridge? Consider their brief on Reaganomics. It begins, “here are facts about the 1980s” and almost immediately heads off the rails, “from 1982 through 1989, the years President Reagan’s economic policies were in effect…” Hmmm, I thought we were going to get the facts about the 1980s? What happened to 1981-1982? Ah, Reagan’s policies weren’t in effect then – presumably these were the ghostly remains of the Carter years – but then logically Reagan’s policies must have been in effect until at least 1991, right? Apparently not.
The truncation of the Reagan years lets the NCPPR compute statistics from the bottom of a recession to the top of a peak thereby confusing cyclical with permanent gains. Numbers should not be treated as tools for partisan games but it’s especially galling here because the truth is in many ways more creditable to Reagan.
The 1982 recession was a result of Reagan’s policy – the policy to support Paul Volcker in wringing inflation and inflationary expectations from the economy. The 82 recession was terrible but the alternative, another goosing of the money supply, higher inflation, and a delay but not an avoidance of the day of reckoning, would probably have been worse. During the recession Reagan’s approval rating hit an all time low of just 35% but to his credit he stood firm. As a result, the economy fundamentally shifted from a high inflation/high unemployment economy to a low inflation/low unemployment economy. It was the recession of 1982 which laid the foundation for the next two decades of higher productivity and better economic policy.
A Challenge to Readers
President Bush reputedly asked his big-think guys to come up with a new vision to unify and motivate the nation and they came up with … a moon base? It’s so been there, done that. Going to the moon was one of the greatest accomplishments of mankind but I am not inspired by imitation. Are you?
Hence, I issue this challenge to the blogosphere. What’s your big-think idea to unify, motivate and inspire the nation? A moon-base will cost on the order of 200 billion so let’s economize and say that the idea should cost 100 billion or less – a better idea and 100 billion to spare! Ideally, the idea should be mostly free of politics and have a strong possibility of success given that the money is spent. Email me and I will post the best ideas with full credit.
China facts
In 1990 bicycles carried 70 percent of travelers in Shanghai. Now it is no more than 15 to 17 percent. Last month the city government of Shanghai banned bicycles on all major roads. Automobile sales in China are growing at a rate of 50 percent yearly. Bus service is considered to be of good quality and a subway network is being built. Upon completion it will have more miles of track than the subways of New York City. China has 7 of the world’s 10 most polluted cities. Here is the full story.
Why Europe is no longer world leader: one illustration
The New York Times writes of:
…a new regulation imposed by the European Union that reduces the allowable sound exposure in the European orchestral workplace from the present 90 decibels to 85. The problem is, a symphony orchestra playing full-out can easily reach 96 to 98 decibels, and certain brass and percussion instruments have registered 130 to 140 at close range.
The directive – issued last February and intended to protect all workers, orchestral musicians included – specifies a daily “upper exposure action value” of 85 decibels, amid a welter of other provisions. It acknowledges “the particular characteristics of the music and entertainment sectors.” It allows discretion to member states to use averaging, specifying a weekly exposure limit of 87 decibels, and to allow a transition period for implementation.
For me this article had a “jaw hits floor” quality. How about legislation saying that no composer can lose blood, sweat, and tears over a masterwork? Bach, after all, wrote the equivalent of twenty pages of music a day. He likely had some form of carpal tunnel syndrome.
Note that private solutions can alleviate the noise problem. Some orchestras increase the spacing between players. Some musicians use earplugs. Sometimes an orchestra will put plexiglass screens in front of the trombones. Or you don’t have to join an orchestra in the first place.
By the way, the trombones are not the only problem. The piccolo also has a negative effect on hearing.
And what about the United States?
In this country, the Occupational Safety and Health Administration takes a more hands-off attitude toward orchestras than the European Union. “We don’t basically get involved with them,” Francis Meilinger, an OSHA spokesman said. Here, too, orchestras fall under the agency’s general guidelines for the workplace, which allow a 90 decibel level over an eight-hour day, and a 97 decibel limit over three hours. Since American orchestras work relatively short days, and the peaks of sound are merely intermittent, they don’t represent a particular concern in this regard.
Imagine that, the EU having less sense than our OSHA. In any case, it remains to be seen how the measure will be implemented and enforced. Many musicians have announced that they plan to continue playing Wagner, Mahler, and Strauss, regardless of regulatory directives.
The economics job market
This report offers extensive information on job opportunities for Ph.d. economists. The good news: most of us are getting jobs. The average starting salary is just over $62,000. Macro and international are the fields most in demand. For 2003-4 there is one job in method/history of economic thought and a supply of ten in that same field. 91 percent of all schools pay moving expenses for newly hired professors. See the link for many more facts of this nature. Thanks to Newmarksdoor.com, an excellent economics blog, for the link.
How many species is global warming destroying?
Gregg Easterbrook debunks some recent doomsaying on this topic. You might have noticed a recent study claiming that more than one million species are being endangered by global warming. Easterbrook points out a calmer yet still environmentalist estimate of 12,259 endangered species, and that is from all causes, not just global warming. Easterbrook writes:
…the study in question is dubious because extinctions don’t seem to be happening at anywhere near the rate called for by other assumptions, mainly concerning habitat loss. Species-extinction theories say habitat loss, development, and logging should lead to rapid declines in species. All these factors are at play in the Pacific Northwest of the United States–and no animal species is known to have fallen extinct there in the last couple decades. (Several salmon species and other species of the area are imperiled.) This is significant because the Pacific Northwest is an elaborately studied area; far more is known about it than the tropical regions about which the Thomas study makes vague computer projections. Graduate students comb over the Pacific Northwest, knowing that tenure and academic renown will go to anyone who documents an animal species loss. And average temperatures are rising in the Pacific Northwest. For anything even remotely close to Thomas’s 1.25 million extinctions to be a hard number, we should already be seeing the bow wave in the form of dozens if not hundreds of extinctions in well-studied areas like the Pacific Northwest. Instead we see, um, zero.
Habitat loss and species extinctions are real problems, but let us not politicize science to scare up support for our favorite proposals.
Addendum: See also this trenchant critique from TechCentralStation.com. Carl Zimmer defends the study, thanks to Chris Mooney for the link.
Should you have your kids during an economic boom?
Children who are born during economic booms live longer than their counterparts born during leaner times. The result holds for a Dutch data set of 3000 individuals born between 1812 to 1912. Here is a summary of the research. Here is the paper itself. A ten percent improvement in economic product added three years to the average life in the data set. OK, that is not so shocking on its own terms. The surprise is that the beneficial effects of wealth are most determined by the level of national wealth in the first seven years of life. In other words, good child care pays off for a very long time. And bad macroeconomic conditions take their biggest toll on the young and the elderly. If you are born in poor times, your chance of dying early has its greatest spikes during your childhood or after the age of fifty. It remains to be seen whether these results generalize to current levels of wealth in the United States. To be sure, a bad macroeconomy raises stress and damages health, but I know of no modern data on whether the effects on children persist through time.
Addendum: Ken Hirsch suggests that: “It appears that in wealthy countries, within the last forty years, recessions actually reduce mortality. See the work of Chris Ruhm and those he references:
“Good Times Make You Sick”, Journal of Health Economics, Vol. 24, No. 4, July 2003, pp. 637-658.
“Does Drinking Really Decrease in Bad Times?” (with William E. Black), Journal of Health Economics, Vol. 21, No. 4, pp. 659-678.
“Are Recessions Good For Your Health?”, Quarterly Journal of Economics, Vol. 115, No. 2, May 2000, pp. 617-650.
“Healthy Living In Hard Times”, July 2003, submitted to the Journal of the European Economic Association, click here.
See also “Deaths Rise in Good Economic Times: Evidence From the OECD”, (with Ulf-G.Gerdtham), November 2002, submitted to the European Economic Review, click here.”
The references are from Hirsch, I have edited his remarks slightly so that the links flow with the text.
Arnie’s California budget
Calpundit provides a useful tabular analysis of how California’s new governor will address the state’s fiscal crisis. Here is the entire budget document. Here is another blog analysis.
Where are the cuts coming from?
Overall, the cuts appear to be approximately as follows: $900 million from MediCal, $800 million from CalWorks welfare-to-work programs, $.6 billion in other health and human services programs, $400 million from higher education, $2 billion from primary education, $400 million from prisons, $1 billion from transportation projects, and $.2 billion in miscellaneous.
On top of that we have fee increases of $1.3 billion, much of that coming from casinos, and $4 billion of borrowing. If we can take all the numbers at face value (hardly ever the case with political budgets), a $14 billion budget shortfall will be covered.
The bottom line: Once you push through the smoke and mirrors, spending cuts amount to only a few billion. Still, this is the best political test we are likely to see of whether real spending cuts can be sold to the general electorate. If it sounds like Arnie is cutting too much budget meat for your taste, keep in mind that California state spending rose 44 percent since 1997-8. State bonds are near junk status and possess the lowest credit rating among the states.
Did life on earth start from Borax minerals?
Read here for the latest scientific discovery.
Bad news for America but no surprise
The United States has dropped in its standing for the 2004 Index of Economic Freedom. We used to be sixth, now we are tenth.
Here are some of the leaders:
1. Hong Kong, for the tenth consecutive year.
2. Singapore
3. New Zealand
4. Luxembourg
5. Ireland
Moving down in the list, France was #44, North Korea comes in last, and Venezuela, Iran, and Libya were among the ten worst. No polling was possible for Angola, Burundi, and Iraq, among other disaster areas.
The United States was downgraded for poor fiscal policy. Note that the Freedom Index is done by the Heritage Foundation and The Wall Street Journal, hardly left-wing critics of Republican economic policy.
Addendum: The Economic Freedom of the World index offers slightly different rankings. For 2003 America remains in third place. The EFW is considered to rely more heavily on quantitative measurement, the Index of Economic Freedom relies more on observer assessments of economic freedom.
The further decline of the mass audience
Total U.S. movie box office just barely held its own for 2003, as reported by the January 5-11 issue of Variety (not on-line). The number of moviegoers declined by three percent. A few major movies, such as “Finding Nemo” and “Return of the King” did very well, but the overall picture was flat. Elizabeth Guider writes: “…unleashing dozens of $150 million films aimed at the global mainstream audience is an increasingly losing proposition.” Audiences for network TV have been poor as well.
Where is everyone going? Are you all reading blogs instead? That I doubt. The big cultural winner for this year is the DVD:
Check the year-end reports from the various sectors of the entertainment industry, and it’s clear that DVD stands alone as an unqualified sensation. It’s such a success that it might even be eclipsing – and cutting into – other leisure pursuits.
Total DVD revenue last year hit $17.5 billion – $12.1 billion in sales, $5.4 billion in rentals – according to new industry totals from market tracking firm Adams Media Research. That surpasses the most optimistic expectations and overshadows spending on movie tickets, music CDs and video games.
Here are some numbers from the side of the consumers:
Hours spent with home video increased 18% from 1997 to 2002. For the average person that means an increase to 58 hours each year, while time spent listening to music, watching network TV and reading books, magazines and newspapers dropped.
This year, movie fans spent an estimated 67 hours watching discs; that is expected to jump another 46% over the next four years to about 98 hours per person per year…nearly a DVD a week…Meanwhile, total TV watching is expected to rise only 3% (with network TV dropping 3%) and moviegoing 8%. Listening to music is expected to fall 19%.
So what does this mean for culture? People are watching the same movies over and over again. Over time we can expect movies to stand up better on multiple viewings, which is the whole point of the DVD format. Movies should become deeper. It is an open question whether the number of movies issued will rise or fall, but I am an optimist. On one hand repeated viewings mean less time to sample extra titles. On the other hand, the compact and popular DVD format gives filmmakers a new way of reaching audience. It will benefit the blockbusters, such as Nemo, but also will help niche films. For instance many people now order otherwise unavailable foreign movies through netflix.com.
Addendum: Do you resent your loyalties to DVDs? Here is a lengthy and excellent post, from Michael of www.2blowhards.com, on how to think about and revitalize your reading. However his remarks will spur your further interest in cinema as well.
SUV safety debate
A theme in writings about SUV’s (see here for a recent New Yorker article) is that consumers tend to overestimate SUV safety and grossly misunderstand the factors behind auto safety. The basic point is that safety comes from avoiding risky situations and quickly responding to danger. It turns out SUV’s tend to lull drivers into a false sense of safety and they respond more slowly to danger (e.g., SUV’s come to a complete stop much more slowly than many other popular types of cars). Because SUV’s are cosmetically altered trucks, they don’t have many basic safety features now standard in small cars or minivans, so you are more likely to die in an SUV accident than in another car (an anti-SUV site collects some Insurance industry reports). Consumer Reports has for many years argued that SUV’s are quite likely to tip over.
One response I’ve seen is to avidly defend consumer choice (see here for Car and Driver’s Brock Yate’s defense, or here for Peter Klein’s comment), or to minimize the SUV’s dangerous design. I think this misses a basic point. When events are infrequent (like fatal auto crashes), or when cause and effect are hard to link, people can opt to believe anything they want. All economics tells us is that markets are extremely good at responding to possibly erroneous consumer beliefs.
My take on this entire issue is that the central issue is liability. In general, you can’t hold someone accountable for the fatalities created by the use of a car with less then optimal safety features, any more than you can hold somebody accountable for the extra risk created by using a less than best bicycle, motorcycle or other device. In short, there is not much people can do about SUV safety because some people will always want to make the trade-off between safety and other product features.
Since the insurance industry is still willing to insure SUV’s, I wonder if the risk associated with them is tolerable given our current legal and economic standards. I invite knowledgable readers to email me information about how much more it costs to insure SUV vs. other vehicles.
Ricardo’s Difficult Idea
A colleague reminds me of this wonderful (1996-pre political commentator) essay by Paul Krugman, Ricardo’s Difficult Idea, explaining why some otherwise intelligent people find the idea of comparative advantage so difficult to understand.